DIY Financial Planning

The weather is breaking and spring is in full bloom – people are starting projects to update and freshen up their homes. Over the last two months, I’ve made numerous trips to Home Depot in my own attempts to “do it myself.” DIY projects are usually a result of trying to save time or money, or utilize your skills. Some jobs we may choose to take on ourselves; others need a professional’s help. No matter the project, we generally assess the task to determine whether we can DIY or need assistance. I see finances in the same light, and ironically, it comes down to roughly the same three questions. Do I have the time to put in the research? Am I willing to pay advisory fees? How difficult is the financial task I’m trying to accomplish? The following is a list with regard to your finances which, in my opinion, could be DIY – or, they may require investment expert help.

401k/403b Retirement Investments – Most plans now offer a Target Date retirement fund. For example, if you’ll retire in 2032, there’s a fund specifically designed to manage risk for everyone in that group of people. You could take a DIY approach to this without paying for professional advice. Be sure to consider the amount of money in your retirement plan and the funds available to you.

Life Insurance – Getting advice in this area could be life-changing for your heirs. You can do this alone with a few different internet searches, but the cost difference when using an insurance agent vs. gaining the policy online by yourself may be worth getting an expert opinion.

Your Estate Plan – In my opinion, you shouldn’t tackle this on your own unless you are a legal professional or have a lot of experience in this area (which most people do not). Getting the right documents in place is necessary, especially for families with young children or with sizeable assets and/or life insurance. It isn’t cheap, but estate planning may be something to consider.

Retirement Planning – It is also my opinion that there is great value in sitting down with a qualified advisor to get your retirement plan in place. I’d recommend starting in your early 30s, then tuning up that plan in your 40s to make sure you’re on pace and then, really start keeping a close eye on the plan from your 50s to your 60s.

Portfolio Construction & Money Management – I compare this to working on your own car. Some people love to get under the hood; personally, I have no clue how to change oil or switch out brakes and don’t want to take the time to learn. So, I gladly pay my mechanic to make sure my car is running properly. My friend, Brian, does design work for GM, knows cars like the back of his hand, and would never spend a penny on a mechanic. Building your own investment portfolio is similar. If you enjoy doing it and it’s worth your time and energy to research funds and stocks, don’t spend money on a “mechanic.” Just like fixing your car, building a good portfolio is not rocket science; but it does take effort and experience.

As with home improvement projects, deciding what future financial planning you want to tackle will require an honest appraisal of your time, money and skill level to determine what is reasonably DIY. On those you decide to do yourself, I wish you great success! For those areas that cause you some anxiety, be sure to contact a financial professional for help and guidance.