You're drowning in debt. Or, you get hit with a huge tax bill. Or, you find your spouse's secret credit card. You might want to seek professional help — but first, learn which money pro is best for your situation.
Here are some common money problems, and the lowdown on which financial pros can help you solve them, and how:
Scenario No. 1 — You're broke and getting hounded by debt collectors.
The pro: Credit counselor
If you're in financial distress — for example, you racked up a load of credit card debt, you've depleted your savings or you can't pay your utility bills — credit counseling might help, says Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling.
Services: Credit counseling agencies offer budget counseling, debt counseling, debt management plans, bankruptcy counseling and housing counseling for first-time home buying, reverse mortgages and foreclosure prevention, Cunningham says.
The cost: Most credit counseling services are free or low cost, according to the NFCC. For example, ClearPoint Credit Counseling offers free counseling and charges about $50 per month for a debt management plan, $20 to $50 for bankruptcy counseling and $125 for pre-purchase housing counseling by phone.
How to choose a credit counselor: Look for a reputable nonprofit credit counseling agency with trained, certified counselors, the Federal Trade Commission recommends. Check with your state attorney general and local consumer protection agencies for complaints, the FTC advises.
Seek help sooner rather than later, Cunningham says: “Most folks wait too long. They don't reach out for help until they're hurting.”
Scenario No. 2 — You're a rock star with the family budget but need help sorting out your financial big picture.
The pro: Certified financial planner
If you want help making smarter money choices and figuring out how the individual pieces of your finances fit together, you might want to visit a certified financial planner (CFP). “The vast majority of certified financial planners help people who already have the basics and fundamentals down,” says Ed Gjertsen, a certified financial planner and president-elect of the Financial Planning Association. A CFP must pass a rigorous exam from the CFP Board and must comply with the board's code of ethics, which includes putting the client's interests first.
Services: A certified financial planner will look at your income, assets, debts, taxes, insurance and retirement and estate planning, according to the FPA. The planner will discuss your goals and create a plan, Gjertsen says: “You should come away with a written plan — a guide for your financial life.”
The cost: Some financial planners earn commissions on products such as stocks, bonds and insurance. If the planner charges an hourly or flat rate, you could pay $150 to $300 an hour, for a total of $1,000 or more, according to the fee-only Minerva Planning Group in Atlanta.
How to choose a certified financial planner: The Financial Planning Association offers a CFP search tool. The FPA also offers a list of questions to ask a CFP you're considering. Know how the financial planner gets paid, Gjertsen recommends: “Full disclosure is incredibly important.”
Scenario No. 3 — You're in debt because you pull out your credit card and go on a spending spree any time you're in a bad mood.
The pro: Financial therapist
Do friends and family tell you that you have issues around money? If so, a financial therapist might be able to help, says Mary Gresham, an Atlanta psychologist and financial therapist. A financial therapist should be a credentialed, licensed mental health professional, such as a psychologist or a licensed professional counselor, who has expertise in financial disorders. The most common financial disorders are money avoidance, compulsive spending and family disputes around money, Gresham says.
Services: Different financial therapists used different methods, such as psychodynamic therapy or cognitive behavioral therapy. Some also use psychoeducation: “That's teaching the person financial literacy at their own pace and in their own language,” Gresham says.
The cost: Most therapists charge by the hour or session, Gresham says. Health insurance won't pay unless the client meets the criteria for a diagnosis, such as anxiety or depression, she says. Hourly rates for a psychologist typically range from about $90 to $150, according to CounselorLink.com.
How to choose a financial therapist: The Financial Therapy Association offers a search tool by state. You could also seek therapy at a university, such as Kansas State University, that has a graduate school training program in financial therapy, Gresham says. Graduate students offer therapy in order to gain experience, Gresham says.
Scenario No. 4 — You shell out a huge amount to the IRS every year and worry you're overpaying.
The pro: Certified public accountant
A CPA can do much more than fill out your federal income tax return, says Cary Weston, senior technical manager for the American Institute of CPAs (AICPA). A CPA can help you plan your taxes, spot savings and advise you on the tax implications of anything, including marriage, divorce or having or adopting a child. She says: “Any time you have a major life change, chances are there's going to be a tax impact.”
Services: CPAs offer tax planning, tax advice and tax return preparation. Some CPAs offer other services. For example, a CPA with the personal finance specialist (PFS) designation from the AICPA would offer financial planning services.
The cost: Charges vary and might be based on an hourly rate or the type or complexity of the work, Weston says. Hourly rates range from about $100 to $230, according to the Illinois CPA Society.
How to choose a CPA: Before hiring a CPA, check with your state board of accountancy to make sure the individual has an active license. “A lot of people claim to be CPAs but aren't,” Weston says.
Scenario No. 5 — You dream of having enough cash to travel the world after you retire, so you need help with your investments.
The pro: Investment adviser
Investment advisers give advice on investments such as stocks, bonds and other securities, says David Tittsworth, president and CEO of the Investment Adviser Association. The profession is highly regulated by the U.S. Securities and Exchange Commission, following the Investment Advisers Act of 1940. Some investment advisers have minimum portfolio sizes — for example, $1 million, Tittsworth says.
Services: As a client, you get a written contract that spells out how the adviser will manage your investments based on your goals, Tittsworth says. Investment advisers typically have discretion to make decisions on their own, unlike brokers, Tittsworth says. “A broker would have to call you and say, ‘I have a hot tip. I want to buy 1,000 shares of XYZ stock,'” Tittsworth says.
The cost: Most investment advisers charge a percentage of the assets they manage for you, according to Tittsworth. A firm might charge about 1 percent or more of the assets, according to financial services firm PriceMetrix. For a $500,000 portfolio, that would be $5,000 or more a year. Some firms charge a flat fee: for example, Flat Fee Portfolios charges $199 a month.
How to choose an investment adviser: Look at an investment adviser's disclosures with the SEC to check for disciplinary actions by regulators, Tittsworth recommends. “If they've had prior problems, you want to know,” he says.
Before you seek the services of any money pro, it's a good idea to clearly define the problem for which you're seeking help, says Eric Tyson, author of Personal Finance for Dummies. Then, thoroughly check the credentials, experience, and potential conflicts of interest, he recommends.
“You need to ask a lot of questions and do your homework,” Tyson says.