If you’re in your early to mid twenties, you may have been advised at some point to meet with a financial advisor. You may feel that you have your finances fairly well-managed or feel that you cannot afford to put out anymore money, however, so how do you know if it’s worth the upfront costs to hire a financial advisor? Meeting with a financial advisor is a smart move for many people and an investment in your future, but a comprehensive financial plan will typically set you back $1,000 to $2,000. As with any investment, you’ll have to weigh the costs with the benefits. Here the questions you should ask yourself to determine whether or not you need to meet with a financial advisor.
Are you planning on making a major payment soon?
If you are planning on making a major expense soon that will have a significant impact on your finances, such as making a down payment on a house, planning a wedding, or purchasing a new car, then it may be the perfect time to meet with a financial investor so that you can come up with a plan for how to manage this expense.
Do you feel lost in planning your financial future?
If you’re feeling lost keeping track of all of your expenses and you don’t enjoy managing money, then it may be worth meeting with a financial advisor to take any unnecessary pressure and stress off yourself. You already have another to think about just keeping up with your finances, so why not turn to an expert for some peace of mind? If you have enough money in an emergency savings fund to pull from, then you could pull from that to invest in a financial planner. If the advisor does their job right, the upfront fee will pay for itself in a few years!
Do you need an unbiased opinion?
If you go to family or friends for financial advice, they may not be completely honest with you about your financial situation. Additionally, you can’t compete with Wall Street. No matter how much you or anyone else knows about investing, you’re human and prone to mistakes. According to moneyunder30.com, “If paying a financial advisor saves you from one bad decision a year—or spots an opportunity that you overlooked—he or she may very well increase your investment returns, despite the fee.”
Have you done your homework yet?
You should be fully prepared before meeting with a financial advisor so that you don’t waste their time or your own. According to Forbes, you should do your “homework,” and have a firm understanding of your financial goals, know your limits and how much you can afford to lose, identify your fixed and variable expenses, and prepare an income statement and personal balance sheet.