Last Updated on January 18, 2024 by Lori Pace
Managing your financial well-being can be difficult. It is a mixture of emotions, experience, and good old-fashioned education. There are many blind spots when it comes to money. Many people don’t know if they are making the right decisions. Even if we are certain, we don’t always know how to get back on the right track or what questions to ask. In these case, financial coaching is a great resource. A financial coach is part-expert, part-cheerleader and part-accountability partner. They can help you build your bank account, self-trust, confidence, and peace of mind.
What Is Financial Coaching?
Coaching is a great way to get support and accountability in all areas of your life. It doesn’t matter if you’re in a relationship with someone, but it can make a big difference when it comes time to your finances.
Financial coaching is a special type of coaching that helps people improve their money management and financial literacy. A financial coach is a separate type of coaching that can help you create a budget and talk with your partner about money.
And, Who Is A Financial Coach?
A financial coach is someone who has been trained and trusted to examine your finances and find ways to improve your money management. Instead of making financial decisions for you, they will teach you money management skills that will help you feel more confident about reaching your financial goals.
Although most conversations with a financial coach will revolve around money, it might not be the only topic you discuss. Your attitude towards money might be something your coach will want to examine. Your coach might ask you questions about your financial history, future goals, and how you communicate with your partner about money.
Are Financial Coaches The Same As Financial Advisors?
Financial coaches do not need to be licensed. Anyone can provide financial coaching. Financial coaches are usually at least somewhat trained in finance. Some may hold professional licenses or a degree. Others might have years of experience working in the financial sector.
Certain titles like ‘certified financial advisor’ and ‘certified financial planner’ are not allowed by the Financial Industry Regulatory Authority (FINRA). Financial advisors typically work in this role and often have a degree or certificate in finance. Financial advisors, unlike financial coaches who offer advice and coaching services, are often associated with a company or product. Although they might charge for planning or advice, their fees are often derived from the sale of financial products.
Advice can be expensive due to the nature of their work and the high fees associated with in-person financial plans. To be able to work as a financial advisor, you must have a net worth greater than $250,000
What Does A Financial Coach Do (And Not Do)?
Financial coaches will take a holistic look at your financial situation. The coaching sessions can be tailored to meet your goals. Perhaps you want to learn more on personal (single parents) finance, pay off credit cards, or plan for retirement. Especially for single moms, when they need to survive financially with the pressure of having a baby by themselves.
Goals Of Financial Coaching:
- Create a plan to reach your financial goals.
- Repay debts like student loans and credit cards
- Learn how to make smart money decisions and what personal finance looks like
- For future financial goals such as buying a home or starting a company, raise your credit score
- Find out where you are at retirement planning and make sure you’re on the right track to a financially secure retirement.
- In the event of your job loss, create an emergency fund.
- Learn about the different types of financial products available and which one makes sense for you.
- Understanding how your financial habits and financial life impact other areas of your life can help you make behavioral changes
How To Find A Financial Coach?
Asking around is a great way to find a financial advisor. Referring to someone you love is a great way to find a financial coach. You might also be able to reach out to investment clubs or local businesses to find out if they are connected to you.
People who market these products can offer great advice if you are looking for life insurance or retirement plans. They are often knowledgeable about the workings of different financial products, regardless of whether they work in a specific area or with a company.
Trust the company and the person selling the product. It’s okay to seek advice from them. It doesn’t necessarily mean they will push any product on you just because they are selling it. I have found that anyone trying to sell you financial products actually wants you to get maximum value.
They will benefit from establishing strong relationships with you and hopefully referring to you. It’s part and parcel of their job. Financial professionals have the legal requirement to recommend products or services that are best for their clients, not them or the company.