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Far too often we think that financial advisors are only responsible for managing their clients’ assets. However, in many ways financial advisors act as their clients’ “financial life coaches,” helping them improve and maintain their overall financial health. In other words, advisors not only try to maximize the return on their clients’ investments and make sure that where they invest aligns with their clients’ values, but they also help their clients manage their credit and debt because the better their clients are at doing that, the more likely it is that they will achieve their financial goals. Credit rules our economy and today, unfortunately, we are all feeling the effects of what happens when borrowing, by consumers and governments alike, is not contained. Fortunately, this is where an advisor can really help ensure that your financial life doesn’t go down the drain. For example, before an advisor undertakes any kind of asset management or financial planning on your behalf, they will examine your total financial picture to develop an exact accounting of your current use of credit and your projected future credit needs. This analysis will help you understand how far you can and should extend yourself financially so that you don’t take on more debt than you can handle.

Your advisor will also explain that getting into debt is not always a bad thing and that whether debt is “good” or “bad” depends on its nature. For example, he or she will encourage you to avoid unsecured debt as much as possible, to limit the number of credit cards you have, and to always pay off your card balances immediately—before interest begins to accumulate. (An exception would be if you had to use a credit card to cover an expensive emergency that you had no other way of paying for.) At the same time, depending on your financial situation, your advisor may encourage you to take on specific kinds of debt—a mortgage, for example. A mortgage is generally considered “good” debt because it helps you become a homeowner and is backed by brick and mortar.

If you are struggling to keep up with your financial obligations, or if you just can’t seem to save, your advisor will help you get out of debt and do a better job of managing your spending and use of credit. For example, they can suggest ways to reduce your spending, help you understand how you are using credit now and how you should be using it, and will generally help you improve and sustain your financial well being.

The bottom line: A financial advisor’s assistance and advice is invaluable. An advisor will not only help you develop a sound investment plan to finance your retirement, your children’s college educations and other costly expenses, but they will also show you how to use credit wisely so that it is a positive force in your financial life—a force that helps you achieve your short-term and long-term financial goals.

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