Is a Financial Advisor Worth It?

counting pennies
By Christine H.

The average American pays over $8,000 per year simply in interest. That’s the amount that you’d be paying simply with a mortgage on a middle class house, one car payment, an average student loan burden, and one credit card with debt. Interest doesn’t do anything to pay off the principal (the amount you actually owe) and you don’t get any kind of return from it. In fact, it might just be the biggest waste of money possible (even worse than that second ab roller than you ordered and never used). If you’ve gotten into the habit of spreading out payments over a longer period of time, then it’s time for you to examine how much of your money is being sapped away with interest.

Sometimes It Takes Help to Get Out of the Pit

A budget and discipline, of course, are the keys to staying financially on top of things. However, for many of us, there’s more to it than that. Financial literacy isn’t taught in schools. It’s taught at home, which is one of the key reasons that children with wealthy parents grow up to be wealthy themselves. However, if you missed the lesson on finances, it’s still possible for you to change the story for yourself. Sometimes that takes extensive research, intense discipline, and some trial and error. Other times, it takes a financial advisor.

Now, I know what you’re thinking… “Whoa wait… if I’m struggling with money, why should I hire someone who’ll just charge me more per hour?” It can be hard to know where to turn for trustworthy help, especially if you think that you can handle it yourself, with just a little more motivation or discipline. However, for many people struggling to get a handle on debt, a financial advisor is a good solution.

Think of it like this: much like a mental health counselor, a financial advisor can troubleshoot problems, shed light on things that are hard for you to understand, and use their training and connections to find solutions that you never would have thought of.

young couple looking at finances

Debt Elimination Techniques from a Financial Advisor

There are a few techniques that a financial advisor will use to help you eliminate debt… things that you probably wouldn’t be able to do yourself.

  • Renegotiating your expenses: When you sit down to do your budget yourself, you probably list “medical fees,” “student loan payments,” and “mortgage” as inflexible costs. However, a good financial advisor can take a closer look at those payments. Sometimes, refinancing a loan will get you a better interest rate, especially if you’ve been reliable in your payment history, or if the market has changed. Other costs that seem set in stone, like medical payments, are also negotiable. Insurance companies barter the rates down all the time, but few laymen realize that they can do that too.
  • Consolidating debt: Essentially, with this process, you take out one big loan to pay off all your other debts, and then you’re only making payments to one resource. This can lower your monthly payment because it streamlines the fees and base rates. However, it can also increase your risk and payments if it’s done improperly. A financial advisor can help you decide the best way to consolidate your debts and simplify your monthly payments.
  • Prioritizing payments: Is it better to put all of your money towards your car payment so that you can have that particular monkey off your back sooner… or to spread your payments around so that you’re slowly chiseling away at each one? This will depend on the risk associated with each debt, the interest rate, and how much it affects your credit. A financial advisor can help you sort through the risk and long-term cost of each debt so that you can have a wise plan going forward.
  • Goal-oriented budgeting: The most simple budget will simply be a matter of crunching numbers so that you can make ends meet. However, goal-oriented budgeting helps you to pay off debt in a practical amount of time, and save for the future. A financial advisor can help you find creative ways to earn and save, and give you a level of responsible accountability that makes you better at sticking to a plan.

elderly couple meeting with advisor

How Can You Pick a Good Advisor?

Trusting your money with someone who knows more about it than you do is a vulnerable move. It’s important to have a financial advisor that you trust, and who believes in being transparent and in working with you to find the best solution for your specific needs.

Afortus Financial offers financial services customized for the needs of every individual from any demographic. We believe that financial success is accessible for everyone, whatever their history or situation. Instead of pushing a cookie-cutter plan, we work closely with our clients to establish a relationship of trust and help families find solutions that give results.

To learn more, find us at afortus.com.

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