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When clients come to financial planner Holly Hanson for help at Harmony Financial Strategies, she starts by getting them to prioritize.
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Hanson says many people are fearful that they aren't financially ready, or don't know enough about money, to start building wealth with a financial planner — even though, she points out, "it has been proven time and again the earlier you start, the better your results."
So she starts with prioritization.
"Once they feel more confident in starting now, the best way to get them on track, and to keep them focused, is to prioritize their goals," Hanson tells Business Insider.
"Part of this process is for them to decide (when it involves saving for a vacation versus buying a boat, for instance), but the part they need help with is in what order does each goal need to take place from a financially responsible standpoint."
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Then, they turn to eliminating any debt. "My advice always starts with paying off 'bad debt' first, from the highest interest rate to the lowest, while knocking out smaller credit cards first to keep them from getting overwhelmed," Hanson explains.
"The next step is creating a sufficient account for 'emergencies' — anywhere from three months to a year depending on the client's work stability and risk tolerance. Once these two priorities are knocked out, then we have the discussion of goals and order them according to the client and the importance they place on each goal."
Once that plan is in place, she says, the best thing a client can do is trust it.
"The smartest decisions I have seen a client make with their money is to trust in their plan. Out of all the scenarios I have been through with clients, this is the one that has created the best results for them financially as well as providing them peace of mind," she says.
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She recalls "hours and days" spent talking to clients and reassuring them of their long-term financial strategies during the market fluctuations that started in 2008, and reminding them that selling in such a down market would hurt their plan more than staying the course.
"It was trust that allowed them to stay in such an uncomfortable place and this trust is what they now look back on and are thankful for, in that they are still on course or have successfully achieved their financial goals," she remembers.
Executive Editor, Personal Finance Insider
Libby Kane, CFEI, is the Executive Editor for Personal Finance Insider, Business Insider's personal finance section that incorporates affiliate and commerce partnerships into the news, insights, and advice about money Insider readers already know and love. She holds the Certified Financial Education Instructor (CFEI) certification issued by the National Financial Educators Council. Previously at Business Insider, she oversaw teams including Strategy, Careers, and Executive Life.Her team at Insider has tackled projects including:• Women of Means, a series about women taking control of their finances• Inside the Racial Wealth Gap, an exploration of the causes, effects, and potential solutions of the racial wealth gap in the US (finalist, Drum Award, "Editorial Campaign of the Year," 2021)• Strings Attached, a series of essays from people who have left insulated communities and how that journey affected their relationship with money• Master Your Money, a year-long guide for millennials on how to take control of their finances (first runner up, Drum Award, "Best Use of Social Media," 2022)• The Road to Home, a comprehensive guide to buying your first house (silver award winner, National Association of Real Estate Editors, "Best Multi-Platform Package or Series – Real Estate," 2022)Personal Finance Insider also rates, explains, and recommends financial products and services.Outside of personal finance, she's written about everything from why Chinese children are so good at math to the business of dogs to hard truths about adulthood.In September 2016, she helped launch Business Insider Netherlands in Amsterdam.She also spent three years as a member of the Insider Committee, a cross-team focus group working on making Business Insider an even better place to work.She's always interested in research, charts, and people: new and interesting research, compelling charts and other visuals, and people who are willing to share the details of their impressive financial accomplishments and strategies.Before joining the company in March 2014, she was the associate editor at LearnVest, covering personal and behavioral finance.If you have something to share, please reach out to lkane@businessinsider.com.
