Financial Planning Advice from the Experts

Financial advisers are everywhere, but some stand out as gurus. These men and women have years of experience, and make their careers from guiding clients, readers and listeners toward sound practices that will help them eliminate debt, build wealth and secure a comfortable retirement.

Some of these experts have achieved veritable star status, and that doesn’t happen if the financial advice doesn’t work. Here’s what a few of the most well-known money management gurus have to say about debt reduction, guarding your retirement accounts, and changing your attitude about tax refunds:

Financial planning

Dave Ramsey

Known as one of the top financial experts in America, Ramsey is an author, financial adviser, TV and radio personality, and also a motivational speaker. He encourages people to pay off debt, save money, and strive for a debt-free life.

One of Ramsey’s biggest and most popular pieces of advice is to pay off the smallest debts first, and work toward paying off the larger ones. He explains his reasoning in the blog post, “Get Out of Debt with the Debt Snowball Plan“:

The math seems to lean more toward paying the highest interest debts first, but what I have learned is that personal finance is 20% head knowledge and 80% behavior. You need some quick wins in order to stay pumped enough to get out of debt completely.

More traditional advice suggests paying off larger debts or those with higher interest first. Ramsey believes paying off the smallest debts first helps give you a quick, psychological momentum boost, which can spur you on toward paying off progressively larger debts.

Financial planning

Suze Orman

Suze Orman is one of the most well-known personal finance experts in America.  She is an Emmy award winning television show host, bestselling author and columnist. 

Orman has strong opinions about a lot of things.  Recently, she reacted strongly with CNBC producer Sakina Spruell on the idea of withdrawing money from retirement funds to pay off debt. 

Orman said, in response to a caller with $50,000 in debt:

The last thing I want you to do is to take money from a retirement account such as a 401(k) and pay off credit card debt. That is simply wrong. Remember, any money you have in a retirement account is protected against bankruptcy so if you really can’t afford to pay these payments, bankruptcy is more of an option.

Your 401k might seem handy, but it’s not meant to be used as an emergency fund, and certainly not for paying off debt. There’s the bankruptcy protection that a 401k gives, but there’s also the fact that withdrawing from a 401k early brings a steep tax penalty. 

Financial planning

Ric Edelman 

Ric Edelman is chairman and CEO of Edelman Financial Services, has written many personal finance books and hosts weekly talk radio show, “The Ric Edelman Show.” 

In an article, “Are You Giving the Government an Interest-Free Loan?,” Ric talks about the thrill many people get from a tax refund, and how the happiness is misplaced. 

Remember that a refund from the IRS is not a gift from the government; it’s merely the return of your own money to you. If you get a refund, it means you gave the IRS an interest-free loan in the prior year. Would you lend Macy’s $3,000 and be excited when you got it back the following April with no interest? Of course not! Yet that’s exactly what happens when you overpay your taxes: The IRS returns only the amount you overpaid, with no interest, regardless of how much money you “loaned” it.

When you get a refund on your taxes, it’s not found money. It’s your money that you’ve allowed the government to keep and control until you filed the paperwork to have the IRS give it back. Adjusting your withholdings lets you come much closer to only giving Uncle Sam what he is due, which allows you to put that money to better use. 

Finding Your Own Financial Guru
Financial advice is as broad as it is tall. And there are numerous reputable experts who can guide you toward smart decisions. Not every piece of advice is universally appropriate for every person, and that’s why you should learn what you can and then take control of your own money. 

Finding what works for you is only half of the battle. Setting that advice into motion is a life’s work, but it’s work that can benefit you now and through your retirement. 

Are you interested in help from a financial advisor?  Get a FREE one on one initial consultation with a certified financial planner.  We will find someone who matches your needs. Or browse advisors to select one yourself.

NewRetirement Planner

Do it yourself retirement planning: easy, comprehensive, reliable

NewRetirement Planner

Take financial wellness into your own hands and do it yourself retirement planning: easy, comprehensive, reliable.

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