When You Should and Shouldn’t Pay Someone to Do Your Financial Tasks

Few things cause worry in life like a large undone financial task. The big stack of tax documents. The unwritten will. The investment statements that you need to do something about. These things fall into that category of “important but not urgent” things that fill the background of our lives — you don’t have to get them done today or tomorrow, but they need to get done and there’s risk — and sometimes financial loss — if you wait. 

For most financial tasks, there’s another option: you can just hire someone to do the heavy lifting for you. Someone can do your taxes, manage your investment accounts or write your will. Of course, going that route comes with financial costs and, in some cases, other risks as well.

When is it the right time to delegate a financial task to someone else? 

In this article

    5 questions to ask yourself about financial tasks

    Before deciding whether you should delegate a financial task to an expert, consider these questions.

    Do you have enough knowledge about the task?

    Is this something you already know how to do and are just putting off because of the effort involved? Or is it something that’s going to require a lot of learning to be able to do well? 

    [ Read: 6 Times to Hire a Financial Planner ]

    For example, a task like filing your taxes doesn’t require much knowledge, as a program like TurboTax makes it easy to file your taxes. On the other hand, making an accurate investment decision may require learning quite a bit about investing before you even attempt the task.

    A knowledge gap is a good reason to hire someone for a task. Just make sure that you understand enough about the topic at hand to understand the basics of the service and how to make sure the results are good.

    Are there tools available that make the task easy?

    Can you do this task easily using tools that are already available to you? For example, is there a widely available software package or a website you can use that will handle most of the work of this task?

    Taxes are a great example of a situation wherein, for most people, software can just handle the problem. For the vast majority of people, tax filing software is less expensive and often more convenient than taking your taxes to a specialist. Similarly, having a basic will made through a site like LegalZoom is likely less expensive and more convenient than talking to a lawyer about it.

    Where this falls apart is if your task is complex or unusual. If you have unusual elements with your taxes, such as a mix of self-employment and regular income or unusual investments or assets, a tax specialist might be a better choice. Similarly, if you’re trying to write an unusual will or other estate documents, talking to a lawyer might be the right call.

    Is this a repetitive task, or a one-time thing?

    Is this a task that you will likely only have to do once or twice over the course of your life? Or is this something that pops up regularly?

    If this is a rare occurrence, hiring a specialist makes sense, particularly if you do not feel this is a task that you’re equipped to handle yourself. If you want to set up a long-term investment plan or write a will that should remain unchanged for a long time or you have a one-time strange tax situation, a specialist is a great option.

    [ Next: The 4 Best Investment Apps ]

    On the other hand, if you’re looking at a task that will pop up again and again, such as filing ordinary income tax returns or rebalancing your investments, knowing how to handle it yourself will pay off greatly over the long run. You’ll learn what you need to know to manage the task yourself and it becomes something you can do in the evening every once in a while as needed.

    Will you hold yourself accountable if you don’t have someone to do the task?

    Accountability is a major consideration whenever you find yourself putting off tasks. Are you really holding yourself accountable for getting it done?

    If you find that you’re putting off the task so much that it’s costing you due to late fees or simply adding more risk to your life, you should strongly consider hiring someone to do it, which reduces a larger task to a simple one and makes someone else accountable.

    If you’re just a mild procrastinator and will get the task done before it’s actually due, then accountability is a much less important concern and shouldn’t be the sole reason for hiring someone.

    Do you know where you stand financially?

    A final question to consider is your financial state. Can you easily afford to hire someone to handle this task? Is your financial state clear?

    If the cost of hiring someone for the task is a financial burden in and of itself, there is additional value in simply figuring it out for yourself, as it doesn’t negatively impact your financial state.

    When should you pay to delegate a financial task?

    With these questions, you can quickly decide whether to delegate a financial task or not. Here are four sure signs that you should delegate that financial task

    When it’s complex and is unlikely to repeat

    The more complex a task is — particularly if it’s a one-time or rare task — the more you should lean toward hiring an expert for the project. The knowledge and skills needed to handle a complex task, particularly if it’s not a task you’ll come back to again, are traits that are worth hiring.

    [ See: 6 Common Tax Misunderstandings, Explained ]

    When you don’t have access to tools that make the task easy

    Some financial tasks have tools that make the process simple, like tax preparation and basic legal documents. However, other financial tasks aren’t quite so clear-cut, like creating an investment plan for yourself. If there is software available that can do most of the heavy lifting for you, it’s typically a less expensive and more flexible option.

    When it is a life-changing decision

    If you’re making a decision that could change the direction of your life, or creating a plan that could influence that decision, having an expert to at least review your plan is a good idea. For example, if you’re charting out a financial plan for retirement, it’s not a bad idea to have a fee-based financial advisor take a look at it unless you’re very confident in your plan.

    When it is overly time-consuming

    Some tasks are simply much faster for an expert to handle than for you to handle yourself. It might be simple work, but if it would take you many hours to complete as opposed to handing it to someone else for a small fee, it’s probably worth it. Your time has value. However, if it is a repeated task, there is a lot of value in teaching yourself what is needed to do the task efficiently yourself going forward, such as filing your taxes if they’re simple.

    We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

    Trent Hamm

    Founder & Columnist

    Trent Hamm founded The Simple Dollar in 2006 and still writes a daily column on personal finance. He’s the author of three books published by Simon & Schuster and Financial Times Press, has contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and his financial advice has been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.

    Reviewed by

    • Courtney Mihocik
      Courtney Mihocik
      Loans Editor

      Courtney Mihocik is an editor at The Simple Dollar who specializes in personal loans, student loans, auto loans, and debt consolidation loans. She is a former writer and contributing editor to Interest.com, PersonalLoans.org, and elsewhere.