The Power of Financial Coaching
Money. It’s this resource we all have access to but often have received very little instruction on how to best use it. When used well, it’s a wonderful tool to create freedom, purposeful change and opportunity. When used poorly, it can be a significant source of stress and anxiety irrespective of income levels. The day to day management of money can feel stressful, confusing and overwhelming. This is where a financial coach can help. Financial coaching is a holistic service that helps individuals to understand their relationship with money, achieve their financial goals and improve their overall financial wellbeing. In this article we will explore the benefits of financial coaching and how it can help you gain control of your finances, reduce financial stress, and achieve long-term financial success. So, whether you're struggling with debt, looking to build your savings, or simply want to develop better financial habits, read on to learn more about the power of financial coaching.
What is a financial coach?
A financial coach is a professional who provides both individuals and couples with guidance and support to improve their financial wellbeing. Financial coaches work with clients to develop a clear understanding of their financial situation, identify their goals, create a plan to achieve those goals as well as increase both their financial capabilities and confidence.
Unlike traditional financial advisors who provide personalised advice around investment strategies and retirement planning, a financial coach takes a more holistic approach looking at not only a client’s financial position but their money history and habits too.
A good financial coach will serve as a trusted advisor and accountability partner for their clients providing resources to improve their financial literacy, tools to understand and improve their money patterns, support to set inspiring financial goals, strategies to pay down debt and manage money with ease on the day to day as well as savings plans to meet those unique goals and objectives.
Financial coaches want their clients to become financially empowered so will spend time educating them on complex concepts like credit scores, investing, superannuation and provide guidance on how to make smart financial decisions that align with their values and goals.
The benefits of working with a financial coach
For those looking to improve their financial wellbeing, there are many benefits of working with a financial coach. The primary benefits include:
Clearer understanding of your finances: A financial coach can help you gain a clearer understanding of your income, expenses, debt, and overall financial situation. They can help you identify areas where you can cut costs, save money, and pay off debt more efficiently.
Setting and achieving financial goals: A financial coach can help you set realistic financial goals and develop a plan to achieve them. They can help you prioritise your goals and make a plan to achieve them, while also holding you accountable and providing support along the way.
Improved financial habits and behaviors: A financial coach can help you develop better financial habits and behaviors, such as creating a budget, tracking your spending, and building an emergency fund. They can also provide education and resources to help you improve your financial literacy and develop new skills.
Support you to navigate a life transition: A financial coach can provide support and guidance to better navigate a life transition like starting a family, leaving a long term relationship or starting a business.
Reduced financial stress and anxiety: Financial stress can take a toll on your mental health and overall well-being. Working with a financial coach can help you reduce financial stress and anxiety by providing a clear roadmap for achieving your financial goals and improving your overall financial situation.
Long-term financial success: A financial coach can help you build a solid financial foundation that will support long-term financial success. They can provide education and support around investing, home ownership and retirement planning.
Help you to build your support network: A financial coach can help you to identify who else you need to support your financial wellbeing and know what questions to ask to find the right advisors like accountants, financial planners, insurance brokers, mortgage brokers and lawyers.
How to find a financial coach
Finding a financial coach can sometimes be tricky as it’s a relatively new service that sits between self-directed financial education, financial counselling and personal financial advice with a financial planner.
Here’s some tips on how to find the right coach for you.
Do your research: Start by researching financial coaches in your area. Look for coaches who specialise in the areas you need help with, such as mindset, budgeting, debt reduction, family finance or wealth creation. Check their websites, social media profiles, and online reviews to get a sense of their experience and approach.
Ask for recommendations: Ask friends, family members, or colleagues if they have worked with a financial coach and if they would recommend them. It’s also useful to ask other professionals like your accountant, mortgage broker, or lawyer if they know of a good financial coach.
Check their credentials: Whilst there’s not a specific association for registered financial coaches (like the Financial Planning Association or Financial Counsellors Association) it is important that your coach has approriate skills and experience. Look for qualifications like a Bachelor of Finance, Diploma of Financial Planning, Certified Money Coach (CMC)®, Cert IV in Mortgage Broking or similar.
Schedule consultations: Once you have a list of potential coaches, schedule consultations to discuss your financial situation and goals. This will give you a chance to get to know the coach and ask any questions you may have before making a commitment. Most coaches will offer a free consultation or discovery call to new clients.
Consider fees: Financial coaching fees can vary widely depending on the coach's experience and services offered. Make sure you understand the coach's fees and payment structure before committing to working with them.
Trust your instincts: Ultimately, you want to work with a coach who you feel comfortable with and trust. If something doesn't feel right, trust your instincts and keep looking until you find the right coach for you.
What to expect during a financial coaching session
Every coach is unique and has their own way of providing their services. You can, however, expect that the first session with you coach will be about understanding where you are now in terms of your finances, what challenges you may be experiencing and what your personal goals are. To prepare for this session it’s a good idea to pull together an overview of your income, expenses, the things that you own (assets) and any money that you owe (liabilities).
Financial coaching is a very holistic practice looking beyond the numbers to explore and understand what money really means to you to help you create long term, sustainable financial wellbeing. Be open to delving into your personal history, your values and personal purpose.
Working with a financial coach can provide a clearer understanding of your finances, help you set and achieve financial goals, improve your financial habits and behaviours, reduce financial stress and anxiety, and ultimately lead to long-term financial success. Working with a financial coach can be a truly transformative experience. Most of us aren’t taught how to make the most out of our money. The lessons we do learn are often piecemeal and out of context leaving us feeling confused and overwhelmed. If you’re looking to take control of your money, achieve your financial goals and feel financial confident then consider working with a financial coach.
