Think Like a Financial Advisor

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Ways to Think Like a Financial Advisor | Saving & Investing | Smart Money | Wise Spending

Wouldn’t it be nice if we all had a financial advisor in our pocket? Someone who could guide us, direct us, and help us make knowledgeable and sound financial decisions?

Money is hard to deal with sometimes. Just talking about money can be one of the most difficult conversations to have with your spouse, parents or children. Many of us are very private about our finances, so we don’t like to share our fears or even our joys with others.

If we have money now (especially if we haven’t had any in the past), we might feel a sense of embarrassment or a desire to downplay our financial state. We might even feel uncomfortable seeking professional financial advice. Handling a long-term shaky financial status and then pulling ourselves out of it can actually make it harder to share information with a professional—or with anyone, for that matter. There’s almost this feeling of, “If I talk about it, it might disappear.”

On the other hand, if we have debt or if we’re in financial trouble, we may be drowning and too ashamed to call out for a life preserver. We might feel too bad to ask for financial help or advice. We might be afraid to take a realistic look at our finances, even for ourselves.

One of the first steps to getting a handle on your finances is to open up about them! Take a look at those unopened bills or be realistic about what’s in your bank account. Seek the advice of a professional if you need guidance—and, although it can be tough, know that it’s ok to ask for help!

And while we might not have our own personal financial advisor at our beck and call, we can learn a few tips and tricks to learn to think like one and start making wiser choices when it comes to our personal and family finances.

Ways to Think Like a Financial Advisor | Saving & Investing | Smart Money | Wise Spending

1. Follow a Budget

To truly think like a financial adviser, establishing a clearly defined well-planned budget is key. If you don’t know where to start or if you need a template, try using a budget-planning tool.

When creating your budget, the most important thing is to keep it realistic and set yourself up for success. If you aren’t ready to embark on a month of zero spending or take a break from all luxuries, be sure to include an allowance in your budget. Also include money for your children’s unexpected expenses, like school activities, soccer cleats and ballet shoes, and friends’ birthday parties. These items will inevitably come up, and, as the saying goes: If you fail to plan, you plan to fail.


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Keep your budget realistic, but also make it as tight as you can stand. If you’re financially drowning, it’s not the time to figure in a luxury vacation or a major purchase. Your goal is to set a budget you can both afford and follow. Try it for a month or two and make adjustments as you go. If you aren’t sticking to a budget at all, any step is a step in the right direction.

Don’t forget an important part of your budget is to include charity. People who give to charity report greater happiness and a sense of satisfaction, so even if you can’t give a large financial gift, there are many options for giving back in small ways. Look at your budget to determine what you can work in.

2. Keep Your Finances Organized

Setting up your budget is one step in the right direction to financial organization. You can also try other ways to organize your finances (like only using cash or sticking to gift cards) to help you keep a handle on your spending. Watch for opportunities to use bonuses, benefits and rewards to stretch your money even further.

When you do spend, keep track of important receipts, warranties and rebates—and take care of them right away. If you have the opportunity to earn cash-back or reward points for spending, or if you take advantage of special offers like Groupon, always keep track of what you buy and pay close attention to expiration dates and restrictions. Consumers often spend and lose out on savings because they don’t bother to do the follow up.

When looking at your bills and debt, plan to pay them as quickly as possible to avoid late fees and collections. Examine interest rates and consider negotiating better deals on your utilities, phone, and other bills. Sometimes all it takes is a simple phone call.

Ways to Think Like a Financial Advisor | Saving & Investing | Smart Money | Wise Spending

3. Don’t Take on More Debt

So many of us live beyond our means. Even fifty years ago, a mortgage was the only debt buyers would willingly take on (and sometimes not even that). Nowadays, people spend on credit, take a loan out to get a car, and much of what is owned is bought on promise. We are living in a world of debt.

There’s nothing worse than feeling like you can’t pay off what you’ve taken on. Creditors can become relentless and debt can grow exponentially, quickly becoming insurmountable. If you’re serious about getting a handle on your finances, commit to stop taking on more debt. Live within your means.

