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when to use a financial planner

6 Times When You Might Want to Use a Financial Planner

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Sure, your smart uncle or your wise mom might be the obvious place to go for financial advice—but are they the best place?

Times have changed since they were in their 20s and 30s and planning for the future sometimes requires a) someone more in tune with current financial realities and b) someone who is trained and objective.

Maybe it’s time for a financial planner?

A financial planner and a financial advisor are not always the same thing. A trained financial planner — think someone who has a recognized certification — can help you strategize how to meet goals and optimize your savings and investing. You might pay him or her only a fee (in fact many advertise they are fee-only and charge by the hour.)  

A financial advisor is a looser term that could apply to financial planners but could also apply to those who actively manage your money for you and may charge a percentage of your assets as their management cost. Do your research to see what’s right for you. Here are some scenarios when a professional might help.

When You Are Sitting on a Big Pile of Cash

Katie Gampietro Burke, a 31-year-old certified financial planner and founder of Jacksonville-based Wealth by Empowerment, said she has had some clients come to her with as much as $300,000 in cash, not sure what to do with it.

But as a result of their shyness toward investing and traditional advisors, young professionals are less financially savvy, Burke said. Her younger clients are working hard and earning good money, but struggle with how to manage those paychecks.  

If you have received an inheritance or other windfall, this might be a good time to reach out to a financial planner to make sure you’re doing the right thing.

When You’re Juggling Student and Home Loans

Shawn Tydlaska, the 35-year-old founder of Ballast Point Financial Planning in Burlingame, California, has married clients that are both accountants. They’ve been working with him since their early 20s, trying to manage their student loan debt along with other big ticket expenses like a mortgage on their condo.

“There’s a lot at stake,” he said. “I’ve seen people delay getting married and delay even just getting ready for a longer-term relationship because they don’t want to bring their student loan debt into the relationship.”

He advises his clients to make sure they understand the conditions of their loan — read the fine print—to make sure they are clear on what happens if you are disabled or pass away. He also makes sure they understand their options for student loan repayment plans, including refinancing student loans. At Earnest, for example, clients save an average of $21,810 through refinancing their student loans.

And don’t worry about delaying marriage, he said, because you can still file your taxes separately.

When You Don’t Understand Your Stock Options or Other Company Benefits

Tydlaska said a lot of his younger clients aren’t taking advantage of their employer benefit plans.

“They might to go one presentation, and I just find that they get so busy with life that they don’t take the time to revisit it,” he said.

One of the biggest sources of confusion is company stock. Many of his clients typically take the boilerplate plan. “Not only are you at risk for your livelihood if your company were to go under, but also your nest egg is wrapped up in that,” he said, recommending instead that clients make the company stock a smaller percentage of their plan or offer.

He also advises clients to enroll in their company’s HSA or health savings account.

“I like the HSA because you can put money in there on a pre-tax basis and it can grow and grow and grow,” he said. “If you use it for medical expenses at retirement, you are never taxed again.”

He also tells his clients to look into their smaller company benefits like commuter plans and health and wellness offers, which can save money.

Read more: Cash Versus Stock Options at a Startup

When You Need Help Raising–or Understanding–Your Credit Score

“It’s a game that you have to play, and you don’t get taught the rules,” Tydlaska said of credit scores.

He is finding many of his clients don’t understand the difference between good lines of credit, like mortgages, and “bad” credit, like high APR credit cards.

“I’ve been shocked that people don’t have a good handle on their credit scores,” he said, especially since sites like Credit Karma offer free credit checks. Other clients, he said, have collections on their reports and don’t even know about it.

While you don’t need a financial planner to access and check your own credit report, if you need help strategizing how you plan to use credit over the coming years—say refinancing student loans, buying a house, or getting another degree, you might consider talking to a financial planner.

Read more: How to Read Your Credit Report

When You Need to Get Your Spending Habits Under Control

“Deep down people know what they’re spending and whether they are living beyond their means,” Tydlaska said. Hiring an advisor can help them face it and start over.

“There’s no judgment on what got you here,” he said.

Burke advises her clients to imagine putting their paychecks in money buckets–one for emergencies, one for rent or a mortgage, one for bills, one for travel, one for savings. What she wants, Burke said, is to give them the security are working so hard to create for themselves.

“We’re so busy with working and meeting up with people. We don’t work a 40-hour week,” she said. “Millennials say having a flexible schedule and travel is important, but they’re working their butts off.”

Read more: How to Make a Budget in 5 Steps

When You and Partner Fight About Money

If you are married or living with a partner, you both need to involved with the finances.

“I won’t work with somebody if they don’t want their significant other involved,” Burke said, still cringing that she turned away a $5 million referral because the husband did not want his wife involved. “That is something I pride myself on … making sure that everyone that is involved is in the know.”

Tydlaska said he finds himself playing the role of mediator with some couples. “They just want a professional to give their opinion,” he said. “It’s like a therapist almost.”

One of his first clients – a couple – quickly admitted finances were putting a huge strain on their marriage.

“The wife just broke down into tears,” he said. “It’s a very emotional topic.”

Tydlaska said a good financial advisor would do the research and give an unbiased opinion and empower the clients to make their own decisions.

But Who to Choose?

If you like your bank, you might start there and ask what kinds of financial planning services they offer. Another option is to look through the XY Planning Network, which has a network of fee-only advisors to choose from and who specialize in younger clients. LearnVest is an online platform that offers general financial planning services for less than $500.

“All of my clients are within 10 years of my age,” said Sophia Bera, a 32-year-old certified financial planner whose firm, Gen Y Planning, caters to younger professionals. “And I can relate to them.”

“It’s helpful to have somebody that understands the stage of life you’re in and what your money values are,” Bera said. “I don’t want to say ‘Hey we need to invest all this cash,’ and you tell me ‘Actually, in six months I want to quit my job and travel around the world for three months.’”

Conquer your student debt. Refinance now.

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Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.