I spend a great deal of time every day reading, writing, and thinking about personal finance. In reality, you probably do too, at least the thinking part (and probably the reading part too). Pretty much every decision we make has an impact on our bottom line. Going out or staying in. Pizza or steak. Generic or name brand. If you are reading this then you already know personal finance is important. But personal finance is more than just how you spend your paycheck. It’s also about protecting and growing what you have.

There are five categories that go into financial planning.

1. Insurance. Disablilty, life, homeowners/ renters, car, malpractice, did I get them all? Probably not. Are you properly insured? Do you have all the policies you need? Do you have the proper coverage on those policies? Are you paying too much? Are you sure? It can be confusing. We currently have life, homeowners, and car insurance. And even with those basic everyday policies I’m still not sure that we have what we need. If anything we are probably over insured (in those areas at least), but I guess I would rather err on the side of caution.

2. Investments. If you are like most people, the world of stocks is a murky place. Filled with weird lingo and funny graphs. You know you want to buy low and sell high, but how you do those things is a mystery. I’ve taken intense classes on the stock market and I still don’t feel comfortable talking about stocks. While I could probably blather on about a stock and sound like I know what I’m talking about, I wouldn’t really. This is largely because I have no real world experience with them and I don’t think that book learnin’ is the same as street smarts. Just because I can use the term correlation coefficient properly in a sentence doesn’t make me an expert.

3. Taxes. This is a topic everyone has some experience with, and yet, in my opinion, it’s even more confusing than the stock market. So many decisions we make affect our taxes. Do I have to pay taxes on that? At what rate? Is this a deduction? Do I need to keep this paper? What if I’m audited? Not only is it confusing, it’s important to get it right. Overpay and your wasting money. Underpay and you could go to jail.

4. Retirement Planning. You’re not going to work forever right? If you are not currently saving for retirement, get on it! Seriously. Even if you’re not an expert in retirement planning you need to get started. I would rather you pick the wrong investment than pick nothing at all. I know setting up your 401(k) seems like a daunting task but it must be done. And I promise it’s not as hard as it seems. If you are saving for retirement then good for you. Are you making the most of your money? Invested in the right fund? Are your funds properly diversified?

5. Estate Planning. What is going to happen when you die? Do you have a will? Do you need a trust? Who is going to handle your estate? What will happen to your kids or spouse? It gets even more confusing when if you have a blended family, like I do. You don’t want your loved ones to have to deal with who gets what after you’re gone. Be nice to the them and make sure this stuff is handled.

Phew… feel helpless? Just writing that made me aware of many many holes in our financial plan. Some holes I know we need help closing. Like estate planning for instance. Having a blended family brings up a lot of unique issues. I need professional help here. You can certainly get a different professional for each area. And if you only need help in one area then that might be the way to go. But if you are like most of us you need help in most, if not all, of the above categories then you might want to consider a financial planner. A financial planner can take a look at your finances as a whole. They will coordinate the other professionals to make sure that your plan is right for you. They can take your needs and wants into account and create a comprehensive financial plan.

If you are interested in getting a financial planner I highly recommend, no I insist, that you get a fee only financial planner. Yes, you have to pay them. But then you can be sure that they are working for you. They will be making recommendations based on your needs, not their wallet. You can find a fee only financial planner in your area here.

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