Is it easy? No. It can be challenging to turn down credit and to say no to bargains and things we want to spend money on. It can be hard to tell our children no, to talk to our spouse about our spending, and to stop buying things we really want, but it’s often the only way to move forward in a realistic way and bring ourselves financial peace of mind.

4. Use the Debt Snowball to Pay It Off

Finance guru Dave Ramsey proposes using a “debt snowball” to pay off debts as quickly and successfully as possible. This method works surprisingly well, and is fast and satisfying. When paying off your debts, sort them by size, and pay off your smallest debt first. Put as much “extra money” toward your debt as you can and focus the entire extra amount on the smallest bill. When that one’s paid off, move on to the next. As you pay off each bill, the amount you can put toward payment increases, because you have fewer and fewer payments to make.

Other advisors have suggested paying off bills by the size of the interest charged. While this method also works, the debt snowball can be even more satisfying because you can see immediate results and have the satisfaction of seeing your number of bills quickly go down.

If you’re really struggling to make even your minimum payments, you may want to consult with a credit counselor or someone from your local credit union. They may be able to help you identify realistic ways to pay off your debt, work with creditors to adjust your minimum payments, or consolidate your bills into an easier-to-handle format.

Ways to Think Like a Financial Advisor | Saving & Investing | Smart Money | Wise Spending

5. Keep Enough Savings

Financial advisors tout the benefits of having a savings account that covers your emergency needs. In most cases, a $1,000 emergency savings cushion will help you feel more secure if something unexpected comes up. No longer will you have to scrape together a payment between a few credit cards, take out a temporary loan with high interest, or make hard choices when you can’t afford an emergency.

Having emergency savings is a key part of working toward financial peace. There are many ways to start to seed your emergency savings—you can sell something, pick up a few odd jobs around the neighborhood, take up some freelance work, or adjust your budget to allow you to put a little away each month until you reach your savings goal.

Once your debt is paid off, shoot for saving even more money to help you during tough times like a job loss or sudden financial hardship. Realistically, you should have 3 to 6 months of income put away for a rainy day. Having at least a $1,000 in your savings account will help get you started and keep your family protected.

6. Make Your Money Work for You

Many of us have financial opportunities we don’t take advantage of, either because we aren’t familiar with the product or we’re afraid of losing out (or simply because we forget the option is out there). We have to learn to think like a millionaire and plan ahead, even if we aren’t one. That means getting your money to work harder for you.

If your employer offers any pre-tax savings for retirement, take advantage as fully as possible. If you have the opportunity to participate in a Health Savings Account (HSA) or other vehicles that can help you cover regular bills without paying taxes, participate and save.

One of the easiest ways to make your money work for you is to invest a little each month. Schedule payments to life insurance, 401(k)s, and other investments to be automatically withdrawn. Ask your bank to transfer a small amount into savings on the day you get paid. This way the money is never at your fingertips, so you can resist the temptation to spend it.

When you have a few thousand dollars in savings, roll over the money into a CD, money market account or other savings vehicle where you will receive better returns on your investment. Having money sit in a “regular” savings account isn’t very productive and won’t yield the results you could be getting with a better investment. Ask your bank or a professional financial adviser to recommend a savings platform that offers low risk (if you’re nervous) and shorter terms, so your money is accessible, should the need arise.

Ways to Think Like a Financial Advisor | Saving & Investing | Smart Money | Wise Spending

7. Don’t Bite Off More than You Can Chew

When it comes to investing, some people want to do it all at once. It can get addicting to see all the ways your money can grow and the great rates of return. Only invest in products you’re familiar with and can handle. Some people love following the stock market and having money they can move quickly. Others prefer mutual funds and CDs, which require less involvement and hands-on activity.

Whatever you choose, pick something you understand. Read all of the fine print and don’t feel bad asking questions or requesting clarification. Financial advisors are there to do just that, and they want you to get the best return for your dollar and have a product you’re happy with. They know you aren’t an expert, so don’t feel silly asking questions you think might be obvious. Chances are they’ve heard it all.

8. Seek Advice & Plan for Life’s Changes

When you face something unexpected or experience a big change like a marriage, divorce, new baby, or inheritance, it’s time to seek the advice of a financial expert. Many of these situations are emotional and stressful (even if it’s a positive stress) and those feelings can cloud your judgment and make it hard to see a clear path.

