Money Monday: Get Some Help

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Quit relying on personal and family history, and get a qualified professional to help steward your money.

Managing your finances in 2024 may require you to seek advice for those more knowledgeable. But identifying the right person or who should be your adviser can be confusing. Some of the difficulty in this process is rooted in your personal relationship and experience with money. If you were raised in a single family home or a two income family home with different incomes, raised during a recession, lived in a certain neighborhood and hold certain values, your financial lens and choice of an adviser will be based upon those experiences.

One writer says that 80% of how we think and behave about money is based upon our personal experiences. In other words, you are more likely to respond and behave financially based upon your history than taking advice from some third party. What seems insane financially to some people, makes common sense to others. An example would be gambling or lottery participation. More low income families purchase lottery tickets spending between $400 and $500 annually. Low income families spend more than four times what higher income families spend on lottery. Not to mention that low income families do not have as much as $400 in their emergency fund! So, to some that makes sense while to other it would seem crazy.

Whatever your history or experiences, there are fundamental factors to consider, analyze and evaluate when considering financial advice.

Qualifications: In an ecosystem with so many experts its challenging to know who is qualified, what their qualification means and how they can meet your needs.

  • Chartered Financial Analyst (CFA)  A CFA’s credentials mean they are able to give investment advice and create or design your financial portfolio. To obtain these qualifications, a person must have been successful in taking a three part exam and have acquired three years of related experience. If you are focused on investing this year, you might want to consider a conversation with such a professional.
  • Certified Public Accountant (CPA)  While each state license requirement is different, CPA’s are generally required to have more than a four year degree, some years of experience and pass a rigorous exam which includes a core section on tax and regulations.
  • Personal Financial Specialist (PFS) This designation shows expertise in wealth management and financial planning, and you may interested in knowing whether your CPA is also a PFS. The CPA would need to have demonstrated five years in financial planning, and pass an additional exam.
  • Certified Financial Planner (CFP) The CFP provides a broad range of services that you may consider advantageous if you like the one-stop-shop approach. These individuals provide investing, insurance, budgeting and other financial planning services. The most important question to ask with regards to their qualification is whether or not the person is a fiduciary. That means they put your best interest above their own self interest and benefit. This is also significant because someone may say they are a Financial Advisor but may not be a CFP. While CFP’s may call themselves financial advisors, not all financial advisors are CFPs, and therefore not fiduciaries.

There are several other sources from which you may seek advice as you manage your finances this year. These include Chartered Financial Consultant (CHFC), Registered Investment Advisor (RIA), Chartered Life Underwriter (CLU) and Retirement Income Certified Professional (RICP). Next week we will look at cost and other options as you plan to become a better steward in 2024.

THAT’S WHAT’S UP!

Today’s What’s Up is about credit card debt. Consumer credit card debt has now exceeded pre-pandemic levels, which simply means that people are relying on their credit cards more to manage their finances. The popular belief is that credit cards should be used in emergencies. I would push back and say, you need to have an emergency fund available before even using your credit card. There are options available if your credit card balances are high such as consolidation and credit card balance transfers. You should focus on eliminating your cards with the lowest balances first and then proceed to the next one. Also, avoid at all cost, store credit cards. And that’s what’s up! Ruthven R. Phillip, Esq., is a tax attorney, Stewardship and Philanthropy Ministry Assistant, and CEO of Give2Getrich, LLC. Give2Get Rich, LLC 2023. All Rights Reserved. Any distribution or reproduction of part or all of the contents in any form is prohibited.

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