A financial consultant serves as an expert coach or guide to help you achieve your financial goals. Some people feel that they need one, while others may not feel like paying for financial advice.
However, reaching your goals is still something you may be able to do yourself. When it comes to financial management, the fees you might spend on hiring a consultant could be spent on other investments. Here are some tips to help you create a financial plan without hiring a consultant.
The first thing any consultant is going to talk to you about is your goals. What do you plan to do with your funds in the future? Do you want to retire early, start your own business or travel around the globe for a year? It is crucial to identify your goals, since these direct your next moves.
For example, if retiring early is your goal, then the actions you take after setting this goal are going to be different from someone whose goal is to pay off their debt, for example. Force yourself to set your own goals and determine what you want to happen in the next few years. This helps you figure out how you want to spend your money in the next few months or years.
Divide your goals into short-term and long-term goals. A long-term goal might be to buy your own house in the suburbs, while a short-term goal could be to move out of your parents’ home into your own studio apartment.
The following are some examples of financial goals:
- Creating a budget. This helps you to get a good idea of how much you are earning and spending.
- Paying off your debt. This is especially important if you have credit card debt. Over time, your credit card debt accrues interest, and it is best to focus on paying it down.
- Saving for a down payment to purchase a home. Typically, a down payment will be around 20 percent of the home’s cost.
Improving your credit score. With a good credit score, you may get a lower interest rate on loans, including a mortgage.