You don’t need to hire a financial advisor to achieve your money goals, but it is important to listen to the advice passed down by experts in the field. Complicated questions like whether to pay off debt or save are best answered by those with a track record of success in those areas. For your convenience, we’ve gathered some of this “expert” advice for you.
The following tips come from several sources, including licensed RIAs and CFPs, financial coaches, and finance professionals who write online self-help articles. Each of these tips is a compilation of information we received from more than one of these professionals, so we’re not crediting specific individuals, other than Dave Ramsey for debt snowball.
Multiple financial advisors told us they wished their clients would educate themselves on personal finance. One CFP from Massachusetts stressed that “getting organized” is the most important step. That requires at least minimal knowledge of how personal finance works. Online courses are often free, so there’s no excuse not to do this.
Trying to do too much is a common mistake with individuals who want to check all the boxes right away. Emergency funds are a good example of this. Try making small, regular deposits into it instead of depositing large amounts you’ll end up withdrawing in non-emergency situations. Remember, slow and steady wins the race.
Old-school financial advisors take a long time to embrace new technology. The new rock stars in the field are those who understand that automation is the key to making progress in the 21st Century. Follow their lead by automating your long-term savings. The best way to do this is by reallocating some of your direct deposited paycheck to savings each week.
This one is from financial guru Dave Ramsey. Other financial professionals recommend it, but Ramsey is the creator of “debt snowball.” It’s a debt payoff plan where you focus on paying off your smallest balances first. Doing that gives you early momentum to build up for tackling larger bills. Human beings are successful when they hit frequent milestones.
All work and no play add up to a dull life. Even if you do hit your financial goals, there’s no real sense of accomplishment because you’re not rewarding yourself. Financial coaches recommend starting a vacation or recreation fund and making regular deposits into it to fulfill “fun goals.” It’s possible to achieve money goals and enjoy life at the same time.
They’re called “experts” because they have experience and knowledge that people outside their field do not. Financial advisors, CFPs, financial coaches, and knowledgeable financial writers do their research and understand what works and what doesn’t work. There are five simple tips in this article. Follow them and you’ll achieve your goals.