‘I’m stretched thin.’ I’m 23 and make $75K a year living in the Northeast. But between rent and other bills I have ‘very little’ in the bank each month. Should I hire a pro to help?

Question: I’m 23 and living in a high-cost area in Rhode Island. I make a $75,000 salary, plus monthly bonuses that will hopefully get me near six figures by the end of the year. I’ve worked full time since graduating high school and have build up my career without dipping into college debt. Other than the occasional expense, I rarely hold a credit card balance, and have been making a solid income (excluding 2020).

That said, I struggle balancing my income with my expenses. I’m stretched thin between rent, car payment, insurance, bills, and more miscellaneous expenses than I’d really like to admit, and I find myself with very little in my bank account before my next paycheck clears. In between all of these expenses, I manage to throw money into high yield savings, a robo investment account, Roth, and 401k, yet I almost feel like I’m putting too much money elsewhere. (Looking for a new financial adviser? This tool can match you to an advisor who meets your needs.)

I’m thinking I don’t really need a financial planner, as I really have a good grasp on where my money’s going, I use target date funds in my 401(k) and IRA, and I’m not really looking for investment advice. I really just need help making sure I’m not over investing, managing my budget and not making a wild money mistake in the future. I did see that there are money coaches you can hire to assist, and I think I like that idea, although I had true sticker shock when prices started having a comma in them. What do you recommend?

Answer: First of all, congrats on starting to both save and invest at such a young age, and know that it’s normal to feel uncertainty about these things. As for whether you need a pro — be it a financial adviser or money coach — to help you: That depends, and we will weigh that out for you. (Looking for a new financial adviser? This tool can match you to an advisor who meets your needs.)

Have an issue with your financial adviser or thinking about hiring one? Email [email protected].

Financial planner vs. money coach

Whether it’s a money coach or a financial planner, a good one could help answer your questions and get you on track financially. The issue is that the terms financial planner and adviser and money coach aren’t regulated, so most anyone can call themselves one — and not all of them are good.

In general, a financial planner likely will focus more on the investing advice side of things, though many can also help with boosting savings, creating a smart budget and more. “A financial planner actually does the things you say you need help with, like making sure you’re not over investing, managing your budget and making sure you’re not making a wild money mistake in the future,” says certified financial planner Philip Mock at 1522 Financial. Meanwhile, a money coach generally focuses more on helping clients understand and change their relationship with money, as well as things like budgeting, tackling debt and savings more.

All that said, you could likely benefit from either a money coach or a financial planner, if you found the right one. Should you go for the financial planner route, you may want a certified financial planner (CFP). These individuals have passed rigorous coursework on personal finance, participate in continuing education requirements every two years, and are fiduciaries who adhere to a code of ethics including acting in the client’s best interests and avoiding or disclosing conflicts of interest. (Looking for a new financial adviser? This tool can match you to an advisor who meets your needs.)

You’re probably picturing a traditional financial adviser who will charge a percentage of your assets under management. But in your case, it likely makes sense to opt for an adviser who charges you hourly or on a per-plan basis. Hourly fees tend to range from about $200-$500 an hour, and for the creation of a one-time financial plan you can follow, you might pay something like $5,000-$7,500.

Should you opt for a money coach, you may want to look for one with either the AFCPE’s Accredited Financial Counselor or Financial Fitness Coach designation; you might pay roughly $100-$350 an hour for those services.

Whoever you choose, vet the individual, and ask for references. “Be careful in selecting a professional to work with,”  says Mock. This guide offers up 15 questions you should ask any financial pro you might want to hire. And look too for a professional who has worked with individuals like you: Indeed, given your stage of life, you’ll probably want to find a planner who specializes in Gen Z and can help you navigate the issues you’ll face as you accumulate money over the next decades.

But should you do it yourself?

You can certainly take the DIY approach, and it’s the most cost effective. Start by going deep into your financial education with resources that could help you DIY your finances. These include free online courses like Finance for Everyone: Smart Tools for Decision-Making offered by Edx.org, Personal Finance 101 offered by Udemy.com, Purdue University’s self-guided Planning for a Secure Retirement course and Duke University’s Behavioral Finance Course offered through Coursera.org.

Additionally, books like “I Will Teach You To Be Rich” by Ramit Sethi, “The Simple Path to Wealth” by J.L. Collins and “The Total Money Makeover” by Dave Ramsey can also be helpful tools in understanding personal finance basics. 

However, remember this: If you don’t feel like you have the time or desire to manage your own finances, it might not go that well for you.  “Most people aren’t that interested so they don’t spend time on it and then they don’t like the results,” says certified financial planner Adam Koos at Libertas Wealth Management (Looking for a new financial adviser? This tool can match you to an advisor who meets your needs.)

Other things to know

Target date funds are not necessarily bad investments, but “just be aware that they are not always what they seem. Each fund company has a different interpretation of what the proper investment allocation is per date and some make gradual adjustments while others make abrupt changes. Generally speaking, you’re better off building your own allocation within the investment options available” says certified financial planner Joe Favorito at Landmark Wealth Management. 

What’s more, he adds: “It’s important to save in the most tax efficient way, as well as using the correct vehicles for the right goals. Asset location is an important part of financial planning, so if you’re planning on buying a home, then those dollars need to be in a more liquid account such as a high yield savings account.”

Questions edited for brevity and clarity.

Have an issue with your financial adviser or thinking about hiring one? Email [email protected].