When you have any type of financial trouble, it seems that everyone in your life has some type of financial advice. Everyone from your grandma to your mechanic has an opinion on how you can save money and approach financial stability.
These self-labeled financial advisors are happy to tell you which stocks to pick or lecture you on the importance of retirement savings. However, when it comes to real questions and real financial advice, they often fall short.
When you’re struggling financially, it can be a difficult to know whom to turn to. We love our friends and family, but their financial knowledge can have limits and often be weirdly skewed, like your grandma who still slips you a dollar and tells you to go out on her. Remember, friends and family have good intentions but sometimes you’re going to need someone with just a little bit more market knowledge.
1. Close Friends
When you have a close friend, you often feel comfortable enough to share anything and everything, even personal details about finances and money. Your friends might even have an idea of your cash flow and expenses based on their close observance of your lifestyle.
Even being the best observers, however, doesn’t qualify them to offer you financial advice. If anything, their close connection with you and their desire to see you comfortable could prohibit them from giving you an honest assessment of your situation.
If you’re working a regular 9-5, you probably are spending a lot of time with your co-workers, maybe even more than you do with your family. This of course can lead to a lot of trust, but trust alone does not make your co-worker qualified to give you financial advice.
True, co-workers often have a better idea of your salary and the general health of your employment than your friends, but this doesn’t equate to full knowledge of your life goals and finances. They may have an idea of your financial status, but they don’t know enough and aren’t qualified enough to be offering financial advice.
3. Family Members
Family members probably know the most about you. Furthermore, they’re probably the most likely to be privy to any financial mishaps you’ve had in the past. However, this familiarity doesn’t mean they know everything about the way you handle money and how you want your monetary future to look.
In fact, family members often have expectations about what your financial future should look like, expectations that don’t consider what you actually want. In a sense, family members are almost too close to you, as they can’t be objective enough to show you all your options.
4. People with More Money than You
Once people are “comfortable,” they usually feel as if they have discovered the path to financial stability. Unfortunately, the truth is that they do not have all the answers. Just because one method worked to help them achieve their financial goals, that doesn’t mean the same method will work for you.
Furthermore, being financially stable does not automatically grant someone the knowledge of how to lead others to financial stability as well.
It’s also important to remember that looks can be deceiving. Just because someone looks wealthy, that might not be the case. That person could be holding large amounts of debt. While it’s easy to do, never assume someone with more money also has more financial knowledge.
So, whom can you trust?
When in a financial crisis, the easiest option often seems to be to turn to those closest to us, such as friends and family. However, trust does not compare to a rich knowledge of financial management and planning. The best option is to find a financial advisor who understands your position and can advise you in the smartest and most objective way possible.
Of course, finding the right financial advisor can also seem like a daunting task. However, as with most major decisions, research is always a good idea. There are tons of resources out there which you can utilize to study up on different advisors.
Most important, still, is to search for the planner you want until you find someone with experience in your field and who you feel comfortable taking financial advice from. While financial planners have important advice to give, in the end, you are your biggest ally, and you need to make sure you can speak up enough that your financial goals are met.