Find Your Financial Yoda

People generally go through some major life changes during the 18-25 year old stage. Moving out, going to college, getting a job, getting married, having a child, any random combo of those . . .  and every single one of those life changes requires a ginormous overhaul of your personal finances. 

Sometimes, you'll find that you're in way over your head. This can happen if you suddenly get a new job, decide to buy a house, or propose to that special someone! If you find yourself needing some professional financial advice, find Yoda.
 
 
Or find a "finance guru."  This article at ideas.thenest.com explains why you might need a finance guru -- and what type to seek out if you do.
 
1) Certified Personal Accountant (CPA)
CPAs can help you fill out your taxes. When you first start filing, your taxes might be cut-and-dry, but getting a new job or merging finances with a spouse can complicate matters. CPAs have an in-depth knowledge of tax law, so they can make sure you're not losing out on write-offs or refunds you're entitled to.
 
The downside to any financial guru is that they cost money. CPAs can cost around $150-$200 per hour, for an average of two to three hours of service. However, if you know a CPA personally, there's a good chance they'll help you out for a drastically lower price!
 
When picking a CPA, ask them these questions to determine if they're right for you:
 
  • “Will you be doing my tax return personally, or will you have a junior staffer do it?” (Do your best to have a CPA file your taxes personally.)
  • “When there are changes in tax law, how do you update your clients?” (Ensure that your CPA is staying up-to-date on the most recent changes in tax law.)
  • “What additional services do you provide?” (You might be able to get some financial planning out of the deal.)
2) Financial Planner
Financial planners are helpful if you have problems with budgeting and/or are looking to invest. Some charge by the hour, and others work for a percentage. To find one in your area, go to FPANet.org and put in your ZIP code, or try sites like GarrettPlanningNetwork.com or PaladinRegistry.com. 
 
Again, financial planners cost money. But if you really need a kickstart at managing your money, a financial planner might be the best option -- especially if you've recently gone through a drastic change in income or assets.
 
Questions you should ask your financial planner:
 
  • “Are you a certified financial planner (CFP)?” (Make sure they're legit and licensed.)
  • “Are you a registered investment advisor (RIA)?” (A financial planner should be registered with the Securities and Exchange Commission to give financial advice. Ask to see their ADV-II form.)
  • “Are you a fiduciary?” (Fiduciaries are required by law to act in their client's best interest.) (My friends Scott and Rach think the word "fiduciary" is funny.)
3) Broker
If you want to buy stock or invest in a mutual fund, you'll need a broker. There are two types - full-service brokers and discounted brokers. You'll pick one depending on the type of service you need. 
 
Brokers usually earn their money through commission and "loads", which are fees charged each time a broker performs a transaction for you.
 
If you're looking to invest, make sure you ask these questions to your broker:
 
  • “What’s your Central Registration Depository (CRD) number?” (Every broker or firm will have a unique number assigned to them by the Financial Industry Regulatory Authority (FINRA.org). Plug the CRD number into the site, and you can see if your broker has behaved in a shady way.)
  • “How do you get compensated?” (If they dodge the question, get suspicious. These people are dealing with your money, and you deserve to know the answers to these questions.)
  • “How often will you be monitoring my account?” (Once a month is good, but make sure your broker will be personally attending to your account.)

Special thanks to Josh Testasecca for providing the photo that inspired this blog post!

Stay awesome!

Janelle