Making financial decisions regarding your personal life can be overwhelming, frustrating and exhausting but you cannot avoid them. These are important decisions that you have to make and will affect your life in the short and long term. Very little effort is needed to go to a bank and get advice but often there are times where you’re not sure how the advice you were given would benefit you or what you’re even doing – other than listening to a random stranger tell you what to do with your money. The question is, how do you make yourself comfortable with taking that advice and making your own decision?
There are 5 things that I believe are very important to remember when you are receiving financial advice to feel more comfortable with these important decisions. I’m sure you already do most of these and have your own process but they are great to keep in mind and give yourself a good foundation to learn how you can help yourself.
1. Always ask questions. Don't be shy! There is no point in getting advice if you have no idea what it means, how it helps you and what it is. Asking the right questions is important and is not embarrassing if you get lost in their conversation. Everyone has a different level of understanding and it’s better to have someone judge you on the questions you ask rather than not asking at all - it’s important to ask. If there’s anything that you do not understand, about the advice that you were given, then there is no way you would feel comfortable taking that advice. It would be even worse if the results from taking the advice turned out different than what you had thought would happen - like an investment losing money! You would not only be mad that you took their advice but you’re going to be even more frustrated at the fact that you had no idea what it even was. Do not put that kind of stress on yourself. Ask the questions and understand exactly what you’re getting into!
2. You need to understand what you want. There is no way that someone is going to be able to help you when you don’t even know what you want or what your goal is either. This falls into the whole ‘help me, help you’ situation. The person in front of you can only do so much – they aren’t superman, even though they will claim to be your financial god. It’s always a must that you understand what you’re looking for so that you get the right advice. This means making a budget and knowing your numbers; your numbers will never be the same as the next person. Get tailored advice!
3. Find someone you trust. One thing I know is that it is hard to find people who think the same way as you do and are trustworthy enough to help make financial decisions. Trust can be gained over time as it helps talking to the same person as they already understand your goals and your life stage. However, finding someone who thinks like you do can be a bit of a burden. If you cannot find an adviser who gets you, at least find one that will take the time to learn about you. An adviser will show their interest in you by asking questions; if that person is not asking you questions then I’d say to the left, to the left. It is just as important for them to ask you for clarification as it is for you to ask them.
4. Take your time. Many people rush into making financial decisions. Granted, it may be a timely decision that is needed but taking an extra day to sit and think about what you would like to do generally does not change the situation significantly. There is nothing worse than rushing into something and regretting that decision. The best thing to do is to go over your options and go with the decision that you are most comfortable with.
5. At the end of the day, it needs to be your decision. No one can make your decision for you. You will have to take someone’s advice but that does not mean that they forced you to do it. You have to live with your decisions and that’s why you will want to make sure that you feel comfortable with your decision.
If you do all of these, I’m sure it will help you feel much better about your situation and when making your decisions. No one will ever know all of the facts except for you and only you will truly understand how the decision will affect your life. It’s very important to make sure you understand your own situation, understand the advice from a trustworthy source and take your time to make your informed and educated decision.