Financial advisors are prepared to deal with these big changes—they do it every single day. They can help you watch for loopholes and hidden fees, and keep you from making poor choices driven by emotion or fear. They know how to best address life’s big issues from a financial perspective and will guide you through questions you may have.

If you make a major investment, are heading toward retirement, want to return to school or switch from public to private education, these are all times to seek advice. If a relative or parent is moving in with you, you’re company is downsizing, or if you see another issue on the horizon, a financial advisor can help you manage risk and plan for things to be as financially painless as possible.

No one knows what the future holds, but we all can make certain plans for a few expected things. Planning for retirement is vital—even if you love your job, and figure you’ll work until you’re 90; even if your employer doesn’t offer retirement benefits and you don’t know how you can conceivably plan on your own.

Talk to a financial adviser and have them help you figure out a plan that will work for you. Invest in insurance—health, life, and disability. If you or your spouse become injured or worse, you need to have a plan to protect yourself financially. Create a will and set up a trust or savings plan for the care of your children.

It can be hard to address the future and to sit down and do long-term planning, especially if it seems like something far off in the distance. Life is full of unknowns and surprises though, so it’s best to protect yourself by thinking about the future.

Ways to Think Like a Financial Advisor | Saving & Investing | Smart Money | Wise Spending

9. If You’re Unsure, Call a Professional

In a legal situation, you’d call a lawyer. If you were sick, you’d call a doctor. If your sink were plugged up and flooding, you’d call a plumber. When it comes to financial situations, we often try to go it alone. Yes, we all deal with money every day, but a professional financial advisor can be highly valuable, especially when facing the unknown or dealing with situations that are new and unfamiliar.

When you’re trying to figure out what to do in a financial situation, whether it’s about investing, taxes, or even getting out of debt, chances are there’s someone out there who has experience and the expertise to guide you through it.

Now, financial advisors don’t work for free (which is why we all wish we had a best friend who would advise us instead) but they can be truly worth the cost in terms of your return and assistance. The next time you’re facing a big financial question or need some help, find someone who can advise you and assist so you don’t have to go it alone!

Ways to Think Like a Financial Advisor | Saving & Investing | Smart Money | Wise Spending


  1. Mike Brzoska
    November 11 at 10:32AM

    Great advice. Thank you.

  2. November 11 at 10:59AM

    My parents always taught me that if you pay yourself first, even if it’s $5 a paycheck, within a year, you have $60 more than you did last year. It’s important to be wise with our money, and it’s never too early to each our children these same principles as well so they begin thinking like a financial expert.

  3. November 11 at 01:01PM

    This is really helpful advice, especially this time of year. Each month before I write out my monthly budget, I jot down our long-term financial goals and then make sure our monthly budget is moving us towards those goals. That has been one of the most motivating habits I’ve started. I also love how you suggest that we think like a millionaire. It really does change how we view our daily spending.

  4. November 11 at 01:04PM

    I’m so thankful to have so many experienced friends and family members who have been a huge help on our financial journey. But when it comes to investing, I won’t lie nobody could help. With our taxes, we ran into the same issue. There are actually a number of free resources at your disposal so why not take advantage of them! For example, I file my taxes using turbotax which is great, but what’s even more great is the fact that they have financial specialists for FREE who can assist you if you have any questions.

  5. November 11 at 05:07PM

    Great article. I especially like that you included investing in insurance. It can be tough to talk yourself into if you are just starting out, but is necessary to keep from derailing everything you have worked so hard for.

    I wrote an article about this a few months ago:

  6. November 13 at 12:48PM

    Paying yourself first and making your money work for you are such important tips. You will never have “enough” to save if you don’t make it a priority. Currently Discover bank offers some very appealing interest rates on savings accounts and CDs. The savings account earns interest at the rate most CDs do, and the short-term CDs offer rates that you often find only in long-life CDs offered elsewhere. Their customer service has also been wonderful to work with.

    Of course some people truly do only have the bare minimum to meet their needs, but often people are unaware of where their money is going and how much they could potentially pack into savings.

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