Many people start the new year with ambitious goals: pay off debt, invest more and save for an emergency fund.
But without the right help and resources, achieving those goals can seem nearly impossible. Fortunately, you don’t have to do it alone. A financial advisor can help you.
Entering 2024 with a strategic financial plan can set you up for success. An experienced financial advisor can help you navigate the complicated web of investing, saving and budgeting so you can achieve your goals.
Do you need expert guidance when it comes to managing your investments or planning your retirement?
Bankrate’s AdvisorMatch can connect you with a CFP® professional to help you achieve your financial goals.
5 Ways a Financial Advisor Can Help You Achieve Your Goals in 2024
Do you have big plans for 2024? Breaking these ideas down into actionable steps is critical, but doing it alone can be challenging.
As you begin your financial journey in the new year, consider working with a financial advisor to turn your dreams into reality.
1. Set clear financial goals
One of the biggest benefits of working with a financial advisor is the ability to set clear and achievable financial goals tailored to your unique situation.
Maybe you are planning to finally buy your dream home in 2024. A financial advisor can break this goal down into actionable steps, taking into account factors such as your current income and existing debt. They can explain the impact of interest rates on your mortgage payment and how to build an emergency fund for home repairs.
Advisors can often also put you in touch with other local professionals, such as a mortgage broker or even a real estate agent.
2. Creating an investment strategy
Navigating the world of investments can be difficult. A few innocent mistakes can have long-lasting consequences for your portfolio’s performance and potentially jeopardize your retirement savings.
A financial advisor can help you cut through the noise and develop an investment strategy that fits your goals and risk tolerance.
Consider a scenario where you want to retire comfortably in twenty years. You’ve saved some money, but you know you need to increase your contributions. You’re not sure how much you need to save each year to reach your goal, or which investments you should choose to maximize your potential returns.
An advisor may recommend a mix of retirement accounts, such as a 401(k) and a Roth IRA, tailored to maximize tax benefits and long-term growth. They can also diversify your investment portfolio to limit risk, balancing stocks, bonds and other assets to align with your retirement timeline.
3. Creating an emergency fund and budget
Life is unpredictable, so having a robust emergency fund is essential for financial security. Yet many people have difficulty building a financial safety net. More than half of Americans (60 percent) say they are behind where they should be when it comes to emergency savings, according to a recent Bankrate survey.
A financial advisor can analyze your situation and determine the right size of your emergency fund based on your lifestyle and expenses. They can help you create a budget so you can clearly identify where you can cut costs so you can move that money into your rainy day fund.
For example, if you are a freelancer or self-employed with an irregular income, your advisor may suggest maintaining a larger emergency fund to cover potential income gaps. They can recommend the best high-yield savings accounts for easy access so you can be financially prepared for unexpected expenses.
4. Eliminating debt
Debt is a major obstacle for many Americans. Whether it’s student loans, credit card debt, or a mortgage, a financial advisor can create a customized debt repayment plan to help you become debt-free by 2024.
Consider a scenario where you have multiple high-interest credit card debts. Your advisor may recommend a debt consolidation strategy, which combines your debts into a single loan with a lower interest rate. This can simplify your finances while lowering the overall interest you pay over time.
An advisor also ensures that you don’t fall prey to shady “debt relief companies” that are notorious for making promises they can’t keep. These companies often offer “a quick fix” to your debt problems, but may engage in illegal behavior such as charging fees before reaching a settlement, according to the Federal Trade Commission.
5. Adjust your financial plan
Your financial landscape is dynamic and your personal circumstances will change over time. When you are going through a new phase of life, getting reliable and unbiased advice is invaluable.
A financial advisor provides ongoing support by conducting regular check-ins to assess your progress, adjust strategies, and address any changes in your goals or financial situation.
If you expect a major change in 2024, such as getting married or starting a business, your financial advisor can guide you through these transitions. They can adjust your investment strategy, update your insurance coverage, or reallocate funds to ensure your financial plan stays on track.
How do you find a financial advisor in 2024?
Technically, anyone can call themselves a financial advisor. You’ll need to do some research to make sure potential candidates are a good fit for the position.
But how do you select the right financial advisor?
First make sure that the advisor is a confidential counselor. A fee-only fiduciary is a professional who is ethically obligated to work in your best interests – and not in the interests of insurance companies or financial institutions. They provide unbiased, personal advice you can trust.
Online databases from organizations like the CFP Board and XY Planning Network can help you find qualified financial advisors in your area and narrow your search.
Also check an advisor’s background and credentials. A good place to start is the Financial Industry Regulatory Authority’s (FINRA) BrokerCheck. Here you can research professionals who sell securities, provide advice, or both. It provides an overview of a consultant’s work history and the history of their business.
Finally, interview potential advisors to gauge their investment approach and experience. Make sure your communication styles are aligned. Advisors can be compensated in different ways, so make sure you understand how a professional is paid and that the price fits your budget.
In short
In the complex world of personal finance, an experienced financial advisor can be your ally in achieving your goals in 2024 and beyond. From setting clear goals to crafting personalized investment strategies, their expertise can provide a roadmap to your financial success.
