Financial planning is not just about creating a budget and using your money wisely, although both tasks are part of the entire process. Newer financial advisers are encouraging people to look at financial planning in a more holistic view. That is, taking life-centered approach to allocating resources to life goals in the present and future. If you are planning to take on this route, you should start by familiarizing different misconceptions about financial planning.
A financial planner…
Helps me handle my taxes
A comprehensive financial planner not only helps you understand taxes but how a particular investment decision can have tax consequences by utilizing tax calculators. Generally, he will guide you on how to make a sound decision, one that will not affect other areas in your life or other assets, and help you reach your overall life goals.
Provide measurable financial goals
You need more than just a good budget to achieve financial freedom or stability. You must have a map that will show you the right direction and ensure that you don’t get sidetracked. For example, if you want to make sure that you will be able to live your retirement to the fullest, a financial planner will give you pointers on what is required to achieve your future plans.
Is just for the wealthy
This is probably the most common misconception, and for good reason. Financial planners don’t exactly provide free services, and paying someone to put your financial house in order may not seem ideal giving your not-so substantial income. Here’s the thing, the more you need proper money management if you earn less and have more debts. Since everyone needs planning, it doesn’t matter if you are young or old either. It’s a process that will benefit people from all demographic and economic backgrounds. Do you still think financial planning is not for you?