We live in a DIY world. People have been taking on more and more tasks independently — the barrier between “I don’t know how to do that” and “I can figure this out myself” has never been thinner.
Money management is no exception. More people are realizing that personal finance advice doesn’t have to come from a professional. With the right tools, some structure, and a willingness to learn and stay engaged, it’s possible to learn how to be your own financial advisor.
In this guide, learn if you should use a financial advisor or do it yourself. Discover how to build your own financial plan, from maintaining a budget to tax planning, and where a fixed annuity can fit into a DIY approach.
Why people choose to manage their finances themselves
The shift to DIY financial planning didn’t happen overnight. Real-world needs and trends are driving personal wealth planning:
- Advisor fees add up: Financial advisors total around 1% of your portfolio value annually. You’re paying this money whether the market goes up or down.
- Tools are more accessible: Low-cost brokerages with professional-level tools, budgeting apps, and DIY financial planning software have made personal finance management easier than ever. People have access to resources previous generations had to outsource to professionals.
- People want more control: With flexible access to resources, some people prefer to take ownership of their finances. DIY financial planning lets you take responsibility for your financial goals with a clear, well-structured plan. It also builds valuable financial skills.
6 core components of a DIY financial plan
You need a solid framework to be your own financial advisor. These six elements give you structure, clarity, and a way to monitor and maintain progress.
1. Budgeting and cash flow
Personal budgets help you plan ahead and adjust spending, so you have more money to pay down debt, save, and invest. Rather than simply listing income and expenses, you detail where cash goes. Many people use the straightforward 50/30/20 method: 50% toward needs (like utilities and groceries), 30% toward wants, and 20% toward savings.
2. Debt management
Managing debt helps you keep a healthy financial profile and provides more freedom. High-interest debt — like credit cards and personal loans — reduces investing potential. A DIY financial plan focuses on reducing debt by eliminating balances as easily as possible. For example, some people use the 20% from their 50/30/20 budget to lower loan amounts.
3. Emergency funds
An emergency fund is a cash reserve to cover unexpected costs, like a loss of income or medical expense. You typically save about three to six months of expenses and leave it untouched, just in case of emergencies. This reserve helps people consistently stick to a personal financial strategy — you’re less likely to abandon your plan if your budget gets thrown for a temporary loop.
4. Investing and retirement savings
Investing can seem intimidating, and it’s where most people assume they need a financial planner. Many people can manage it themselves with an intentional, consistent strategy. This means:
- A guaranteed interest rate for a set term
- Protection of principal from market losses, subject to the claims-paying ability of the issuing insurance company
- Tax treatment that depends on the contract: some grow tax-deferred, while others are taxed annually.
Some people add a fixed annuity to a straightforward investing plan for predictable growth on part of their retirement savings. A fixed annuity typically offers:
- A fixed rate of return
- 100% principal protection
- A steady paycheck in retirement
5. Tax planning
Personal tax planning lets you see and control your finances, including budget, income, and investments. Without the aid of a tax professional, the work is more hands-on, but you get visibility and control in return. Here are a few details you can monitor:
- How your investments and accounts are taxed
- How retirement contributions can reduce your taxable income
- When to tax investment gains or losses
6. Estate planning
No matter how far away you are from retirement, estate planning belongs in your financial picture. It can give you more peace of mind in retirement and helps take care of your loved ones after you pass away.
Effective estate planning includes:
- Keeping beneficiary information updated
- Having a will in writing
- Knowing what happens to your assets and retirement accounts when you pass away
- Knowing if annuities and trusts should be part of your investment strategy
What it takes to be your financial advisor
You don’t have to be a finance expert to be your own advisor. Here are the main qualities you need to have.
Comfort with numbers and financial decision-making
You need to be comfortable looking at numbers, interpreting them, and making decisions based on what they tell you. If you can read and understand a bank or credit card statement, you’re halfway there. The next step is taking those numbers and using them to craft a budget, emergency fund, and investment strategy.
Discipline to stay consistent
Saving money is a gradual process, so the DIY approach rewards consistency. If you set up automatic transfers to your savings account and annuities, or opt in for payroll deductions funneled to your 401(k), you’re more likely to stick to your plan. The National Bureau of Economic Research found that automatic 401(k) enrollment increases long-term savings rates by about 0.6%.
Willingness to learn and keep up with financial news
Being your own financial advisor requires a willingness to learn new skills and use available resources. It takes curiosity and drive to understand and influence what impacts your personal finance, including:
- How retirement accounts work
- How taxes apply to investments
- How to assess your risk tolerance
- How financial products fit into your plan
Ability to handle market volatility without emotional decision-making
A financial advisor often talks investors down when the market drops or crashes. If you want to manage your own money, you need to maintain an even keel. Don’t chase returns in spiking markets or sell everything during a downturn. A calm, informed approach helps you avoid snap judgment and emotional decisions that can damage your financial plans and savings.
When to get help from a financial advisor
In some situations, you will need financial advice from a professional. Say you have a complex estate with numerous beneficiaries that could trigger tax implications and legal issues. A tax professional or financial advisor helps you structure wills, trusts, and inheritances properly.
The same applies if you own a business. Small business owners may struggle to identify tax deductions and separate personal wealth from commercial assets. These details may seem small, but they can cost people thousands of dollars over time.
Professional advice fits into a DIY approach — they’re not mutually exclusive. You can manage some savings and investments personally and hand over complicated aspects to a financial advisor.
Using annuities as part of your DIY financial plan
Gainbridge Retirement Flex Account℠ fits naturally into a self-directed retirement plan. You can open an account with $100 and add more later without a new application or jeopardizing your fixed rate. Money in a Target Date Pool earns a guaranteed rate for a term you choose, 1 to 10 years in most states, and money in the Cash Wallet earns a variable rate and is not subject to withdrawal charges or market value adjustments. Your account grows tax-deferred and can hold qualified money with an IRA endorsement. There are no hidden fees or commissions; withdrawals from a Target Date Pool above the free withdrawal amount may be subject to a withdrawal charge and a market value adjustment, and a 10% federal tax penalty may apply to withdrawals before age 59½. Guarantees are subject to the claims-paying ability of the issuing insurance company.
Take control of your financial future.
This article is intended for informational purposes only. It is not intended to provide, and should not be interpreted as, individualized investment, legal, or tax advice. The Gainbridge® digital platform provides informational and educational resources intended only for self-directed purposes.
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