Just A Little Encouragement

Money Talk

Whee, responsibility!

I hired a financial planner, and it is already changing my life, and so I am going to take a minute to explain why I think you should maybe do the same.

OK, so I have a very emotional relationship with money. A lot of people do, I imagine, but the extent to which my financial situation in any given moment has an immediate and profound effect on my mental state in that moment is kind of overwhelming. Literally, it goes like this: Book job –> happy. Do not book job –> utterly panicked, fully devastated, and completely incapable of taking a step back to realize that I’ve gone ahead and made the hustling lifestyle work for a solid fifteen years now, and will almost certainly continue to make it work going forward, because that’s just common sense.

It’s exhausting.

I also have a lot of magical thinking surrounding finances, wherein the balance in my bank account is capable of directing my purchasing decisions with zero foresight or strategy involved. Like the fact that I got a chunk of equity out of our old house? That absolutely needs to not factor into whether I can buy, say, a dress.

But does it? Oh, it does.

Which means I need to get that money out of my bank account STAT, and into a place where it does not play into my daily decision-making process. In other words: I need to invest it.

…How?

I have no idea. I’m pretty good at handling a lot of Big Logistical Life Issues – I know how to apply for HELOCs, how to buy and sell a house, how to pay estimated taxes, how to create an LLC, et cetera – but investments have never been something I’ve given a lot of thought to, because any extra money we’ve ever had has essentially gone into home ownership and renovation. And now I do not own a home. I also have two children, a divorce-in-progress, and a seriously fluctuating income. Hence: The financial planner (who I didn’t pluck out of thin air; I was referred by a friend who is stunningly on top of her finances and who I want to be just like when I grow up).

Here’s how it works (or at least how it worked in my particular case):

  1. Your first meeting is a phone call, during which you go over the most basic of basics – what your current situation is, what your goals are, etc. At the end of the call, you decide whether to set up an in-person meeting to learn more. (You should do this. It doesn’t cost you anything, and at the most fundamental level forces you to answer questions like “what are my financial goals?” out loud, which is always a good thing.)
  2. At your in-person meeting, you get more specific. You lay everything out on the table: How much money you have, your income (or, in my case, projected income), your expenses, your debt. You rank your goals – saving for retirement/buying a home/getting a handle on your budget/investing/etc – according to priority. My personal goals: figuring out how to invest my equity in a way that’s semi-liquid, in case of emergency, and really wrapping my mind around what’s coming in and what’s going out. Budgeting, in other words.
  3. There are a few different ways that you can work together, but what I decided to do is pay an annual flat fee (which is tiered, based on the complexity of your financial situation) that will provide me with weekly meetings during the setup process, then monthly check-ins to determine whether things are going in the right direction.
  4. Then comes the information-gathering process: You link all your accounts to their system (which is basically like Mint, except it actually works, and Mint does not), and start going through all of your expenses and categorizing them, so you can get a super clear picture of where your money is actually going.

…And that’s where I am in the process. Just the simple fact that I can log into a website and see, “Oh, October was a crazy-expensive month, but here is why (moving expenses, basically)” is taking my panic level down about eighty notches.

It’s also uncomfortable. Historically, I’ve always preferred to take an ad hoc approach to my budgeting because my income is so wildly unstable that any kind of “planning” feels like an exercise in futility…but it’s just me now. And I have two children. And blinders are no longer an option.

In other words: the more information I can get, the better. And so that’s what I’m going to do: inform myself, even if it’s a pain, and even if it makes me anxious. It’s just too important.

(GOD, I feel like an adult. I’m not sure I like it, but there you go.)

 

  • Becka

    What’s the general cost of a financial planner, ballpark? I’d like to have one but have assumed they’re expensive.

    • jordanreid

      it depends on the complexity of your financial situation (how much money you have, basically). I think for an annual fee it’s anywhere from 2k-15k (and up, but that would be for people with tons of investments and property, etc).

      • AM

        Even 2k/year seems like a lot of money to pay for very fundamental
        financial advice that seems to consist mostly of “spend less than you
        make.” I put myself through college and grad school on student loans and
        have weathered periods of unemployment (thanks, graduating in 2009) and
        I already have significant retirement savings and home equity in my
        mid-30s. The key to saving is really buying less than what your income
        might suggest you can afford, especially when it comes to the big ticket
        expenses like housing. It seems like you’re struggling to keep to a
        budget, and honestly, throwing thousands of dollars at a financial
        planner seems like a symptom of that issue, not a solution to it.

