Is a Financial Planner Necessary?

Guest Post: This article was written by Ella Davidson of couponing website Coupons. The site offers tips on how to live a more frugal lifestyle by incorporating couponing into the day-to-day happenings.

Financial planning is an important aspect that should be taken into consideration whether you run a business or just your personal budget. Unfortunately, many people fail to realize the importance of correct financial management and only pay importance to this matter when facing financial difficulties.

Financial Planning 101

Do you make shopping lists before going to the supermarket? What about wish-lists for products you want but cannot afford at that exact moment? This is exactly the essence of financial planning – determining what you need and afford at a certain time and finding the most convenient way and time to purchase those items. An efficient financial planning will allow you find out the most convenient way and the right time to make acquisitions without ending with a big hole in your budget.

Financial Planners – Do you need one?

There isn’t a straightforward answer to whether you need a professional financial planner or not, as it all depends on your personal lifestyle and needs. Here are the most common scenarios where a financial planner might be a good pick:

• Making a savings plan
• Making a retirement plan
• Making an investment

An efficient financial planner will help you get the most out of any of these scenarios. Using a financial planner is not the only way to obtain an efficient financial plan though.

Financial Planning Solutions

There are two approaches to financial planning:

• Using a professional financial planner
• Doing the financial planning yourself

Each solution comes with its advantages and disadvantages. While keeping track of the money yourself might work if you only have your own budget in sight, things will be more complicated if you run a business and need to handle a more complex financial balance.

Financial Planner – Advantages and Disadvantages

Using the services of a professional financial planner has a lot of advantages. As an expert in this field, a financial planner will evaluate your financial situation and come up with the solution that fits you best. They will also be able to predict your results, help you create financial goals and set up the required steps to achieve your goals.

The main downside of a professional financial planner is the price. Financial planners usually charge very high hourly-rates or per-project commissions that can add up to colossal amounts.

Do It Yourself – Advantages and Disadvantages

If a professional financial planner is out of your reach or you simply want to try financial planning yourself, the Internet is the best place to start. There are various formulas, sites and online tools that will allow you to set up an efficient financial plan.

The biggest advantage of this approach is that it’s free. The downside is that most solutions found on the Internet are general solutions for the most common scenarios and might not fit your personal financial situation. However, if you have the time and patience to search through blogs and forums, you might find some experienced people or even experts willing to help you with a custom solution.

Considerations

The best method to determine whether you need a financial planner or not is to objectively evaluate your situation and see if a financial planner would benefit you or not. If you decide to do it yourself, here’s a checklist to help you get started:

• Take the time to gather information;
• Use multiple information sources to ensure factual accuracy of the information;
• Take all variables into account.
• When going with a professional planner, here’s what you need to consider:
• Choose a professional that’s certified in your domain of interest (tax, insurance, investments, etc.)
• Choose a planner that’s dedicated to understanding your requirements and comes up with the most convenient solution;
• Choose a planner you feel comfortable talking with.

Following these simple tips and tricks will allow you to make the right choice for you and your budget.

References

http://en.wikipedia.org/wiki/Financial_planner
http://www.mybanktracker.com/bank-news/2010/04/20/is-having-a-personal-financial-advisor-necessary/

Further Reading and Resources

http://financialplan.about.com/
http://www.fpanet.org/