Step 5 Work With a Financial Professional: 5 Ways to Simplify Your Financial Life

Our personal finances- budget, investments, retirement, insurances, credit, etc.- are one of the leading causes of stress among adults. School systems only recently started offering personal finance courses to high school students within the last 5 years, and it is not yet a leading standard of education throughout the nation. But it is something that every adult must navigate, and it deeply affects our quality of life day to day. This leads to large amounts of confusion, which results in higher taxes, significant loss of potential investment returns, lost cash flows not being put to good use, and even poor credit scores. In the midst of financial confusion, making small changes can have a big impact on your overall financial health. Here are 5 basic steps to simplifying your financial life:

5: Work With a Financial Professional

Nobody is an expert at everything. Imagine if you had to be able to properly farm your own food, diagnose and prescribe all your own medicines, draft any of your own legal documents, and teach your children a proper education. It would be too much. You wouldn't be able to do any of it well. That is why we hire professionals. We have our dentists, doctors, lawyer, teachers, repairmen, etc. This is because we don’t know how to do these things, nor do we want to. We would rather have the wisdom of someone who is an expert.

Working with a financial professional is the easiest way to profoundly simplify your comprehensive financial life. Robo-Advisors emerging into the industry has been wonderful for the regular client, because not only do they invest your money well at a low cost, but because those who call themselves “financial advisors” have had to re-think how they operate to justify the fees they charge their clients. This has produced a significant change from “financial advising” that mostly looks at selling investments, to “comprehensive financial planning” that looks at your investments, debt, taxes, insurances, estate plans, education plans, hopes, and goals.

I always recommend working with a CERTIFIED FINANCIAL PLANNER™. The CFP® designation is formal recognition of expertise and a commitment to the highest standard of integrity and professionalism in the industry.

A CFP® professional will be able to help you align all areas of your financial life, and by working all areas together they can produce a much more simplified and optimal system for your finances. Financial planners can assist you in figuring out how much you should be saving for retirement and how that should be invested, while also using your retirement savings to optimize your taxes. They can look at your taxes to see where you may not be taking advantage of certain tax benefits you may be eligible for. They can work with your student loans to consolidate them or get you on a more optimal payment plan that will either pay them off faster or create a lower monthly payment for you. They can look at your goals and find a way to help you achieve them without taking as much risk with your investments as you may have thought was necessary.

These are but a few examples of the ways that working with a financial professional will add value to your financial health. And they will do it with you and for you, so you don’t bear the burden of going at it alone.