An African American couple looks at each other with worried faces. They are sitting in front of a computer with financial documents.
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Financial stress is normal for many Americans, with two-thirds saying they live paycheck to paycheck.
Even if you have enough money to cover your bills, the rising costs of housing and groceries over the past few years have strained many Americans’ household budgets.
Recent research suggests that hiring a financial advisor may help alleviate some of these fears.
74% of people feel less stressed by using a financial advisor
According to a study by Edelman Financial Engines, 74% of people say they feel less stressed about their finances because they work with a financial professional. And among those who have a financial advisor, nearly two-thirds say they wish they had hired one sooner.
The biggest stressors for Americans right now are inflation, the economy, and personal finances.
These results are perhaps not surprising given the recent rise in Americans’ biggest expenses, including significant increases in:
Median home price has increased 31% in the past four years
Rental prices have increased by 29% since the pandemic
Food prices have increased by about 20% in the past four years
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How a financial planner can help
A financial planner can’t lower rising costs (which would be great, right?), but they can help guide you in the right financial direction. For example, the report states that most people hire advisors to:
A good financial planner can help you create a financial roadmap and help you reach your predetermined goals.
For example, let’s say you need to pay off your debt, but you don’t know where to start. A financial advisor can help you decide which debts to tackle first and how much you should pay towards them each month. It can also help you decide how to build your emergency fund to avoid accruing more debt.
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How to find the right financial advisor for you
There’s a lot of financial advice out there these days, but not all of it is good. One easy way to find a good financial planner is to search on the National Association of Personal Financial Planners (NAPFA) website.
There are two important reasons why you might want to start there.
1. You can search for planners exclusively for trustees.
When a financial planner acts as a fiduciary, it means they are committed to acting in the client’s best interests, not their own. All of their recommendations are focused on improving your finances, not theirs.
2. Financial planners are compensated.
This means you’ll pay a flat fee for services like retirement planning and debt management, and your financial planner won’t try to sell you services or products you don’t need. Rates range from $100 to several hundred dollars per hour. While it may seem expensive, keep in mind that you may only need to meet with a financial planner once or twice a year.
If you’re living paycheck to paycheck or don’t know how to get out of debt or start investing, you may want to talk to a financial planner. Not only will you have a clear plan to improve your finances, but planning will also be much less stressful.
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