Should hiring a financial planner be on your list of 2023 resolutions?
Should Hiring a Financial Planner be on Your List of 2023 Resolutions?
When is the right time to think about leveling up your finance game with the assistance of a professional?
I used to make New Year’s resolutions and abandon them with great fervor. Always hoping to turn over a new leaf (or a new life) at the close of one year and the start of another. As I’ve gotten older, I don’t sit down and make resolutions in the same way I used to. But I still see the end of a year and the beginning of a new one as a good time to pause, reflect, and set a few intentions.
Whether you approach the New Year with resolutions, re-centered intentions, or simply a list of items you’d like to get done in 2023, you may be wondering if hiring a financial planner should be on that list.
Though experts estimate that annually, 40% to 50% of resolution-setters set goals about money, not all goals about money require a financial planner. In fact, particularly in your early career and earning years, depending on the complexity of your financial situation, you may be better off focusing on the financial basics: getting your debt paid off, building up an emergency savings, and starting a clear and consistent retirement savings plan. And for many people, a lot of these tasks don’t require the assistance of a financial planner.
So, when is the right time to think about leveling up your finance game with the assistance of a professional? Below is a list of signs that it might be time to add “hiring a financial planner,” to your 2023 list.
1. You’ve got a lot of moving parts and a building list of uncertainties
You’ve got a partner, a mortgage, a college savings plan for your kids, and 7 different retirement accounts from different jobs, but you have no idea whether you’re on track to pay for college or retirement. You’ve got money in emergency savings, but is it too much? Or too little? People you know keep talking about life insurance, but do you really need that, and how much, and what kind?
If this feels like you, stop reading and start looking for a financial planner. The most common thing I hear from clients when we start working together is that they feel overwhelmed by the number of financial decisions they are making, and they’re not sure they are making them correctly. They don’t know what they don’t know, and they’re worried they’re missing something big. And they really have no idea if they’re going to die still working at their standing desks or be able to retire when they’re 50.
A good financial planner should be able to take all of this, unpack it, and lay it out for you in a way that leaves you feeling clear and confident in your next financial steps. It may feel like a big investment now, but think of all the brain space you’ll recover from not constantly worrying about these things, and put hiring a financial planner on your “to do” list for 2023.
2. You’re on the cusp of a big transition like retirement
You’ve been a do-it-yourselfer in the finance world for a long time, but now you’re getting ready to retire (or undertake some other major financial transition in life), and you just want to make sure you’re okay.
Going from the savings and accumulating years in life, to the “funding the rest of your life from savings” stage is an enormous jump. While not everyone needs to work with a financial planner to do this, it’s common for a DIY investor to seek out the assistance of a professional at this time for a “gut-check,” and a financial planner’s fee is a good investment to make before giving up your day job. A financial planner will be able to give you a clear and structured set of guidelines for investments, retirement account distributions, and even Medicare and Social Security decisions. And while it’s possible they may simply validate that you’re ready to retire and on the right track, in many cases they can also find financial planning opportunities or vulnerabilities that may have escaped your notice.
3. You’ve accomplished many of your financial goals, but you’re not sure what comes next
You feel confident that you’re on the right track for retirement and your other long-term financial goals. Maybe you’ve paid off your house (or have a clear plan to), and you’re starting to wonder, what comes next? Is there more travel in your future? Can you afford a second home? Is transitioning to part time work or a job that causes you less stress a possibility?
Working with a financial planner can be great if you are feeling good about your financial situation, but also wondering “what’s possible now?” A financial planner can not only help you clarify your goals, they can also help you make a clear plan to accomplish whatever comes next.
4. You’re still working on the basics, but you’re not getting anywhere
If credit card debt payoff and accumulating a reasonable emergency fund has been on your list of resolutions for years, but your debt keeps growing and your savings account is still empty, it may be time to consider working with a financial planner to help you make a plan, and to hold you accountable to it.
This can be a tough spot. If you’re in this category, the fee to hire a financial planner can feel like just another expense keeping you from reaching your goals. However, it may be time to be honest with yourself about your need for professional support. The truth is, if you’re ready to hunker down and make the change, the investment in someone to plan and hold you accountable may be invaluable to your financial future.
If you’re ready to get some support, but there is just no way to pay for it out of pocket right now, several organizations seek to connect qualified candidates with financial coaching, planning, and credit management resources that may be a good place to start.
The Association for Financial Counseling and Planning Education connects anyone, regardless of income level, to an accredited financial counselor for free if they need someone to answer their financial questions or help them make a plan.
For those specifically struggling with debt, the National Foundation for Credit Counseling can connect you with a credit counselor free of charge, regardless of your income levels.
For women, Saavy Ladies is another great financial resource with a robust library and a help-line where women can get their specific money questions answered.
Lastly, the Financial Planning Association maintains a database of financial planners who provide pro-bono financial planning services to those who qualify based on income or disadvantaged status. If you qualify for this service, this is a great place to look if you are trying to find a longer-term relationship with a financial planner.
If you are ready to hire a financial planner in 2023, what do you do next?
- Make a list of what’s on your mind financially and make sure to go over that with the planners you interview. Some financial advisors still primarily serve as investment-only experts, while a growing group of Certified Financial Planners® have the expertise to advise you on a much broader range of financial topics.
- Consider whether you want a local planner who can provide in-person services, or whether you’re comfortable with virtual services.
- tart your search: XY Planning Network, NAPFA, and The CFP® Board all maintain a database of fiduciary financial planners with CFP® certifications, and these are all great places to start looking.
- Schedule times to interview prospective planners. It’s a good idea to meet with a few folks to see what’s out there, and to find someone who is the right fit for the planning need that you have. If you schedule 3 interviews and none of them feel quite right, go back to the search engines to keep looking. Finding a planner who connects with you and is the right person to meet your needs is critically important to the success of this endeavor, so don’t get discouraged if the first one you talk to isn’t the right fit.
Looking for someone to help with your 2023 financial planning needs?
