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What Does A Financial Planner Do?
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That's a good question, isn't it? Let's say you live in Richmond, Virginia, where would you look for one of these specialists? On the internet would be a good bet or in the phone book or a recommendation from a trusted friend would be a good place to start. The next thing you need to know is that there is one that is the Fee only Financial planner In Richmond. These planners also usually include personal tax planning In Richmond as a part of their practice. The second kind is the non fee based planners, these planners work strictly on commissions they earn from products they sell you.
We're going to answer all of these questions, but first, let's start off with a seemingly simple question, why is money important to you? Of course, it's important so you can pay the bills and go on vacation and things like that but why is it important to you? This is a great question because once you know the answer, that answer will drive every financial planning decision you make from here on. In answering this question many people find it easy to write down a list of their financial goals: Fund their retirement program, save for their children's education, save enough money to buy a home.
The next step is actually two parts. Number one is to know exactly where you are starting from and number two knows exactly where you are going. The first one seems to be easy, but you need a list of your assets, liabilities, and the debts you owe and a list of money owed to you. With this information, you can get a reasonable net worth statement, which will be your starting point. Where you are going is a bit trickier. Anything can happen that can completely change your game plan. You could lose your job, you could become ill, you could have an accident. This is why we set up your savings plan as an emergency fund for just these sorts of situations. This also brings up the point that you should always have a backup plan or a plan B. A plan B scenario is just a backup if everything else goes to hell. Sometimes it does and having a backup and other options in mind is a great idea.
On budgeting for your life and your family look at your budget as a tool for tracking your spending habits. People spend many times more than they should on the stuff they just don't need and can't afford. Here's a test you can try for yourself. The next time you see something you just can't live without, write down the item and the price and then wait for 36hrs before you actually buy it. If after that time you are certain you have to have it and can't live without it then buy it. Your Fee only Financial planner In Richmond and your professional personal tax planning in Richmond can also help you with this but here's what I think will happen. After the time has elapsed, you won't buy that thing you couldn't live without and you'll say to yourself, “What was I thinking?” The next thing you need to do is save as much as you comfortably can. Be biblical, save 10% of your net income. Put it in a savings account for emergencies. You should also buy some life insurance but just as much as you need no more. In buying life insurance buy term insurance only do not buy whole life or any other variation of it. Hire a good financial planner that also has some knowledge of taxes to help you. The best ones, in my opinion, are the fee-based planners because they are less likely to have only that are strictly commissioned based.
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