How to decide what financial advice to follow

By: Tom Drake on August 29, 2016

Every now and then, we need help with our finances. In some cases, we feel completely overwhelmed and want good financial advice to provide guidance for the future. While putting your money with a robo-advisor can be a good start for long-term investing, sometimes you want help that is a little more detailed. Here are some things to consider when deciding what financial advice to follow:

What stage of your financial life are you in?

Different financial advice applies for different stages of your money life. If you are desperately trying to get out of debt, it doesn’t make a ton of sense to jump to advance investing techniques. Figure out what stage of your life you’re in, and look for financial gurus and advisors that focus on that area. It’s not a bad thing to start with one financial guru and then move to someone with a different specialty later, as you progress with your money.

Who shares your values?

At some point, you want to look for someone who shares your values. If you want to learn how to use credit card rewards programs to boost your finances, it doesn’t make sense to choose financial advice from someone who is opposed to using credit cards at all. Figure out what makes sense for your values and goals, and then look for financial advice from people who have similar values and goals. While personal finance is truly personal, and you want to tailor what you find to your own situation, it’s a good start to look for someone who is on the same page that you are.

Do they have experience with money?

This doesn’t mean that you have to only look for financial advice from someone who has the “right” credentials (although that can help). In some cases, it just makes sense to get a little information and advice from someone who has been where you are.

If you want to make your mortgage tax-deductible, you can learn from someone who has used the Smith Manoeuvre with good success. If you hope to pay off your credit card debt, look at someone who has gotten rid of their own debt using the debt snowball method. Following a good investor can help you learn how to make better investing choices.

More advanced financial advice: what are the qualifications?

If you know that you need more in-depth help, just reading the words of a financial guru online might not be enough to help you improve your finances. Perhaps you need to turn to a financial professional to help you create a plan. If this is the case, look for someone who is a certified financial planner, coach, or chartered financial professional. There are different organizations that certify professionals. Check to see if you are getting this type of financial advice from someone who has the education and regulatory knowledge to help you take your plan to the next level.

In some cases, your money might need even more than a roadmap to success. In these cases, you might actually want a money manager. It’s especially important to get the right credentials when you are looking for a money manager. You want someone who will follow the highest code of ethics because you are trusting them with your assets – and hoping that they will take care of things for you. Wealthy people use money managers, and you might get to that point eventually.

Bottom line

No one is going to care about your money in the same way you will. However, you can improve the chances that you get the right money advice for you by looking at the source of your financial advice. Start by considering your own money needs, then look for someone who has similar experiences, or who has the designations and the education to provide you with insight that you might not have right now.

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