Sandi Martin on Hiring a Financial Planner for

Personal Finance Interview with Sandi Martin on Hiring a Financial Planner for

When you're ready to learn more about how you spend your money and create goals for saving more of it, then it might be time to enlist the help of a financial adviser.

But finding one that's a good fit for you can be daunting.

Just like in a job interview, until you see the person in action, there's no way to really know if they're going to be the best candidate, says Sandi Martin, owner of Spring Personal Finance. One fairly good indication that you're interests aren't aligned is if the plan and advice are free and there's no discussion about how the planner is compensated.

"If up-front commissions and ongoing trailing fees from the financial products you buy are paying for the advice you get, you should be examining the underlying costs of those products -- in real dollar values -- and evaluating if the advice you're getting is worth the ongoing price you're paying," the fee-only financial planner says.

Sandi recently checked in with us about how to get started on a financial makeover as well as advice for beginners on investing.

Can you tell us a little about Spring Personal Finance? What services do you offer? Who should be using them?

I'm an advice-only financial planner whose main role is to help you define the job your money has to do for you in the short-, medium- and long-term, and then find the simplest, most efficient way to get those jobs done while still living your life.

The foundation of all good financial planning is how you're spending and saving your money, so before we talk about retirement, or buying a house, or sending kids to college, I work with you to analyze your cash flow and build a budget that is based on how you actually spend and aligned with how you want to spend, and to develop individual strategies to help you stay the course. With a realistic cash flow plan in place, it's much easier to project the kind of income you might need in retirement, or the amount of savings you can really afford to set aside for education, or the amount of house you can realistically stand to carry.

Defining the cash flow and defining the goals lets me analyze your investments in context and identify how controllable factors like asset allocation and costs to invest are advancing those goals or holding them back.

Anyone who doesn't have a very clear idea of how they spend their money, has trouble seeing how their spending and their priorities align, has competing goals and not enough money to save for all of them, or who would like to have a clear idea of the direction their current level of spending and investing is taking them should work with me or someone like me.

When enlisting help to manage your money, what should you look for in a planner?

You should look for someone who will emphasize your goals as the starting point, and who acknowledges that life is messy, planning is imprecise and no one can see into the future. Your work with a planner should equip you to make ongoing decisions for yourself down the road by coming to a very clear understanding of your own financial situation, the direction you plan on heading, and the values that are important to you.

For someone who wants to start managing their money responsibly - whether they're just starting a career in their 20s or getting ready to retire in their 60s - where's the best place to start?

The best place to start is the place you want to end. There's no sense in starting with a budget or a financial plan without being absolutely clear about what's really important to you, what you'd like to accomplish and the values you want to build your life around.

When an individual or family is sitting down to look at their totally financial situation, what different areas should they be looking at?

All the usual areas - cash flow, debt, insurance, investments, but again, the most important area to look at is the reason that you're sitting down to look at the financial situation in the first place. Getting your financial house in order is next to impossible if you don't have a motivating purpose for doing so.

What do you think are the biggest mistakes people make when creating a budget? How do you coach them to make a budget they'll stick to?

People starting out so often make the mistake of believing that creating a budget will effect a change right away, and get discouraged the first time they get off track. Sticking to a budget is a matter of training and discipline, and it's a rare person that gets it right the first time. My coaching is always to evaluate where they go wrong and be prepared to adjust course along the way, instead of throwing up their hands in frustration and giving up on purposeful spending.

For people who are intimidated by the prospect of investing, what advice do you have on getting your feet wet?

My advice is always to start easy and boring, and -- ideally -- stay that way. A simple index portfolio, added to regularly, rebalanced annually and ignored daily is the best way for new investors to start well. The best way to overcome intimidation is to set a (short) deadline, read a common sense book like 'The Wealth Barber Returns,' and then just do it.

For those who have some experience under the belt, what advice do you have on solid ways to expand and/or diversify your portfolio?

Carefully. Experienced investors are just as susceptible to error, overconfidence, fear, and recency bias as amateur investors. Any changes to a portfolio or investment strategy ought to be thoroughly evaluated in light of the job that money has to do. It's a rare client that needs to venture out any further than a globally diversified, small set of index funds or ETFs.

What types of investment opportunities do you steer your clients away from? Why?

While I don't give advice on specific securities, my clients all get the same investment advice from me: boring is best. Simplicity trumps complexity, and fees matter. Any investment opportunity that ignores those two truths is very likely just an opportunity to lose money while lining the pockets of whomever is advising it.

What do you think is the worst thing a person can do when it comes to managing your debt?

The worst thing a person can do about debt is to ignore it and hope that it will all go away, because it won't.

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