Get It Together: Financial Planning Basics

You've heard all the talk about getting your finances together, but how exactly are you supposed to do that?

A good place to begin is finding the various advisers you'll need. Start by asking friends who they use for their taxes and financial advice. A referral will serve a dual purpose: you'll get someone with a track record who has worked with someone you trust, and you may even get special treatment because you're a friend of a client.

Also let your advisers refer you. If you have a broker who has done great work for you, ask for a recommendation for an accountant. Financial professionals generally have a good grasp of who the best practitioners are in related fields.

You want to strike a balance between someone who has been around long enough in the profession to know all the rules and laws and someone who can grow with you as your income grows and your investment goals change.

Some of the people you might want in your stable of advisers:

  • accountant
  • stock broker
  • mutual fund adviser
  • insurance agent
  • benefits manager at the company where you work


Once your tax bill becomes larger and more complicated, you'll want to have an accountant handy to answer tax questions and to help you find legal deductions you may not be aware of. Your accountant can save you money by finding ways to legally apply some of your expenses to your tax bill and figure out where you can save money.

Your accountant can give you advice year-round -- about whether to accept a bonus at the end of the year or in equal payments throughout the year, for example; there is a big tax difference between the two.

Your accountant can also advise you on when to sell investments -- stocks, bonds and mutual fund shares -- because the time you sell and whether you're selling at a profit or a loss affects your taxes.

Brokers, Mutual Fund Advisors and Bank Professionals

The first place to look for financial advice is the bank where you have an account. Financial professionals at your bank can help you to get a portion of your paycheck deposited directly into a savings fund, they can help you set up money-market funds, or they can handle money you'd like to invest in a certificate of deposit (CD), which is a longer-term investment that gives you a higher interest rate than a regular savings account.

Some banks have mutual fund representatives who can help you invest in one of a group of funds. You can then choose to have money invested directly into those mutual funds each time you get a paycheck.

Another way to invest in mutual funds -- or in individual stocks -- is to enlist the services of a brokerage firm such as Paine Webber, Hambrecht & Quist or Charles Schwab. Some firms are more hands-on, providing advice in exchange for a fee, while others just charge you for any transactions you make, such as stock purchase and sales.

The best way to find a good broker is by word of mouth. Ask friends or family members for referrals, and set up initial consultations to see whether you feel comfortable with your working relationship. Then invest slowly at first and gauge how responsive your new broker is to your questions and needs.

Insurance Agents

Insurance agents act as a liaison between you and an insurance company, whether it provides health insurance, homeowners insurance or car insurance.

Why have an insurance agent? The main reason is to help you find good rates on the various types of insurance and to help you get discounts by buying several kinds of insurance from the same carrier. For example, some insurance companies offer a discount if you buy renter's insurance and car insurance from them. And you might not know about such deals without an insurance agent combing the field for you.

Don't worry, they don't cost you a penny. Insurance agents make their money from the insurance companies when they find them clients like you. They can also act as a go-between for you and the insurance company -- so if you get into a car accident and don't know whether you were at fault, you can run it by the insurance agent and ask questions before spilling your guts to an insurance company.

Benefits Manager at Your Company

The benefits manager where you work can help you get the most out of any benefits your company provides, including vision and dental care plans, pet insurance, paid maternity leave, health club benefits, purchase of company stock and a host of other benefits your company may provide.

Get to know this financial professional and take advantage of as many work-provided benefits as you can.

Try not to feel overwhelmed by the thought of rounding up all these professionals. You can try some of them on for size on a short-term basis -- for example, have one accountant do your taxes one year -- and decide whether there's a good fit. You aren't obligated for life if you don't like someone's style or way of doing business.

The best thing about launching your life of financial independence is that you'll be in complete control of your finances, no matter what comes along. And that feels pretty good, especially when something does come along.

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