DIY is all the rage, but there are situations when you should call in a professional — like when you’re rewiring a bathroom or reworking your investment portfolio.
If you’re dealing with the former, call an electrician. Please. And when it comes to managing your money, you might want a financial planner on the job.
What does a financial planner do?
A financial planner looks at the big picture when it comes to your money and develops a comprehensive plan to address your needs and long-term goals. Ideally, he or she can advise you on investments, insurance, estate planning and taxes, among other things.
Your planner might be paid hourly, on a project basis, via a monthly retainer or with a percentage of any investments he or she manages on your behalf.
Do you need a financial planner?
If your finances are relatively simple and your money questions can be answered with a Google search, save your money and skip the financial advisor. You don’t need to pay someone to tell you to keep contributing to your employer’s 401(k).
“Do you need a surgeon to put on a Band-Aid? Do you need a mechanic to put air in your tires?” asks Pedro Silva, a financial advisor in Massachusetts. “The complexity of the situation should dictate how much help [you] need.”
Below are four potentially complex money situations that might warrant a financial planner.
1. You’re getting married
Sometimes combining finances requires a neutral party. A financial planner can be that party, says Scott Snider, a financial planner who works in Ohio and Florida.
“When couples are first married, they’re still getting to know how they both operate in terms of money,” Snider says. “A financial planner can help them work through defining their goals, how they look at their money, and then ranking and prioritizing goals.”
Once you have a plan, you can implement it yourself and check in with a planner as you approach other milestones that could affect your finances, such as having children.
A planner can also determine whether you and your partner are better off filing taxes together or separately. Snider recalls one instance when filing separately cost a couple $4,200.
2. You’re getting divorced
Happily ever after doesn’t always end that way, and the consequences can wreak havoc on your finances. For starters, you’re likely going from two incomes to one. You’re also divvying up financial assets — property, investments and cash — and responsibilities, such as child support and alimony.
“Anyone going through a divorce should find a good lawyer and a good planner and make sure they’re on the same page,” Snider says. “Are you getting hosed on something, like your spouse taking all the cash holdings but giving you the pretax IRA? They’re not the same things.”
Snider says a good lawyer will fight for a fair division of assets and a financial planner will help you hit the reset button and figure out how to manage your money going forward.
3. You’re starting a family
Babies are expensive. That’s not news to parents, but exactly how expensive might be surprising.
With health care, clothing, food, toys, diapers and day care, parents could spend more than $20,000 in just their child’s first year, according to a recent NerdWallet analysis. But most seriously underestimate the costs of raising a baby.
A financial planner can help you plan for your child’s first year and beyond. He or she can advise you on balancing college savings with retirement savings and other priorities, ensure you have the right level of disability and life insurance coverage, and help you stretch your dollars.
4. Your salary is increasing, big time
You didn’t just get a new job, you got your dream job. But this gig could raise new financial questions, such as how to handle stock options or lessen your tax burden. A financial planner can help you answer those questions, as well as others you didn’t consider.
“I help develop and implement tax-savings and execution strategies to ensure they make smart financial decisions on how they handle their income, benefits and investments,” says Paul Murray, a financial planner in Pennsylvania.
Looking for a financial planner?
You typically want a certified, fee-only advisor who is also a fiduciary. These advisors pledge to act in their clients’ best interests at all times and don’t receive commissions for selling products. By contrast, planners who work on commission get paid to sell financial products, even if those products aren’t right for you.
The National Association of Personal Financial Advisors, the Garrett Planning Network and the XY Planning Network are great places to find a planner.
Kelsey Sheehy is a staff writer at NerdWallet, a personal finance website. Email: firstname.lastname@example.org. Twitter: @KelseyLSheehy.
The article 4 Times When You Might Need a Financial Planner originally appeared on NerdWallet.