Financial Coaching: How It Works and Who Should Get It

What is a financial coach and how is it any different than a financial advisor? In this post, we’ll break it down. Then we’ll cover who should get financial coaching and how it works.

Spoiler, I don’t think coaching is for everyone. I don’t even think it’s for everyone who has financial problems.

Financial Advisor

  • A financial advisor is someone that you generally think of for long term financial help. They can help you with wills, estate planning, investing, long term care, and asset allocation.
  • Financial advisors have to pass a test and are licensed, usually under the letters CFP or Certified Financial Planner.
  • Financial advisors generally get paid commission based on the products they sell or a fixed percentage of the assets they manage. Some charge a fixed hourly rate.

Financial Coach

  • A financial coach will work with you on what I call the nitty gritty of personal finance. A coach will help you create an effective budget, pay down debt, deal with collectors, avoid bankruptcy, prepare for kids’ college, begin saving for retirement.
  • Financial coaches don’t need a license because they don’t sell financial products.
  • Financial coaches just get paid a fixed rate per coaching session. 

Now, these differences are fairly standard. Some coaches and advisors do more, some do less. 

Why Would You Ever Need a Financial Coach? 

I’ve got 6 reasons why financial coaching may be for you.

1. You need a person not attached to your situation who can help clarify your next steps. 

Money is incredibly personal. Well, money isn’t personal, but decisions involving money are personal. And unfortunately, that means these decisions can heighten emotion. Paying off debt, personal. Buying a home, personal.

When personal and emotional mixes with finances, it can get messy quickly. I’ve been coaching someone who is in a difficult, personal situation. In the two sessions I’ve had with him, I can tell he’s in a very emotional place. This individual reached out because they knew they needed someone with an outside perspective to help them with their financial priorities. 

A financial coach can speak into your situation with an objective viewpoint while still understanding the emotions involved.

2. You have debt and it feels like no progress is being made with it 

Credit cards, student loans, personal loans, Helocs, they all take away from your income. Sometimes it feels like no progress is being made, especially when there’s barely enough cash to live on, let alone make extra payments on debts.

A financial coach can help you find ways to not only make progress on your debts, but pay them off and become financially free of payments forever. 

3. You are confused about priorities of finances. 

Should you pay off debt first and if so, which debt is more important? Or is it better to save for retirement so your money has as long as possible to grow? Is now the right time to buy a house or should you wait? 

A financial coach can help you find the priorities with your money by listening and understanding your situation.

4. You’ve got no budget and need help making one that will be effective for you

You’ve tried a budget in the past and it just hasn’t worked. You know it’s important but you don’t know how to make it effective for you!

A financial coach can help you make a budget that makes sense for you and is simple to follow.

5. You have a working budget and want to make it better

Maybe you have a working budget but you need help tightening it up so that you can make progress towards your goals more quickly. 

A financial coach can help you with that. 

6. You need help clarifying your goals and comparing to where you’re at. 

If you know where you want to be in the future, sometimes you just need someone to help you with the steps to get there. A financial coach can help you clarify those goals and help you walk through the steps to achieve your financial dreams. 

So How Does Financial Coaching Work?

Let me walk you through it. 

First, we would have a consultation where we would determine if financial coaching is right for you. You may think that I’m trying to get as many people as possible to get financial coaching but I’m not. Though I think it’s beneficial, some people don’t need it. Even more-so, it’s just not right for everyone. 

If you aren’t willing to commit to making drastic changes in your life to accomplish a goal and free yourself of financial problems, financial coaching isn’t for you. The consultation is a time to determine if it makes sense for you. This consultation is completely free. Normally this is just a phone call or a virtual meeting.

In it, we talk about your hopes and dreams and your current financial situation.  If I think you’re reading for coaching and if you would like to move forward with it, we set up our first session. 

Second, I’ll send you a form called the “financial snapshot.” 

This one page form is designed so that you can help me understand your numbers. Income, debts, savings, housing as well as your personal priorities when it comes to money. 

Then we have our first session. 

We’ll talk about your financial struggles, your financial successes, as well as hurdles you’re experiencing with your current goals. My job as a financial coach is to fully understand where you’re at with money so this is a chance for you to lay it out and for me to listen. 

We’ll get into your numbers and talk specifics based on your situation. 

And from there, we develop a plan together with action steps that will help you reach your goals. 

How long does coaching last?

Some people need only a couple sessions, some want coaching on an ongoing basis. It’s up to you how long you’d like to continue with coaching. I’ve had 2 sessions with one individual and they just signed up for 3 more. 

Financial coaching isn’t for everyone 

You have to be vulnerable and honest. I get it, that’s not easy! But consider this, what do you have to lose by not getting a coach? 

  • What if debt continues to suffocate you slowly?
  • What if you’re never afforded the freedom to spend the time you want with your family now or in retirement? 
  • What if you never gain financial peace?
  • What if all your future needs is some accountability to get you there? 

Financial coaching can help you with these.

Your Future

Just imagine a future where you have no worries about your money. Where you have no debts and no payments. Where you can give to whoever and whatever you want. A future where retirement isn’t filled with money problems.

I’ve been trained as a financial coach, my wife and I have no debt aside from a mortgage, and we’ve been successfully budgeting for almost 4 years.

I have a very non judgmental approach to coaching. No one’s money is perfect. I’m just here to provide hope in tough situations.

Let’s Talk!

If any of this resonates with you, set up a free consultation with me so that I can understand your situation. No commitment is required at all.

And from there, we can determine if coaching is right for you.

And so I’ll pass this question onto you, is talking money with others awkward for you? I’d love to hear from you in the comments down below!

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