How to Manage Finances Without an Advisor

Do you find it hard to manage finances by yourself but don’t want to spend some extra bucks to get help from financial advisors? Well, no matter what bankers or finance professionals might tell you, the truth is that you can truly manage your money yourself, all you have to do is implement your financial planning in the right way.

To help you out, here are some points to manage finances like a pro:

 Set your goals

Write down your goals about money and life. It is essential for you to set some realistic and achievable goals because finances can affect various aspects of life. Remember, your early retirement goals are primarily dependent on how you manage finances now.

List both long-term goals like getting your own home, repaying student loans or other debts, and retiring early, and also short-term goals such as sticking to a budget, avoiding credit card usage and changing spending habits. Prioritize your goals accordingly and create a plan.

Create a plan

Financial planning doesn’t seem like rocket science once your goals are set. Creating a financial plan will help you reach your goals. But first, you need to map out a spending plan.This will help you get in control of your budget.The part B of the plan is to repay loans. Once, you have accomplished both the things; you are now ready to manage your money and reach your goals.

Stick to your budget

Your budget is the biggest aspect of successful financial planning. Sticking to a budget is vital because we are in the habit of over spending and being knee deep in credit card debts. A budget will help you make better decisions.

Here are a few things you could do that can help you stick to a budget without any financial advisors:

  • Pretend your budget is 50% of the actual amount
  • Read blogs about minimalist lifestyle and how to manage finances
  • Live modestly and spend frugally
  • Stash money away for a rainy day

Living on a smaller budget doesn’t mean living off water and feeding on the sunshine. It just means you pay yourself first for an uncertain future.

Try to understand investment

Most people end up hiring financial advisors because they lack investment knowledge. But investment doesn’t have to get that complicated. Just ensuring that you have a comprehensive information of prospective investment opportunities like bonds, stocks, mutual funds, and exchange-traded funds (ETFs) is enough. All you have to do is pay special attention to your fund’s expense ratio.

Pay attention to your fund’s expense ratio

The fund’s expense ratio represents your expense of owning the fund rather than redeeming or purchasing the fund. For example: An average expense ratio of 1 percent means that one percent of your assets disappear every year for covering administration, marketing, and the cost of running your mutual funds, regardless of its performance.

There’s nothing to be overwhelmed about this; you can research on fund’s expense ratio by researching on financial news sites, fund screeners, and news journals along with a thorough reading of the fund’s prospectus.

Sign up for a robo-advisor

A robo-advisor is an automated, online, portfolio management service. It offers the services of a human, financial advisor at a fraction of what they charge. Now, it’s becoming mainstream to sign up for these beautifully designed tool that make investment management, IRA management, rebalancing, reinvesting dividends, and even harvesting tax losses easy. Numerous advisors are available, and you could choose one based on your investment requirements, the features, and the costs.

In conclusion

By definition, planning your finances is creating a strategy to achieve your financial goals, and once you follow the keys, you will find how easy it is to manage finances by yourself without losing your mind, and you won’t ever feel the need to hire an advisor.