Should You Hire a Financial Advisor To Get Help Breaking Out of the Paycheck-to-Paycheck Cycle?
Written by
G. Brian Davis
Edited by
Jenna Klaverweiden
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Living paycheck to paycheck can feel like sprinting on a treadmill — and never stopping. Those living paycheck to paycheck can work all day, every day, and not have a lot to show for it at the end of each month.
Does it make sense to hire a financial expert to help break the cycle? For some it does. Consider the following options for getting help breaking out of the paycheck-to-paycheck cycle.
The Cost of Hiring Expert Help
It’s hard to wrap your head around the idea of spending money in order to spend less money. Fortunately, there are multiple options, at different price points and pay structures.
“There are money coaches, financial therapists and certified financial planners (CFPs),” explained Deborah Johnson Miranda, coach and founder of Bee Money Coaching. “Any of these people can help you stop the paycheck-to-paycheck cycle, but their levels of education, experience and licensing will determine how much you pay for their services.”
Coaches tend to offer the lowest pricing and may charge by the hour or for a package with a set number of sessions. They aren’t licensed by the Securities and Exchange Commission and can’t offer investment advice.
Financial therapists typically charge by the hour, as do some CFPs. Some people living paycheck to paycheck may need help with budgeting and behavior — their day-to-day living habits. Those looking for help should reach out to as many different experts as they can, compare their pricing and most of all get a sense for their results in helping clients change their spending behavior.
No matter which type of expert one hires, they should plan to spend a few hundred dollars per hour of their time.
Free Alternatives
Before spending money on an expert, consider trying a free alternative. But set a deadline for seeing results, and if tangible results aren’t seen in that time frame, consider getting expert help.
Self-education and designing a new budget from scratch are good places to begin. Start by reading as much as you possibly can about both budgeting and ways to change spending habits.
“I have found that 99 times out of 100, if someone has no money left over at the end of each month, they are living above their means,” said Lucas Barcelo, finance and insurance expert at Thrivin Life. “Start by cutting out the seemingly small expenses, then look at reducing structural expenses like housing.”
It often helps to speak with people who know more about money — even if they aren’t a professional. Think of the top three people you know with financial savvy and enlist their help. Go beyond budgeting help and ask for help changing behaviors, such as accountability check-ins.
Another option is to research local nonprofits and other organizations that offer free financial counseling or other resources. Dana Miranda, author of the Healthy Rich newsletter, noted that individuals can also find help with specific problems like debt. “Look into nonprofit debt counseling organizations, which can help you understand your finances and make a plan for debt relief,” Miranda said.
Come at the Problem From Both Sides
Controlling spending and budgeting can lead to instant changes. But don’t stop at reducing spending. Also consider increasing income.
Finance expert Melanie Musson of Clearsurance.com recommended seeking a promotion or looking for a new job.
Start by looking up free or cheap career counseling services in the area. Earning more may require learning more and upskilling, which you could also work on as you trim your budget.
The Cost of Not Getting Help
Sometimes it costs money to get expert help. But it also costs money to stay in a paycheck-to-paycheck rut.
“Breaking this cycle requires real changes to your day-to-day lifestyle and spending habits,” said Bill Smith, CEO of W.A. Smith Financial Group. “Often we need more than the roadmap: we need someone to help us stay on it.”
Someone living paycheck to paycheck doesn’t necessarily need to cough up hundreds of dollars for a single hour with a financial professional (although that can work). But getting help in different ways is beneficial.
Consider starting with free solutions, but set a deadline with a specific financial target. If you haven’t reached your goal within the time you allowed yourself, commit to hiring expert help to save more, earn more and escape the paycheck to paycheck hamster wheel.
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