How do you know if you’re ready for a financial planner?

After all, it’s sort of a strange proposition: You’re spending money on someone who will tell you how to spend your money. But that’s exactly why millions of people see financial planners in the first place.

“Typically, people who come to me are already asking really good financial questions, but aren’t really sure who to ask them to,” says Sophia Bera, who runs Minnesota-based Gen Y Planning. “They’re usually reading personal finance blogs and can say to themselves, ‘Ok, I’m contributing to my 401(k), and we have some savings, and we paid off some debt, but now what?’”

1. Assess your situation.

You may have the first threads of a financial plan but need help weaving them together in a way that keeps you on track toward your financial goals.

“You should start when you have that nagging feeling that you could be doing better with your money,” says Stephanie Genkin, a financial planner with TA Planners in New York City. “Or you are lost and confused about what to do to get started.”

Perhaps you’re having trouble balancing your different needs and goals, such as saving for retirement while saving for a home and also paying down student loan debt. Or, you have some extra cash and aren’t sure what to do with it, knowing that it’s doing nothing sitting in a savings account.

“Most people aren’t good at multi-tasking, and it can be even more confusing when you don’t really understand risk and reward or asset allocation,” Genkin says.

2. Dig into your finances.

While anyone can benefit from sound financial advice, not everyone is financially ready to see a planner. You should be able to afford the financial planner you choose on your income and have some money saved, Bera says.

Planners accept a wide range of clients. You don’t need a six-figure income and as much in assets, but if you’re living paycheck to paycheck, a financial planner may not be able to help you until you have the cash flow.

3. Know what kind of financial planner you want to see.

Not all financial planners are created equal. Fee-only planners charge for advice and do not earn a commission for selling products such as life insurance or investment funds. Fee-based planners, on the other hand, charge a fee for advice and also earn commission on some products. Commission-based planners and brokers earn money from selling products.

As you search for a financial planner, look for an advisor that is held to a fiduciary standard, which is a rule that requires planners to put their clients’ interests above their own.

4. Find out the costs and what they mean.

Traditionally, planners charge a percentage of the total assets they manage. So if you have $50,000 you want a planner to manage, you may be charged 1 percent ($500) annually.

However, many planners are moving away from that model and will instead charge a flat fee for a plan. Typically these fees run from $1,000 to $5,000. They may also charge a monthly fee afterward to manage your portfolio.

Other planners may charge hourly. The fees range from $75 an hour to upwards of $300 an hour. These advice-only sessions allow you to ask financial questions and receive advice without delving deeply into a comprehensive plan.

If these costs leave you wringing your hands, remember that you can ask the planner how his or her services will save you money. Financial planners and advisors offer investment vehicles that could earn you enough money throughout the year to offset the costs.

5. Calm your nerves and dive in.

Even armed with this basic knowledge, you may still find yourself nervous about reaching out to potential planners.

“The sooner the better for creating a financial plan,” says Nick Barringer, a financial planner with Alpha Financial Advisors in Charlotte, N.C. “Everyone has to start somewhere, and pushing it off to another year may end up meaning having to work longer or falling short of goals.”

You can get started online by doing a search for financial planners in your area. Try the National Association of Personal Financial Advisors (NAPFA) to find fee-only planners near you or the XY Planning Network for planners that specialize in younger clients who want to get started before they’re staring at retirement.

Michelle Stoffel Huffman is a researcher and staff writer for Think Glink Media. Prior to joining TGM, Michelle worked for the Chicago Tribune as a daily news reporter and community manager, covering local government, business, tax issues, and crime. She now specializes in real estate industry news, consumer financial reporting, and home design and decor. She is a graduate of DePaul University in Chicago.

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