Everyday Cheapskate: Showing up is hardest

Here’s the question that started the ball rolling: “When would you like to have the option to stop working?” Selecting a date gave the planner a frame of reference to begin creating a plan that will allow us to do that.

Through this process I’ve learned there are basically three types of financial planners, the difference being the way the planner is paid.

Fee-only. This type of financial planner charges a set fee, charging either by the hour as an attorney would or a flat fee like a doctor. You have your initial meeting and then a follow-up appointment when the planner hands you an estate plan developed just for you. It’s up to you to implement the plan.

Fee-based. This is the same as the fee-only arrangement except for having to implement the plan yourself. With a fee-based plan, the up-front fee is usually less. However, once the plan is written, the planner will work with you to get everything in place. If you purchase financial products like insurance or investments through the planner’s firm, he or she will earn commissions. However, you are not obligated to buy through the planner’s firm.

Product-based. In this arrangement the planner does not charge an upfront fee, but receives all of his or her compensation through commissions on the financial products recommended.

You may be years away from needing the services of a professional financial planner. But you can, and should, start getting ready for your appointment now.

Get out of debt. If you are carrying unsecured debt, this is the first thing any planner worth his door plaque will tell you: Get rid of your credit card and all other unsecured debt. I can teach you how to get out of debt quickly and relatively painlessly.

Start saving. You will need a savings account with at least six months of living expenses in it. Start saving now even if you are in debt, even if you think you can’t. You can. You have to!

Know your benefits. Once a year the Social Security Administration updates a projection of your retirement benefits. Let those numbers keep you motivated to save, plan and invest. Don’t plan to live on Social Security. Access your statement at www.ssa.gov/mystatement. Keep good records. Figure out a simple filing system where you can keep your important papers: Your mortgage, insurance policies, wills and investment statements.

There was a time, and not so long ago, I would have preferred to shove toothpicks under my fingernails than meet with a financial planner. But I’ve changed my mind. In fact I’ll take a meeting with a financial planner any day over one that involves weight scales, blood pressure cuffs and the snapping of rubber gloves.

Mary Hunt is founder of www.DebtProofLiving.com and author of 24 books, including her 2013 release, “The Smart Woman’s Guide to Planning for Retirement.” You can email her at mary@everyday

cheapskate.com, or write to Everyday Cheapskate, P.O. Box 2099, Cypress, CA 90630.