How to Know If You Need a Financial Planner

A financial planner is different than an accountant in that a planner will work with you to create a plan or structure for your finances. This may be done to pay down debt, plan your retirements, grow your finances, and so on. An accountant may help you with money you already have, whereas a planner will help you to make plans for money you'll need for the future or for how to deal with money you owe. Note when it's good to consider the services of a financial planner and how to know if you need one.

1. When you have large amounts of debt.

Don't assume that you need to be rich to hire a financial planner, as they can actually be very good to use when you have more debt than you have income, or have so much debt that you're sure you will never recover from it. Trying to simply pay down this debt by making small monthly payments is usually a mistake; you may only be paying on the interest and not the debt itself. 

A financial planner can work with you to structure a repayment plan that actually pays down the debt; this might include a consolidation loan or home equity loan, or a form of bankruptcy that excuses some debt while paying down other debt. They can also help you create a budget that will keep you out of future debt.

2. When you have goals that will involve large amounts of money.

If you want to start a business, buy a house, retire early, or do anything that will involve large amounts of money that you don't currently have, a financial planner is vital. He or she will help you to better understand how to make your money grow so that you have the finances you'll need for your goal, rather than leaving this to chance or assuming you'll deal with needed finances at a later date. A financial planner can also help you to understand your options for loans, grants, trusts, and other arrangements that can provide you with the finances you'll need to reach your goals, and help you see how much time you may need to get the finances necessary for those goals. 

 3. If you have money that you don't know what to do with.

If you're one of the fortunate few who has money in savings and it's not growing substantially, you want to call a financial planner. Money typically loses value over time, as the cost of living goes up while your savings accounts remain the same. A financial planner can help you to grow your accounts so your money works for you and doesn't simply sit in a savings account, earning very little interest.