How to Become Your Own Financial Advisor: 6 Tips to Get Started

Whether you have a lot of money or you mostly live paycheck to paycheck, knowing exactly how to manage it and make the most of it can seem daunting.

However, you don’t need a professional if you spend just a little time learning the basics of good money management.

Here’s our quick guide to becoming your own financial advisor with 6 top tips …

1) Learn the Core Principles  

There are a lot of theories and complex detail in the realm of finance, but the core principles aren’t that difficult to understand. Once you know them, you can begin making smart decisions that will benefit you in the long-term.

There are 6 key areas that you should read up on—these are budgeting (managing your day-to-day finances), taxes (what you owe and what can be deducted), insurance (hedging against freak occurrences), investing (making your money work for you), retirement (saving for when you no longer work), and estate planning (what happens to your estate in the run-up to and after death).

2) Assess Your Current Situation

How can you give yourself advice if you don’t have a clear understanding of your current financial situation? The very first step, therefore, is to begin monitoring all of the money that you have coming in and all of the money that you typically spend. Simply note everything down on a pad or more formally in a spreadsheet over the next month and you’ll be in a much better position to begin planning your financial future. Is that payday loan in Florida a good idea or do you have other options?

It’s also wise to list all of your credit accounts (cards, loans, mortgage etc), your assets, insurance policies, and retirement accounts.

3) Set Goals

Now that you understand your current financial situation, it’s time to start setting goals for your future. This should include everything from how much you wish to save by the end of the year (assess your income and expenditure to budget a realistic weekly savings amount), to those long-term retirement dreams.

It’s all about starting now and building momentum. As your education on the principles of step one grow, you can begin applying it more effectively to your goals. 

4) Create a Plan of Action

Now you have a handle on your finances and have looked into the future and set your goals, it’s time to create a plan and put the steps in place to reach those goals. This involves constant budgeting and tweaking of that budget to ensure your savings are on track, putting those savings into stable and secure investments and taking an honest look at your career path and earnings potential. What do you need to do to get that promotion? 

5) Manage Your Behavior and Get Disciplined

Even if you have a good grounding in the basics of finance and know what you should be doing, actually having the self-discipline to do it can be the hardest part. Emotions cloud our judgment and the simplest of triggers (a bad day at work) can lead to impulse buying and bad decision-making.

To be a success in managing your money, you need to be able to manage your behavior and your responses to outside pressure. You can’t change yourself overnight, but opting not to waste money on ice cream this week, will lead to bigger things next month—baby steps. 

6) Make Use of Technology

Websites, apps and other tech can help you manage your money when you don’t have a financial advisor. A good place to start is Mint—which tracks your incomings and outgoings, helps you budget, save, manage bills, and even track your credit score.

Many of these services will connect with your bank accounts, credit, and bill accounts for accurate reporting, so you don’t even have to enter the numbers yourself. However, machines won’t do everything for you, so try not to ignore the other tips. 

If you get started educating yourself today and quickly apply your knowledge, it won’t be long before you have smart control over your finances. Got any tips yourself? Let us know in the comments below!