Here’s why you shouldn’t DIY your financial planning

You budget, plan, save and spend wisely – so do you need a money expert to help you with your finances? You do. Here are five reasons why.

1. You’re too close to your money

When we’re too close to something we often lose sight of the big picture, allow our emotions to take control and sometimes make poor decisions.

It’s good to care deeply about your money and how you spend it. But it’s also good to get an objective view of how you are managing your money. An independent eye can point out areas where you can improve, and what you are doing well so you can do more of it.

“It often makes sense to tap into the knowledge of a coach to give you an outsider’s view on your situation,” says Warren Ingram in his book Become your own financial advisor.

2. Experience counts

When we’re in new situations we tend to feel our way around until we find the right way to deal with it. Trial and error is a great way to learn. It can also be a very expensive exercise. What if you’re wasting money by trying new things?

Financial advisors and financial institutions have experience in many financial matters, having studied and learned and experienced different situations with a range of different clients. They can help you do it right the first time, which could put extra Rands in your wallet.

3. There is so much choice and information

Have you heard of infoxication, infobesity and data smog? These are all terms for too much information – or TMI. Quite simply, there is information overload.

One of the consequences of information overload is that we find it difficult to make decisions. Where should I invest? What medical aid or insurance plan should I choose? Is that a good buy? These are questions we face daily. When there is too much going on, we may not even make a decision at all! Experts can sift through information and find the important, relevant facts. Then you can make a choice.

4. Managing your money can be lonely

Managing money means taking decisions – sometimes tough ones, sticking to budgets – sometimes tough ones, and balancing needs and wants with what is available.

“Dealing with your financial affairs on your own can be stressful and lonely,” says Warren.

So, it makes sense to have support from someone who can keep you on track with your money plans and give you guidance when you need it. And even say when you need to relax and take a breather.

This is what a financial advisor can do. Think of it like a sports coach who spends time encouraging and motivating.

Managing money takes time

There is no getting around this one. Setting up a budget, making long-term plans, making and following savings plans, comparing different investments, managing debt, managing taxes, making sure you have the right insurance and reading all the fine print can be incredibly time consuming. And you’ll have to learn the language of money, financial terms and what they mean and the laws and regulations that apply.

Unfortunately, we don’t all have the time we need to become really good at managing our own finances because it’s more or less a full-time job. So, getting a little help from someone who makes it their full-time job makes sense.

Find a money expert

So, if you are not DIYing your finances, how do you find a trusted expert? Your bank or financial institution can put you in touch with a financial advisor, or you can find a certified financial planner registered with the Financial Planning Institute.

Anyone giving financial advice must be registered with the Financial Sector Conduct Authority (FSCA) (the regulator that looks after financial services in South Africa). To check your financial advisor or planner is registered as an authorised financial services provider ask for their registration number and check on the FSCA website.

You’re still in control

When you use the services of a financial advisor or reputable financial institution, you’re getting guidance and an expert, objective view. You’re still in control and you still need to be responsible – you’ve just got something extra on your side to help you reach financial independence.

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