What Is Financial Coaching?
Remember the days when the only type of coach were the ones involved in sports? We had football coaches, baseball coaches, hockey coaches and it seemed like anything with a coach involved something athletic. When most people think of a coach, dudes in athletic shorts, knee-high white socks, tennis shoes, and a whistle come to mind.
Those days are long gone and it seems like there is a coach for everything. There are life coaches, business coaches, personal trainers, writing coaches, and the list goes on and on and on. There’s are also career counselors and financial coaches, I know because this is what I do. However, since there is a coach for everything these days I’m going to break down what financial coaching is and how it can benefit you.
Financial Coaching is calling in an expert.
When your computer breaks down or software doesn’t install, you call tech support. When you feel sick, you call a doctor. Do you see the picture? When things are outside of our own know-how, we call in the expert for that topic. I didn’t spend years and years of my life in medical school to learn the ins and outs of symptoms and viruses in order to figure out what could be causing my sore throat. I find the expert and I’m okay with going to someone who knows more than I do about a topic. For some reason, budgets and finances tend to be thought of as a common-sense thing and something everybody should know.
The truth is, most of us didn’t take a finance class in high school. Most of our families didn’t talk about money and therefore we only know what we saw and whatever was normal for us. We’re not born with expertise in finance. While budgeting and finances may seem like something we should all know how to do, we don’t. It’s as simple as that. If you’re having money troubles or budget woes, it might be time to call in the expert.
Financial Coaching is for everybody.
Financial coaching isn’t for those who are only facing bankruptcy. It’s not just for those who are trying to rebuild their credit score. If you have any type of financial goal, a financial coach is for you. Do you want to pay off debt? Do you want to start a retirement fund? Do you want to have money set aside for college? 78% of Americans live paycheck to paycheck, that way of life doesn’t leave room for future planning. A financial coach is how you get from being apart of the scary statistics into financial freedom and peace. Everybody can benefit from a financial coach, whether you make $40,000/ year or $100,000/year.
Financial Coaching is about having a plan, not being told what to do.
Financial coaching gives accountability. Whether you’re in a group session with others or doing things one on one with your coach, you have built-in accountability. Most assume that the first thing a financial coach will say is to stop spending money. Odds are, they won’t. Truth is, if you aren’t spending money, bills probably aren’t being paid. There is still a money flow. You will work together with your financial coach to come up with a plan in order to reach your goals. The benefit of having a financial coach instead of talking to your best friend about finances is that your financial coach will say the hard things you need to hear. If you have a coffee habit that is wrecking your budget, your financial coach will point it out, show you how it is affecting the big picture, and help you find a way to maybe reign in the coffee habit without completely taking it away. When you get a financial coach, you are starting a partnership. Partnerships are two-sided. You aren’t hiring a dictator to micromanage you.
Financial Coaching is work. You will have to put in the effort.
As Cinderella said, a dream is a wish your heart makes. Your heart can wish for a retirement fund and for all your debt to be eliminated but just because your heart wishes it doesn’t mean it is going to happen. Food doesn’t just appear in your house from the store, you have to head out to the grocery store to fill the house with food. Dinner doesn’t make itself, you have to cook the things put everything together, follow a recipe, take steps one, two, and three. Financial coaching works the same way. You aren’t hiring someone who does all the work for you. In fact, you can have a coach who gives you all the best advice, sets you up with the best plan, and gives you the best of everything they offer. Your coach could lay out everything to set you up with a retirement fund, a college fund, wipe out your debt entirely, and pay off your house early. You could have a great ten-year plan, laid out for you by your coach. However, if you don’t follow the steps, change your habits, put the work in, you’ll find yourself in the same position in those ten years instead of where you wanted to be.
Financial Coaching is about change.
As Einstein said, insanity is doing the same thing over and over again and expecting different results. Most of us feel like that about our finances. We want to get out of debt but we don’t know how to get ahead of it. We want to start a college fund for the kids’ future but we don’t know how to start an education savings account or even how much to start putting aside. Some of us don’t even have the extra money to put in savings. A lot of us have probably looked down at January 1st and said we were going to change our finances and make things better, pay off the credit card, start the savings account. This is why New Year’s resolutions don’t really work and nobody makes them anymore. Those are all wishes or thoughts. We don’t put action behind the thoughts and ideas. That is where your financial coach comes in. Just hiring a coach or getting into a group session is a step in the right direction. If you want results, something has to change. Hiring the expert to help you is something new, a change that takes you out of the insanity cycle.
How do I know if I should work with a financial coach?
Reading this blog post is probably a good indicator. If you want to pay off your debt, a financial coach is for you. If you want to save money to buy a house or get a retirement fund started, a financial coach is for you. Financial coaches aren’t a luxury, they are a necessity when you want to stop being a financial statistic and start being financially secure. Be sure to check into group options as well as one on one coaching options.