Pluses Of Pro Financial Planning

By Sharon Naylor

January 13, 2014 6 min read

"Do you ever get tired of worrying about high credit-card debt, whether you can pay your rent or mortgage, or if you'll have enough for retirement? Taking charge of your finances can quell these concerns," says Guide to Financial Planning Andrew Schrage. He adds, "Programs like Medicare and Social Security could be nonexistent by the time you retire. Or, they could deliver miniscule benefits. If you tackle your finances now, you can free up funds to put toward your retirement. When it comes to saving for the future, the time to do it is now, and it's never too late to start."

Getting started on a healthy financial plan can be overwhelming. An online search of financial issues such as pensions, IRAs, mutual funds, education savings plans and other topics will reveal a whirlwind of ever-changing financial rules that can certainly cause anxiety and perhaps cause you to abandon your well-intentioned research session and log on to Facebook instead.

But this is where a qualified financial planner can be a tremendous asset to your financial goals and to your family's and your financial security. Licensed financial planners spend a tremendous amount of time studying the newest financial rules and nuances, and they excel at not just explaining them to their clients in easy-to-grasp terms, but also at co-creating a wise, multifaceted financial plan tailored to each client's goals.

Your professional financial planner will assess your current assets, liabilities, income, insurance, taxes, investments and estate plan, and help you to improve the following:

--Your household budget. A professional can look at your weekly and monthly expenditures and help you shave a percentage off of certain bills. Reorganizing your budget then allows for smarter spending. You may find that your new budget opens up some cash for savings and some extra cash for guilt-free spending. A financial planner could help change your expectations about living within a budget, so that it doesn't feel restrictive but instead leads you to more comfort and less stress.

--Savings for emergency and retirement funds. If you don't have these plans set up, your financial planner will advise you on the smartest strategies for both. And if you do have savings plans, your financial planner can recommend ways to improve your savings plans and accounts for your greater benefit. Your planner's expertise comes in handy with the trickier topics of rolling over your pensions or IRAs, without penalties in some cases, but again for greater returns on your money.

--Investments. You'll get your questions answered as your planner helps you navigate the subjects of mutual funds, SEP-IRAs and other investment plans to help create an investment plan that suits your comfort level for risk. And if your planner finds that your existing investments aren't optimally arranged, he or she can help you transition to new ones. Financial planners are not stockbrokers, so they cannot recommend individual stocks to buy. They're simply educating you as to how different investment plans work.

--Debt-reduction plan. According to a December 2013 survey report by the financial website, the average U.S. household has $15,279 in credit card debt, $149,456 in mortgage debt and $32,140 in student loan debt. A qualified financial planner can help create a debt-reduction plan that's tailored to you. For instance, you might benefit more psychologically from paying off several small-balance credit cards to get that encouraging sense of accomplishment that motivates you to keep paying off your credit debt. Or, you might wish to pay off your higher-interest credit cards first. Whatever your debt situation, a financial planner can guide you in whittling down those debts and perhaps even provide you with advice for getting your interest rates lowered.

--Preparations for future goals and responsibilities. Big life transitions such as marriage, divorce and having kids call for attention to your financial health, and a financial planner can guide you in arranging your finances to help you thrive during those big changes in your status. These rites of passage also bring about responsibilities such as saving or paying for a child's education, caring for elderly parents, buying or selling your home or a business -- all of which require smart financial planning to be successful.

With such important financial issues on your plate, your qualified financial planner will be an excellent ally in helping you take smarter steps toward financial success and, perhaps more importantly, can help you avoid making expensive or catastrophic financial mistakes. Ideally, you'll create a lasting relationship with your professional financial planner. This way, your planner can work with you to adjust your financial steps and use the benefit of knowing your financial history and your personal comfort level with money issues to keep your financial strategies at optimal performance. Plus, an ongoing relationship with your planner gives you the advantage of learning about the savings, investment and other money rules that change every year.

The key, of course, is to hire a qualified financial planner, found via referral from trusted experts like your longtime accountant or via associations such as the National Association of Personal Financial Advisors ( or the Certified Financial Planner Board ( Vet financial planners to find a knowledgeable professional with whom you connect, and don't be embarrassed if your current financial state is in disarray. Financial planners have unraveled many a disorganized financial situation, and they'll encourage you to give yourself the best chance of success by being completely honest about your financial position.

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