Do you need a financial planner?

BlogHer Original Post

Most of us are either experiencing the effects of the current recession or know others who are. It raises the question: Do you need a financial planner?

In order to help answer this question I enlisted the expertise of Cathy Curtis. With her firm Curtis Financial Planning "for savvy women, their families and their business," from "playing business" as a young girl to building a career as a Certified Financial Planner and Registered Investment Advisor, Curtis "is motivated by personal passion and satisfaction and specializes in helping women to work through their unique financial issues."

Q. What is financial planning?

A. Financial planning is a process that:
1. Clarifies Financial Goals and Objectives - What do you want your money to provide you?
2. Evaluate the current state of a person's finances - Do you have enough to get there?
3. Come up with solutions: What do you need to do to get what you want?

Q. Do women need financial planners?

A. It depends on the woman, but I think most women can use the help that a trusted financial advisor can offer. In my experience, education is financial matters is not widespread, our educational system has not supported personal financial planning curriculum and many women do not have the time or frankly, the interest to spend a lot of time learning. In consequence, they are open to making mistakes due to inaction or to lack of knowledge.

Q. Many of us don't want to open our 401k and IRA statements these days. Even Warren Buffett lost money during this recession. It seems like a crazy time to invest. Should I consider it?

A. Yes, if you need to fund your financial goals and retirement with your savings (and not an inheritance or some other income), then now is a good time to invest. Stocks are much more reasonably valued now and there is a lot less risk in investing in the market. Stocks are likely to stay volatile, but volatility in inherent to stocks, it does not mean the market will always go down. To the contrary, the long term historical trend has always been positive.

Q. How do I figure out what if any money I have to invest? How do I prioritize my budget?

A. The first exercise I have my financial planning clients complete is a cash flow worksheet which details their expenses and their income. Is the bottom line positive or negative? If positive, great, this is the money to put into savings. If not, or if the positive outcome is not adequate to meet goals, then spending needs to be curtailed (or income needs to go up.) Since most people have more control over their spending, this is where to start.

Look at your spending habits and identify areas of "weakness" in the discretionary area. Do you spend too much on dining out, too much on clothing or jewelry, or electronic equipment? Set a new lower budget for these items and track your spending monthly. Write down what you spend in these categories each time your wallet comes out. The extra money you save each month can go into savings, preferably via auto-deposit. Or, you may realize that your rent is too high and that in order to save you need to take on a roommate or find a new place with roommates, plan do do this.

You will need to spend some time thinking about what is most important to you, cutting back on the things that aren't, in order to leave room for savings for financial goals and retirement.

Q. Even if I am not able to invest at this time can a financial planner help me?

A. Yes, many financial planners help with planning not just investing. It is key to find the right planner. I advise looking for a fee-only planner or a hourly planner. These planners offer advice for a fee, they do not have to sell a product to earn income.

Q. With all the stories about Bernie Madoff in the news, I don't know if I should trust financial advisers. How do I find a financial planner I can trust?

A. Go to the National Association of Personal Financial Advisors website www.napfa.org and read up on fee-only advisors. Also check FINRA's website for consumer information on the financial services industry www.finra.org. You can also check out the Garrett Network www.garrettnetwork.com

Q. What one piece of advice would you give to readers who might be considering how to develop a financial plan?

A. Go to my website to the Get Started Link, and start filling out the questionnaires. http://www.curtisfinancialplanning.com/wheretostart.html

Thanks, Cathy for your time answering these questions about financial planning.

How have any of you found financial planning helpful? Do you work with a financial planner? What does having a financial planner do for someone that she can't do on her own? Know of any great financial planning resources or financial planners who blog? Please do share in the comments!

Related Reading:

Sharmeen Noor at Sapna Magazine: Save Your Green: 20 Ways to Fatten Your Wallet

Barry Welford at Senior Money Memos: Women Need Financial Freedom

Laurie Pawlik-Kienlen at Quips and Tips for Achieving Your Goals: Financial Planning Tips for Women

Pam Gilberd at Success Television: How to Create a Financial Plan

Erica at swirlspice: Take the Power: Tools for Life and Financial Planning

Lisa at Greener Pastures: Personal Finance presents Carnival of Debt Reduction #183 - Women's History Month

Susan at Practicing Thrift: Personal Finance for Moms

Sandi Duffy at Type-A Mom: Financial Planning for Widowed Moms

Nora Dunn at WiseBread: Estate Planning: Why Me?

Pinyo at Moolanomy: Roadmap To A Better Financial Health

BluntMoney: Planning brings freedom

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