2016: Should You Hire a Financial Planner? Plus, the Credit Score Mortgage Myth

**Farnoosh Torabi** (0:00)
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**SPEAKER_2** (0:49)
Looking for ways to save on gas or double your double coupons? Sorry, you're in the wrong place.

**Farnoosh Torabi** (1:01)
Welcome to So Money, everybody. It's Ask Farnoosh Friday. Happy last day of July. I don't know about you, but I feel like this month absolutely flew by. August is always a relaxing, fun time of year for us because we finally take a vacation, we finally take some time off work. A lot of us are trying to squeeze every last drop of summer. Some of us are already buying school supplies, looking at calendars and wondering how we're suddenly talking about Labor Day. Where ever you're listening today, whether you're out for a walk or you're driving somewhere, maybe just enjoying a few quiet minutes before the weekend officially starts, really glad you've decided to spend some time here. We've got a lot to cover. I had the opportunity this week to give a webinar that drew more than 13,000 registered attendees. Whenever I speak to a group that large, I always try to pay attention to the questions because they're often a preview of what many of us are wrestling with. And interestingly, this wasn't a webinar about investing or retirement planning. It was about, in my experience, something a lot harder, and that is how to navigate difficult conversations about money with the people we love. And so we explored things like what happens if one of you wants to retire 10 years before the other? How do you decide what to do with a financial windfall, whether that's a tax refund or an inheritance, a bonus? Should you invest it? Should you use it to save for a big goal, help your kids out? What happens when one partner has always managed the finances, but the other one wants to become more involved suddenly?
Or you're trying to choose between two financial goals that are both important, but you can only realistically prioritize one, trade-offs, right? And so it was about an hour long. It was, we covered a lot. And it reminded me of something I often say on this show, which is that money problems are very rarely just money problems, right? They're conversations about trust, about values, how we grew up, fairness. And really, a lot of the times it's our sense of security and our sense of self. Sometimes they're conversations about who earns more, who spends more, who feels responsible for making sure everything is going to be okay financially. And the spreadsheets and the numbers matter, but they're usually the easy part, in my opinion. Understanding each other and where we come from is really where the work begins. And one exercise I shared during the webinar that I want to share with you is, if you have a partner, try this this weekend. Instead of asking, how much money do we need to feel secure? Ask this, what does financial security actually mean to you? How does it feel? What does it look like? And those answers are often surprisingly different. One person could say, well, I want a year's worth of expenses in our bank account. Someone else goes, well, financial security means knowing I could walk away from my job if it's making me miserable. And you got one person who defines it as having no credit card debt. Another one saying it's helping my parents as they get older. There's no wrong answer. It's just, it's important to know the definition before you start telling your money where to go. Now, in case you missed any episodes this week, go back and take a listen. On Wednesday, we sat down with Lauren Benton, who's the general manager of BackMarket in the US. So Money has partnered with BackMarket to talk about the real cost of tech. More importantly, how we can afford it, especially if you're a family and you've got your devices, your kids' devices, as we know, Apple just raised prices on several products, and analysts expect that the iPhone is going to see a hike this fall too. So now's a really smart time to rethink how to spend on tech. That was on Wednesday. Then Monday, Freddie Smith, former actor from Days of Our Lives. I love Days of Our Lives. He joins to talk about his new book, Generation EFT. So Freddie has, since his acting career, he's moved on to talk about financial freedom. He's got a ton of people that follow him through YouTube and TikTok. And his book is really about the crisis that he sees for millennials and Gen Z. And the crisis, he says, is not really financial illiteracy. It's the wages that haven't kept pace with the actual cost of living. Housing costs, student loan costs, childcare and healthcare. We get into it. And also why he's cautiously optimistic that his generation is about to be the one that finally changes the system. All right, we're going to head to the mail back soon, but first let's turn to a few headlines from this week that I think are worth our attention. First, interest rates. The Federal Reserve wrapped up its latest meeting and as expected, left interest rates unchanged. The Fed funds rate remains in the range of three and a half to three and three quarters percent. Every time the Fed meets, I would get emails asking the same question. Does this mean mortgage rates are finally going to move? And the answer, unfortunately, isn't that straightforward. So one of the big misconceptions is that the Central Bank or the Federal Reserve directly controls mortgage rates. It doesn't. Mortgage rates tend to follow the bond market, particularly the 10-year Treasury yield and investors' expectations for inflation and economic growth. And the Fed certainly influences the broader interest rate environment, but it isn't sitting in a room deciding what your next mortgage rate will be. So the takeaway for anyone thinking about buying a home is this. If buying a home makes sense for your finances, your career, your family, and you can comfortably afford that monthly payment, don't let the hope of saving another quarter of a percentage point keep you on the sidelines indefinitely, because rates always move. By the way, refinancing is always an option. The house you wanted, however, may not still be on the market. Another story that came out this week from the corporate earnings world, Apple and Microsoft both reported their results. And while earnings reports might not sound like something we care here at So Money, it's only a Wall Street thing, it's actually kind of significant. If you have money invested in a 401k, an IRA or a low cost index fund, chances are you own shares of both of these tech giants, to the largest in the stock market. One of the biggest themes to emerge continues to be about artificial intelligence. So Microsoft in particular continues to spend billions on building AI infrastructure, while Apple is trying to integrate AI more deeply into its products and services. And there's a lot of competition and a lot of money being invested because every major tech company wants to help define what the next decade of computing looks like. So we don't have to figure out who's going to win this AI race and how to invest between Microsoft or Apple. Chances are, if you have an index fund that follows the stock market, the US stock market, you're invested in these companies. That's a good thing in the long run. It's diversified, you can participate in innovation, and you don't need to predict the future. You just have to stay invested in it. We just have to participate in the market. Then finally, the story that really made me laugh a little bit and also roll my eyes at the same time, it's out of USA Today. So apparently some landlords are beginning to experiment with something called a work from home fee.