Financial advisors are nothing but financial professionals with a calm and sensible mind. They help us to make the right decision when we get panicked and can’t decide what to do during a financial crisis. But, is it really necessary to depend on an unknown person’s view while making financial choices? The reasons below will show you why it makes sense to manage your own wealth.
a. You can use DIY method - Doing it yourself can save your extra cash which you need to pay the financial advisor. Think again, managing your money by your own method can be very exciting. But, you must also remember, you can make mistakes at any point in time because it is quite tough to make right choices on a regular basis.
b. Investment returns will motivate you to save - You may calculate the returns you’ll get from your investments, which will motivate you to save as much as possible. You may also understand that through reducing your daily spending, you can practically reduce your employment timeframe. So, as much you can save, by investing that amount you get much more in return.
c. Some advisors just ignore your retirement accounts - According to regulations, many financial advisors will deny entertaining your retirement account. Practically, the advisor is not at all completing his purpose of guiding you in every aspect of finance. So, you’ll end up wasting your money and time as you'll be only managing part of your finances.
d. You'll easily modify your plans as per your choice and circumstances - If anytime you want to change your financial plan, you can do it comfortably if you choose DIY method. You need to carefully calculate and allocate the percentage of money to each of the investment. You may also need to research about the tax laws and their effect on your tax benefits. Unfortunately, some of the financial advisors can’t handle all of these situations.
But, if you handle all your financial aspects and take all the major decisions solely, you can minimize your cost way better than any other person.
Now, the question would be how can you manage your finances wisely?
Here are the tips:
1. Make your financial assessment properly
You can’t create a plan of action if you don’t know your actual financial status, ups and downs and secrets. You first need to track each and every income and expenditure of yours.
Apart from your monthly income and expenses, take a look at your investments in stock, your assets, insurance if you have any, and your retirement savings details. Once you’ve got a fair idea about your current financial status, you can now think in much better ways, what to do next.
2. Identify your financial goals
After getting the information about your financial status, take a deep breath and think what would you do next to manage your financial future. It’s called making a financial goal. This must include your every future financial step whether it may be long-term or short-term. Long-term goals may include buying a house through a mortgage, buying a car through a loan, opting a new insurance policy and retirement saving investments. On the other hand, short-term goals may include paying off your debts, having a vacation abroad, or may be arranging a party at your place.
3. Make a solid plan
You need to make a solid plan about the method and ways you’re gonna take for a financially secured future. This is where the idea of budgeting comes to the light. You’ve already made an estimation of your monthly income and expenses. So, you may use a monthly budget allowance system that’ll support your daily needs for the whole month. Try not to cross the budget limit and also try to save as much as possible.
4. Research well before you leap
You must do good research before taking any action or decision regarding different financial aspects like retirement funds, estate planning, asset allocation etc. If you want to take the place of a professional financial advisor, you must be updated with information and trusted online media sources. You can also discuss with your lawyer, accountant, or any senior person to guide you regarding any of those matters.