FLM Step 28: The Weakonomist on assembling a financial team

In honor of Financial Literacy Month, we created a microsite that offers 30 simple steps to financial wellness–one for each day of the month. To enrich the experience, we asked some amazing people to guest post during the month on a topic that is related to the day’s step. Their dedication to financial literacy is truly inspiring! Today, The Weakonomist talks about assembling a financial team.

So you're getting your finances in order, but you haven't yet mastered all aspects of financial literacy. That's okay, none of us ever do. We can make our financial lives easier though by establishing a team of trusted advisors to help out. To help make better sense of who you need and when, let's compare your financial team to a football team.

Quarterback: You are the quarterback. The quarterback is in charge of every play on the field. They decide who to throw the ball to, if they should pass it off to someone else, if they should make a run for it themselves, or perhaps throw the ball away and start over. You are in charge of your own financial destiny. You decide who gets what and when, and that decision should always be yours and yours alone.

Center: The center is the big guy who hikes the ball to the quarterback at the start of the play. Your tax advisor is your center. Before you (as the quarterback) ever see the ball on each play, it must pass through the center's legs, just like before you ever get paid you pay taxes to the government. Your tax advisor can help you with setting up the proper withholding taxes, and help you at your annual or quarterly tax meetings to optimize your returns. After the ball is hiked, the center will also help protect you from the other team trying to get you. By the same token your tax advisor will help protect you just in case the IRS or some other regulatory agency has a problem with your tax filings.

Guard: Another protector of the ball and quarterback is the guard. He lines up next to the center. The guard in your financial life is the lawyer. Your lawyer will help protect you and your assets from all the governments (and relatives) that may come after you. There are lawyers that specialize in estate planning, bankruptcy, and any other legal matters you may need to attend to. Make sure you find one that is a specialist in your area.

Running Back: Many plays the quarterback will run rely on the running back. He stands behind or beside the quarterback and can do a variety of tasks. He can block, run the ball, and go out for a pass. The versatility of the running back is akin to the versatility you can get with a financial planner. Your financial planner can help you with investments, debt management, estate planning, budgeting, and even taxes.

I recommend finding a Certified Financial Planner (CFP) as they are required to meet education, experience, and ethics requirements. If you have assets around or above $500,000 consider finding a CFP that is also a member of NAPFA; they are the National Association of Personal Financial Advisors and they only work on a fee basis, as opposed to a commissioned position.

Wide Receiver: Sometimes the line breaks through and all your guards aren't able to protect you from the overload. You've got nowhere else to turn but to look down field. You throw up a Hail Mary pass. Your ball is caught by the wide receiver! This is your credit counselor. Despite our hopes to not to rely on a credit counselor, they are there when you need them and can often get you out of the tightest spots of your finances.

Remember a team is only as good as the individual players on your side. The positions I listed above aren't everyone you may need on your team to keep your financial house in order. You want to surround yourself with friends and family that support you in this journey.

T he Weakonomist fell in love with finance at an academic level and then migrated his way into personal finance. Read more on his blog Weakonomics.com.

 

Kim McGrigg is the former Manager of Community and Media Relations for MMI.

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