        • mara

          I kind of agree with this. It is a pain to not have a stable salary to budget, but spending less (way less) that you make is the best rule. While in college and a couple of years after, my husband and I didn’t eat out all that much or bought any clothes or unnecessary items, we lived in a cheap apartment and saved as much as we could. It was tight and sad at times, but we made it trough with no student loans.
          However, I can see where a financial planner can come handy. Investments are super difficult to understand, so having someone GOOD to help you make those decisions is important. Though, like AM said, a min 2k/year is a lot, so I assume you have a good chunk of money to invest to make that decision worth it.

  • mara

    Having a great financial planner is key. We went to talk to one once. Beware: some of them have their own agenda, and tried to sell us life insurance even though we already have it. If they spend more time on what you should buy instead of your financial goals and general financial stability, move on.

    On a separate note, Jordan. I’ve been trying to comment on other posts and the “im not robot” functionality didn’t let me. I guess it is working now, but it was so frustrating to write the comment and not being able to post it because as a guest!!

    • jordanreid

      ugh I’m sorry! if you keep having that problem email me, and I’ll see if I can figure it out on the back end.

  • foursixtwo

    A few years back, my husband and I met with a financial planner. We went through the whole bit with him and when we left his office, he was supposed to get us all set up in his system and then let us know when we were good to go.

    We never heard from him again. Calls unanswered. Emails unreturned. The MFer completely ghosted us.

    All we could figure is that once he got talking with us, he learned we didn’t have a ton of money and figured we weren’t worth his time and effort. We have more money now and still don’t have a financial planner because we really don’t want to risk repeating the experience of sharing our whole financial life with someone who bails. But, I’ve worried that we’ve made some not-ideal decisions without help from an expert. Even my friend who has an MBA and works in finance has an advisor of her own.

    If some company out there wanted to make this experience better without just turning it into a sales pitch for stuff we might not need, that would really be nice.

    • jordanreid

      I didn’t notice any kind of sales pitch at ALL. zero. the process with this planner in particular felt extremely straightforward and crystal-clear in terms of steps, expectations, and expenses.

  • Malibu Barbie

    Two weeks ago she needed financial assistance and used school uniforms, this week she’s investments, diamond earrings and Malibu. No wonder she feels like an imposter.

    • jordanreid

      I contain multitudes.

    • Staci Lawrence

      Malibu is a city not an amusement park. Investments and planning are smart and have nothing to do with your actual expenses and income. Details about earrings aren’t really your business. Why are you here? Go away garbage troll, you clearly don’t get it. She’s an artist, business owner, and mom in SoCal. This is our life here. We need help and we need the beach. Go Figure.

  • LA

    Jordan, serious question: you’ve said several times that your freelance income “is so wildly unstable” and leads to feelings of panic, exhaustion, devastation, etc. Why not just get a stable job?

    • jordanreid

      that’s an excellent question, and one I’ve given a lot of thought to. the reality is that the benefits of my career as it is (substantial albeit fluctuating earning potential, flexible schedule, lots of time with my kids…plus the fact that I LOVE what I do) outweigh the negatives. which isn’t to say that I don’t sometimes fantasize about just getting a weekly paycheck and having the kind of stability that certainly helps with things like, ohhhh, planning for the future – but this is what I do; a weird mix of projects that make me feel excited to sit down at my desk (sorry, dining room table, haha) every morning. not everything about it is ideal, but I wouldn’t trade my career for anything.

  • MFM

    Thanks for sharing the process. I’ve already thought about doing this but have relied on “self help” type books. Knwowing what it actually looks like is helping me decide whether or not to bite the bullet. Cheers.

    • jordanreid

      🙂 🙂

  • Jess

    I highly recommend checking out the You Need A Budget software and webapp – it has all of the budgeting functions you describe but is also a lot cheaper (about $5 a month.) I haven’t had money issues since fully committing to using it and I’m on a teachers income. There’s definitely a bit of a learning curve but it’s been life changing for me to know where every dollar is going.

    • jordanreid

      I’ve never heard of those – will check them out. thank you!

  • Adeline

    Do you know Farnoosh Torabi’s podcast ‘So Money’? Her general thing is financial advice for women, and while some episodes focus on specific guests, her general take is one I find super useful and interesting. It’s not all relevant to everyone, but it’s nicely empowering and I found it to be a great way to start becoming more financially literate when it comes to future investments etc. (I’m financially literate enough to hold my own in finance meetings at work, but turns out once you hit your 30s figuring out how/where/if to invest is a whole new world nothing had prepared me for).

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