For many of us, it’s difficult to know what to do when it comes to our finances. There are so many decisions to make.
While the basic “live within your means” advice can apply, the reality is that there is more to money management than making sure that your expenses are smaller than your income. What do you do to save for retirement? What’s the best course of action when trying to pay down debt?
There’s a lot to think about, and it makes sense to carefully consider who you will trust for money advice.
Who Can You Turn To?
One of the more interesting bits of information I read recently is the fact that millennials trust their parents for financial advice. A recent study from Fidelity indicates that millennials view their parents as their top choice when it comes to getting trusted financial advice. I thought about this, and this is true for me as well, even though I am from Gen X.
However, even though I generally trust my parents, and I find talking to them about money helps me a lot, the reality is that I don’t really turn to them when it comes to investment advice. Instead, I look to fellow bloggers, and to people I know who have seen success with investing. Some of these folks are financial planners, but, in general, I don’t get a lot of help from financial planners.
I get tax input from my accountant (I’m disappointed that, because of my move, I will need to find a new accountant). It’s clear that I look to a number of different sources when it comes to getting advice on my finances. I even read books about finances to find new ideas about how to think about and manage money.
Watch Out for the Hype
You do need to watch out for the hype in a lot of cases, though. First of all, it’s important to look beyond the advice and see if you can figure out whether or not someone has an ulterior motive for offering the advice. If you are working with a financial planner who is paid commissions when you purchase certain financial products or make particular investments, you might be dealing with a bias you can’t really trust.
It’s also important to watch out for the hype that comes with financial gurus. Often their advice is very general, and it might not apply to your specific situation. It can make more sense to look to someone else for information about your specific situation. This is where a fee-only financial planner might be able to help. A Registered Investment Advisor might also be able to give you some direction. These are financial professionals that are more likely to help you do what’s best for you. Fee-only planners don’t get kickbacks for recommending different products, and RIAs are bound by law to recommend what’s best for your situation.
While these professionals can help you cut through the hype, you still need to be careful. After all, in the end, you are going to be the best guardian of your money. Take the time to get educated, and really learn about how money works, and then decide what is likely to be the best course of action for you.