If you already have a clear understanding of the benefits of financial planning, then your next step should be to determine how you would like to create one. I understand that the creation of a financial plan can be a daunting task, however don’t worry, you have a few financial planning options to choose from.
With so many different companies providing financial planning services, figuring out the best one for your specific needs can be challenging. When deciding what financial planning solution is the idea fit for you, consider the following options along with their advantages and disadvantages.
Hire a Professional Financial Planner
Hiring a professional to develop your financial plan has many advantages. First a financial planner has the education and experience to help you navigate tricky financial situations. In addition professional financial planners have many savvy resources (such as premium investment research and complex mathematical models) to assist in the creation of a robust financial plan.
Please keep in mind that not all practicing financial advisors have the exact education, skills and experience needed to create a great financial plan. Many banks and commission based financial advisory firms hire anyone who is willing to sell financial products. Make sure you do your research before hiring a professional financial planner.
Find a Financial Coach or Mentor
Despite the advantages of hiring a professional, many of us only need a little help getting through a rough patch. Finding a financial coach or mentor can often be a better option than hiring a professional financial advisor. This is due to the nature of the relationship between a mentor and mentee being based in mutual respect and friendship, rather than a strictly commercial arrangement.
Regardless of the advantages of seeking a financial coach or mentor, there are a few things to consider before choosing this option. First your financial situation may be too complex and a professional could provide more expertise and knowledge. Second, you might not feel comfortable sharing your financial challenges with a friend or family member.
Overall, if you have a friend or family member who is financially savvy, take the time to explore this financial planning option. I firmly believe that this is the best alternative for anyone looking to create a financial plan or at least improve their financial situation.
Create Your Own Financial Plan
Finally, you also have the option to create your own financial plan. While your familiarity with the financial planning process may be limited, no one understands your life’s goals and financial situation as well as you do.
In addition to saving a little money by creating your won financial plan, I also believe that making the effort to developing a financial plan highlights the importance of making sound financial decisions on a daily basis. In addition, there is much to be learned and discovered just by going through the financial planning process, thus the knowledge that you will gain is worth the time and effort.
If you choose to create your own financial plan, there are hundreds of great financial planning guides, books and blogs that can help you get started.
There are a variety of financial planning options to choose from. When choosing the option that best suits your needs, remember to take the time to research the alternatives. While a professional financial planner has all of the complicated tools needed to tackle complex financial challenges, more often than not a financial coach or mentor is all that is really needed.