Sometimes, You Get Ripped For Asking for Help

For this “Do-it-Yourself” Friday, I thought of talking about personal finance. This post is not about how to do it yourself but more about what is good to DIY and what’s not. Managing your money is like raising a child; it’s very personal and you think you are always the best person to do it. On a daily basis, this is true, but sometimes, there are situations requiring professional help. But because it’s a taboo topic, we all think that we are better off doing everything ourselves. Here’s where you should seek help and where you are getting ripped off if you ask for help .

Budgeting

Ten years ago, you might have needed professional help to do your budget. Financial information was hard to find. And when you found some great piece of information, it was darn boring to read! With the explosion of PF blogs and cool *free* budgeting apps and software you can download, there are no reasons why you would pay someone to help you with your budget.

There is tons of free information where you can not only learn about budgeting but you will also have fun! Fabulously Broke is a great example of that! And if you haven’t signed-up for our 10 Days to Control Your Finance email series, you are missing a great chance to improve your finances for free.

As for the budget itself, you can easily do it with an Excel spreadsheet (here’s a cool & free Excel budget spreadsheet to download) or use a free service such as Mint (don’t tell me you don’t have Mint’s app installed on your smartphone??).

Simply by listing your debt on a piece of paper with the amount paid per month and the interest charged, you will get a pretty good idea of where you should put your money first .

Retirement Plan

A retirement plan should include a few important points:

a)      Your personal information (salary, age, age at retirement, saving capacity, current investments).

b)      A Projection of your assets (how your investment / pension plan will grow over time)

c)       A projection of your withdrawals (how much and how long you can withdraw money)

As you can see, it may be difficult to plan your whole retirement by yourself. The good news is that most financial advisors have access to powerful retirement planning software and can do a retirement plan for free… Where’s the real cost? They will most likely ask you to invest with them or do the retirement plan only if you already have money invested with them.

The help of an advisor is useful to consider inflation, expected investment return, life expectancy (they use statistical tables according to your age), but the most important thing is the software they use.

Forbes made a list of the top retirement planning tools. Most of them cost a few hundred bucks but it could be a great investment if you are serious about doing it yourself. You can also get a great start with CNN free retirement calculator. However, if your situation is more complex than a regular income with a pension plan, the help of a professional may save you a lot of money.

Investing

This is where it gets tricky. Honestly, I think that the capacity to manage one’s investment depend on the interest of the person towards investing. If you don’t want to deal with your investments because numbers don’t appeal you, get a strong financial advisor to do your retirement plan and invest with him. Ask him about how much he charges and where the fees are attached to each investment product he sells you. Ask him to compare his investment products to other similar products from competitors to see how much you will pay in management fees. If he answers you, you just found an honest advisor!

If you are interested in investing but you are still a novice, I suggest looking into this free dividend investing eBook. This is a simple and straight forward book about learning the investment basics (starting with your investor profile and finishing with a simple investment strategy).

Will

Don’t you dare do this by yourself. Most people that do a handwritten will give nothing but a mountain of headaches to their heirs. I’ve seen too many estate problems related to wills to advise anyone to DIY. Get a professional for your will, period.

Insurance

I could probably write a whole series about insurance before you could assess your insurance needs (or you can subscribe to my newsletter and read about insurance basics on Day #4).

I think it’s important to do your own research about insurance planning before meeting with an insurance broker. Understanding the concepts of whole life and term life insurance is crucial before meeting with anybody (because brokers get paid a lot more for whole life insurances!). I’m currently preparing an interesting post about stages of life and insurance needs. I’ll get that for you by the end of the month .

Did I Forget Anything?

Is there any personal finance topic you would like to know whether you should do it by yourself or not? Did I forget anything important?

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