5 Life-Changing Moments When A Financial Planner Can Make A Difference

Pang Tun Yau

31st March 2021 - 6 min read

Most of the time, you don’t need a financial planner. Like other professions like a doctor or a lawyer, you only need to meet one when the situation arises and their counsel and professional recommendations can make a real difference.

But, when should you speak to a financial planner? In essence, you should consult one whenever you are facing or planning something that will affect your financial situation. If that sounds confusing, here are the most common scenarios when you should make an appointment with your financial planner.

Marriage Or Starting A Family

One of the biggest life-changing moments is committing your life to someone. It is also the moment when every financial decision should be made as a couple – especially when there will be bigger financial decisions to be made down the line.

Assessing both your financial situations as a married couple is actually a very important task (some may argue this should actually be done before tying the knot!). Knowing what you have and what you can afford to spend are just the tip of the crucial information to help make married life that little bit smoother. On top of that, not many are aware of the financial burden of having children, and as a result, it can be a cause for disagreements.

A financial planner can independently assess both the husband and the wife’s financial states, and help chart out a path to reach their collective financial goals. Whether it is a new home, having children, retiring comfortably, or all three, a financial planner can share their recommendations to hit the couple’s financial goals within a stipulated time frame.

At the same time, having an unbiased consultation from a third party can also ease any potential friction when there is a difference in opinion. Hopefully.

Getting A New Job (Or Losing One)

At any point in your professional career, you may receive new job offers. When you decide to accept it, it is a good time to set a meeting with your financial planner. Why?

Your financial circumstances would change. That means your current financial plan (if you have one) would need to be tweaked. There may be an increment involved, or additional benefits that may be tax deductible (which you may not be aware of). The new role could also involve outstation travel. Or, with the additional income, you could have new goals, such as upgrading your car. Either way, a financial planner would be able to optimise your current plan to fit the new job or any short-term goals you may have. They could recommend how you could benefit from the potential tax benefits or even from the outstation travel, for example.

Likewise, a financial planner’s services would also be crucial if you ever lose your job. The uncertainty and emotion surrounding any job loss could cloud an individual’s judgment – which could make matters worse.

Just like getting a new one, losing your job means a change in financial circumstances. Sure, you could plan out how to reduce expenses and cutting unnecessary costs. A financial planner could go further, offering recommendations on getting temporary financial relief that you may not be aware of such as the Employees Insurance Scheme (EIS), and helping to tweak your cash flow to ensure you’re not overburdened.

Deep In Debt

This might sound counter-intuitive, but spending money to engage with a financial planner when you’re mired in debt could be one of the best things you can do in this situation.

Whether it is a bad business decision, a family medical emergency, or simply a reckless spending spree, there are many ways you could end up uncomfortably in debt and struggling to repay them. Add in clouded judgment or worse, bad advice from friends and family, this debt could end up crippling your life.

In this case, a financial planner could first help you assess how much debt you have before crafting a plan to tackle it. Depending on the type of debt (credit cards, personal loans, etc) the financial planner could recommend several options, such as a debt consolidation loan, debt restructuring, as well as some tried and tested debt reduction strategies like the avalanche or snowball methods.

When You’re Under 30 Years Old

Engaging with a financial planner before 30 years old? Is that even remotely necessary?

In reality, one should consult a financial planner as early as possible in their working life, because it extends the “runway” with which you can achieve your financial goals – regardless of how much you may be earning at the time.

It may sound excessive, but some financial experts have recommended that first-jobbers meet a financial planner as a means to help them understand their finances better and be more disciplined in the process. More importantly, starting early also means it’s easier to hit your long-term financial goals.

Think about it. Without any compounding effect, if you’re 25 and saving RM300 a month, you’d have RM90,000 when you reach 50 years old. But if you’re 40 and set aside the same amount, you’d only have saved RM36,000. The difference becomes much more apparent if the saved amount goes to some form of investment, as well as the effects of compounding interest, which you can find an example in a previous article.

This also applies if you’ve made some rash money decisions in your youth (don’t worry, we’ve all been there). A financial planner, without judgment, can set a path to help “fix” the situation and set you on your way. The earlier you do this, the longer your runway becomes and the easier it is to achieve your financial goals.

Financial Planning Is For All

As you can see in the examples above, the services of a financial planner isn’t reserved only to the wealthy. This is actually one of the biggest misconceptions of financial planners – and it is partly due to the costs involved with engaging one.

That said, RinggitPlus believes that financial planning should be both accessible and affordable. As such, the newly launched RinggitPlus Financial Planner aims to provide professional financial planning services at up to 83% lower rates* than the market. For Muslim clients, RinggitPlus Financial Planner also offers licensed Islamic Financial Planners. Everything is conducted online, too, so you can meet your Licensed Financial Planner anywhere.