Money Matters: DIY or Get Help?
By: Dawn Mabery Chestnut
The recent furlough shined a glaring light on the frightening level of financial instability among American households. That temporary political power play with one’s economic livelihood is just everyday life for those who happen to find themselves members of underserved communities. Those economically disadvantaged for reasons of race and social status merit particular consideration. They bear the brunt of this country’s past and present practices of creating economic and systematic barriers. Practices, which have resulted in generations of lost wealth that can never be fully recovered.
The recent furlough shined a glaring light on the frightening level of financial instability among American households.
Today’s wealth gap and how to better equip individuals from underserved communities to achieve economic mobility has been debated among the public and private sectors. Part of the solution can include working with a trusted licensed financial planner. I went from believing that financial planning is not for someone of my socio-economic background, to teaching financial literacy to those in underserved communities, to becoming a full-fledged financial planner with a mission to help the everyday average person make educated financial decisions. In sharing this journey, I hope to convey the value of these services for underserved communities.
Background Shapes Money Ideas
I grew up in a large family of nine children and we certainly had our share of financial struggles. Like many families, we lived pay check-to-pay check, thus making saving for the future a moot point. I paid for college with student loans, on-campus work-study and scholarships. I came up short on tuition one year and college officials told me that I would be escorted off campus if the funds were not received. That crisis was averted, making me the first in my family to graduate from college. As I reached adulthood, my feelings about financial advice was not unlike most people I knew.
Not For Me: It was for the wealthy.
Too Expensive: I didn’t make enough money or my finances were too simple to justify the expense of a planner.
Do-It-Yourself (DIY): The folks I knew didn’t have money managers and they managed just fine, so I didn’t need one either.
Limitations of DIY
Therefore, in our DIY society, I set out to manage my finances on my own. I researched the internet, listened to financial gurus on tv, used robo advisors and attended financial education presentations. I even taught financial literacy classes to teens in afterschool neighborhood community centers and low-income residents of a public housing complex. After classes, the adult students regularly requested one-on-one time to get help with their specific financial situations.
I, like my students, realized that though generally helpful, information found through DIY methods tend to be very broad and basic and it does not clarify how it can be applied to individual needs. In fact, these resources provide disclaimers stating just that and instructions to “seek advice of qualified professionals regarding your individual circumstances”.
My financial frustrations only grew as the free-wheeling simple days of my 20s turned a bit more complicated in my 30s when I began my own business, got married and bought a home. I needed to become intimately familiar with how these changes impacted my bottom line. The time had come to do away with the myths I developed in my youth. The truth was that I wasn’t “managing just fine” and DIY had taken me as far as it could.
What You Don’t Know Can Hurt Your Bottom Line
By the time I saw a financial planner, I only wished I’d done it sooner. While the following are just a few examples, there is a wide range of ways a financial planner can be helpful. Their value-add will vary depending on the specific needs of each client. By getting into the weeds of my entire financial picture, the planner:
Fit My Needs: Understood my nuanced needs and preferences. Was not one-size-fits-all service.
You Don’t Know What You Don’t Know: Identified problems I didn’t even know I had and provided options to fix them.
Saved Me Money, which far exceeded the cost of the planner’s services.
Not getting the best financial advice can hurt our bottom line, whether we realize it or not. The common expression “ignorance is bliss” does not apply in matters of money. What you don’t know is likely costing you. Seeking the advice of a trusted licensed financial planner can take money management to the next level and help build wealth for generations to come, especially for underserved communities.
Call around to a few financial planners. Use resources like napfa.org, which lists planners who are fiduciaries. Interview them to see who can meet your specific needs, who you can trust and which are most cost effective. Just as important, see with whom you feel comfortable and have a good rapport.
Dawn Mabery Chestnut is a licensed fiduciary financial planner at District Capital. She believes that financial planning is essential to economic success for everyone, no matter their income level. Dawn enjoys providing personalized financial planning advice. She lives in Washington, DC and enjoys gardening.