Checking account? Savings account? Check and check. But is that where your financial prowess ends? Do you know the 50/20/30 guideline for budgeting or if that investment was the right move? From the basics of setting a budget and sticking to it to managing your money in the right places, a financial mentor or professional can change the way you look at money.
While most people lack the background or baseline knowledge to help them successfully navigate the financial market, the good news is that new tools and apps are making it dramatically easier to keep track of your money, whether your goal is to build your rainy day fund or start investing. These new tools are challenging old-school perceptions — from reexamining the amount of money required to get started when saving or investing to broadening the pool of whom to ask for advice.
[See: 8 Times to Talk to a Financial Advisor.]
Keeping it in the family. From family and friends to industry experts, financial advisors come in all shapes and sizes — particularly as people graduate college and are first starting their careers, with full-time salaries (and student loans) to boot. According to a January 2017 survey by Mint, 30 percent of Americans believe they’d be better off if they’d listened more often to their parents, with financial advice from Mom and Dad topping the list. Parents can be particularly helpful for people who grew up in families with a healthy (and open) relationship with money, making conversations about money feel more natural and comfortable.
But if Mom and Dad are not the right resources, don’t despair. Increasingly, friendships are proving to be great support systems to hold each other accountable to short-term and long-term goals. Whether saving for a dream vacation, refinancing student loans, paying down debt or stashing away money for a first mortgage, a financial buddy who is in a similar situation can be the perfect partner. And when it comes to investing, learning together can make the process less daunting.
[See: 14 Important Personal Finance Dates to Mark on Your Calendar.]
Using online advisors. While personal relationships are always a good source for advice, it may make sense to use automatic investment or robo-advisory services, such as Betterment or Wealthfront, if friends and family won’t cut it, but you’re not ready to take the plunge and pay for a certified financial planner or advisor. These tools and services operate on a subscription basis, eliminating many of the fees typically associated with financial advisors. Services like Acorns will go a step further to round up spare change to begin an investment account — no need for an entry-level sum with lots of zeros to get started.
Paying for a professional. If it’s professional help you’re looking for — and you’re willing to spend a few bucks — it is essential that you do your homework and learn the “alphabet soup” of the financial world to make sure you’re enlisting the help of someone who will be able to provide advice on how to hit your financial goals. Here’s a quick breakdown of a few different titles and situations where it may be helpful to tap the expertise of a professional:
— Certified Financial Planner (CFP): This is a generalist who should be able to help you with your whole financial picture. CFPs commit to continuing education on financial matters to maintain their designation, so you can rest easy knowing that they will stay on top of their game.
— Chartered Financial Analyst (CFA): This designation indicates a particular expertise in investing, so if your goals are investing-related, you may want to look up CFAs in your area to see who would be the best fit for you and your goals.
— Certified Public Accountant (CPA): If you’re looking for a tax whiz to make tax season a breeze, you’ll likely benefit from the help of a CPA. CPAs can be helpful for those who are self-employed or have a side hustle that requires extra paperwork come tax season.
[See: Decode These 10 Vexing Financial Terms.]
Not everyone will need to pay for professional financial advice — especially if you’re taking a hard look at your finances for the first time. But for those that have aggressive financial goals, such as paying off student loans or credit card debt, or starting a long-term investment strategy now that you’re debt-free, it’s worth seeking help from someone who regularly works with early-career individuals in order to set up the right relationship in the long run. If you’re ready to find a professional, you can use the Certified Financial Planner Board, The National Association of Personal Financial Advisors or the Financial Planning Association to find the right fit.
Getting started. Whether you decide to tap into family knowledge or plan to do your homework to find the right advisor for your situation, tapping into a financial mentor to help you manage your money is an important step to financial success, wherever you are in life.
Yes, there are countless books and podcasts out there, but some forward-thinking and focused online research may move the process along faster. What determines success is not from whom the advice ultimately comes, but rather the amount of work and commitment put in to meet future financial goals.
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How to Find the Right Financial Mentor originally appeared on usnews.com
