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.
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.
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):
- 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.)
- 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.
- 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.
- 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.)