The Blog Of TL Wall Accounting

5 Reasons Why You Might Need Financial Counseling

There are different types of financial counseling one might needy. The truth is most people need financial counseling in one way or another, sometimes multiple ways. Whether it’s to make money or save money or not get penalized because of how the money is used, it can help to speak to a professional.

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Does that make sense? If not, don’t get discouraged. We’re offering 5 reasons why you might need financial counseling, and what type of counseling you might need.

1. You need to be put on a budget.

One of our favorite subjects is budgeting one’s money. Do you make a good income, yet never seem to have enough to last you until the next time you get paid? Are you making less income and struggling to survive?

You mikght need someone to help you set up a budget. Only by setting up a budget can you definitely know how much money you actually have to spend, pay your bills, where you’ve been spending, whether you have enough left over to save or buy things you need or want that are outside of the budget and, believe it or not, find some peace of mind.

It could be an accountant who you go to for help, or maybe an independent person who works with individuals to help them set up a budget. For a little more per month you can employ people to pay all your bills for you if that’s something you keep forgetting to do, although it would probably be smarter to set it up with your bank to auto-pay your bills… if you’ve done your budget and actually have enough money each month to take care of them.

2. You have your own business.

When you’re a business owner with employees or a sole practitioner, you want to spend your time marketing and working your business. You probably don’t want to spend time keeping track of receipts, trying to figure out quarterly taxes and the like.

The best part about having someone else tracking these things is that it frees up your time so you can concentrate on your business, no matter what it is. You can pay someone to manage your books and expenses. You can pay someone to process your payroll.

You might also need a business consultant to help you figure out what else you can push off on others. For instance, you might want to find out if you can afford someone to do some housekeeping, cut your grass, shovel your snow, answer your phones or even pick up your dry cleaning. You might even need someone to help write your content if you have a blog. 🙂

3. You’re being hassled by bill collectors.

In this case, you’re not sure if you have enough money or not, but the pressure’s growing (budgeting again). Your first step should be Consumer Credit Counseling, which is in every major city. They’ll help you look at all of your bills to see if you’re making enough to pay your bills and still live comfortably. The best thing about them is their evaluation is free.

Any good financial counselor will do the same for you, even though it’s something you can do for yourself. The difference is that they’re not going to be emotionally involved and most of the time they’re going to know what to say to someone to help get you the best deal possible. After all, no one wants to deal with collection agencies long term.

4. You want to put extra money away or start investing.

You may not need someone to help you put your money into a savings account but these days where savings accounts might net you .5% a year, that’s little comfort and won’t help you increase your money. If you’re talking about investing, either in something small like a CD or an aggressive money market account, you’re definitely going to need some kind of financial counselor.

We’ve known people over the years who felt they had enough knowledge to invest on their own. In today’s world it’s pretty easy to set up your own account at one of many online investment companies, although you need to be ready for a host of fees that will eat into your profits. Some people do very well… but it’s not often sustainable. It’s best to have a money manager who spends all their time reviewing the market and making the best decisions on your behalf. Many banks offer this service, which means you’re keeping your money in one place.

If you go with a personal money manager, you need to make sure you can trust the person you hire to manage your money for you, as well as make sure they keep in touch with you. There have been way too many stories about people like Bernard Madoff who cheated people out of money, along with many athletes and musicians who had the wrong people managing their money, not to do your homework in finding someone reputable. The best piece of advice is to interview more than one investor and make them prove how good they are by showing you their own portfolio… at least a good piece of it.

5. You want someone else to handle all of your money and just give you what you can spend, like an allowance.

It’s too bad you can’t always have your parents around to take care of these things, isn’t it? Accountants are great for this type of thing, but if your needs are relatively small and you can find one you can trust, find a bookkeeper instead.

You need to be smart about it if you go this route. Letting someone else write out all your checks can be dicey without a lot of trust, but you need to be willing to sign them all. This gives you the opportunity to see what you’re paying and keep a handle on your money.

Botj bookkeepers and accountants should be able to produce a monthly report of every bill they wrote up and had you sign, produce your bank statement matching up with each check, along with total amounts so you can keep track of everything and know whether you’re being cheated or not. Truthfully, if you’ve gotten to this level you might not even look at those reports, but at least you’ll have all your paperwork if you ever decide you need to hire someone else to audit your books.

There’s our five ideas; do you have any you’d like to share?

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