DO YOU NEED A FINANCIAL PLANNER?

Neal A. Deutsch, CFP^®

Published in Rivertown Journal, September 2007

No matter how much money you make, it just makes sense to keep track of your cash flow, meaning that which goes in and out. Even if you do a good job of that, there are important times in your life when consulting with a professional financial adviser makes sense.

Almost every major life event - finding or losing a job, getting married or divorced, having a baby, buying a home — is likely to have a major impact on your finances. A new job may mean you are making more money — no problem there as long as you have the discipline to save and know the best way to invest it. Getting married may mean you have a second income to count on, but now you have someone counting on yours as well. Buying a house means you have to come up with a hefty sum of cash for a down payment, get used to monthly mortgage payments and meet the unexpected expense of house repairs.

Let's look at what happens if a baby comes into your financial picture. First, medical bills need to be paid, so having good medical insurance is important. Few insurance plans cover everything, so you'll need to have a cash reserve to cover deductibles and extras, not to mention the furniture, clothing and sundries you'll need when the newborn comes home.

With a new addition to the family, you'll want to make sure that the entire family (baby, too) is protected if something should happened to you -- that means reviewing life and disability insurance to be sure it's adequate for your new responsibilities.

There's the future to start thinking about, too. Will your child go to college? If so, the College Board estimates that secondary education costs are rising 7% to 8% annually, a rate much higher than the rate of inflation. To afford the average $12,000 total costs for a state university, you’ll need to start saving immediately. Taking into account the above rising cost of college, not to mention inflation, proper calculating is prudent to determine an amount necessary on a monthly basis to prepare for this potentially huge expenditure.

Let’s talk retirement- don’t tell me you haven’t been thinking about it! Well, what will it take for you to retire in the same standard of living that your have grown accustomed to during your working years? Just putting away an arbitrary sum may not get you there…but how will you know if you don’t crunch the numbers?

A Certified Financial Planner™ (CFP) will work with you in all areas of your financial life, assessing risk, insurance, investments, legal documents i.e.: wills and trusts, do college and retirement calculations with you, look at your tax structure, as well as a host of issues relevant to your financial well being. A lot of professionals specialize in areas such as taxes or stocks, but a CFP helps you to understand the "big picture," help you sort through your current financial situation and help you set short and long-term goals and objectives. It is only after all of the prerequisite work has been done that your CFP can now present a "blueprint" designed to show you how you can meet your goals while staying within your means.

You wouldn’t pull your own tooth- you go to a dentist… it’s what they are trained to do. Unless you are well trained in finance, find and utilize a qualified financial professional. You owe it to yourself, and your family. To find a CFP in your area, speak with those you trust, or go to www.fpanet.org, and click on “find a financial planner.”

Neal A. Deutsch is a Certified Financial Planner^™, Registered Securities Principal and President of Chestnut Investment Group in Suffern, NY, helping people with financial planning since 1984. Please feel free to call Neal at 845.369.0016 or email him with your questions at neald@chestnutinvestment.com Feel free to visit his website at www.chestnutinvestment.com