Over the years I’ve been asked, and I used to ask myself, why hire a professional – I can do this myself and save some money! This has ranged from things as complex as my estate plan to as mundane as getting a housekeeper; but they all have a few common themes.
So let’s address these questions, and explore why – depending on the situation – it makes sense to go with a professional.
We’re all busy, I’m sure at some point we’ve all wished we had more time in the day to get everything done. Knowing this, do you really want to add something else? To the best of my knowledge, nobody has added another hour to the day; and we still need sleep to function. So rather than just say “I’ll do it”; consider – when will you do it? What do you have to say “no” to, so you can fit this into your schedule? Finally – which will bring you more satisfaction and happiness? Sounds a little corny, perhaps; but we’ve got a limited time here and there are enough external stressors – why add one more?
Ok, so my housekeeping example probably doesn’t require very much knowledge – so that’s a case where question number 2 more than likely doesn’t apply. But let’s explore (3) other major areas – taxes, estate planning and financial planning.
I don’t think anybody is going to argue with my assertion that the tax code is ridiculous. Thankfully most of us (as individuals, not business owners) only need to worry about this once/year; and not everyone will need to hire an accountant or tax preparer. There is software available to submit your federal return for free, and a nominal rate for your state. However, as your life becomes more complex – multiple properties, children, starting a business, etc.; the need for a professional becomes much more pressing. They will know what questions to ask, and depending upon who you hire; will be by your side if you should be audited. As you leave the world of 1040EZ behind, and start adding 1099 (fill in the type) and schedule A’s; I’ve found it beneficial to have someone who can explain just what I’m looking at.
Estate planning doesn’t have to mean setting up trusts and appointing guardians. It can be as simple as identifying primary and contingent beneficiaries on your accounts. An estate planning attorney will ensure your wishes are clear, and are outlined within state guidelines. Sure – there are online resources like LegalZoom; but these are designed as “simple” solutions. For example, if you’re in a blended family with multiple children and are concerned about who gets what and when; an attorney is a much better resource. They’re also a great resource if you want to know what the state says you can or can’t do – nothing worse than your heirs trying to untangle a mess because the documents prepared online don’t fit within the State’s statutes – which unfortunately often occurs.
Financial planning is more than (or should be) talking about your retirement accounts and what to invest in. This is one aspect of your plan, and if you’re working with somebody on this – great. But there are many more details to your life – buying a home, paying for a child’s wedding, dream vacations, etc… Financial planners can, and will, help you understand what resources are available and how to apply. They know, and will explain, how all these pieces fit together to provide financial security; and they make themselves available when you have questions because you’re at a crossroad (for example, leaving a job, or thinking of early retirement).
We’re human, and we don’t always like the things we’re supposed to do – so we put off doing them. We know we should eat healthy and work out, but (and I’m as guilty as the next person) we’ll get to it “tomorrow”. Hiring a professional makes us accountable – now we’re more likely to do it because it’s costing us money. Hiring a personal trainer is different than having a gym membership; there’s more commitment. When you pay a professional don’t think of it as giving up control, because you still have a say in what’s happening. Instead, think of it as making somebody else do something you really don’t like doing (in my case – housekeeping and yard). I know I can do this stuff, it’s not difficult and doesn’t even really take that much time. But I don’t like to do it, so I procrastinate. Then, when I finally suck it up and start, it’s so much worse than it has to be. Sound familiar?
“It’s so expensive!” Professionals cost money, there’s no way around it. You’re paying for their experience, education and time; just as you get paid for the work you do. I’m guilty of trying to save money just to have it blow up in my face – with everything from car repairs to painting a house. Many of us don’t think twice about what we’re spending on our cell phone or cable bills, but when it comes time to hire somebody we’re suddenly Ebenezer Scrooge trying to squeeze every penny until it bleeds.
Be realistic – if you attempt to do this yourself, and it’s more involved than expected; how much could it cost? Weigh that against what it costs to hire a professional. Professionals are often insured, so if something goes wrong there are protections in place. Shop around, get quotes or look at websites to see what average rates are – much of this is public information; and if somebody is unwilling to give you an estimate now you have a valid reason not to hire them.
Consumers need to be careful, no doubt. I’m not suggesting every problem needs a professional solution; I’m advocating for people to keep an open mind and be honest with themselves. If you know you need to do something, and you haven’t done it yet; it’s probably time to hire somebody. True issues and concerns don’t get easier or smaller over time, quite the opposite. The longer it’s put off the more difficult it is to overcome inertia and get it done. Life is too short to live stressed out, especially when so often there are solutions available if we just get out of our own way