WHAT IS A FINANCIAL OR MONEY COACH? WHY DO YOU NEED ONE?

In today’s world, mastering your personal finances is a huge part of achieving your dreams. Yet most of us don’t learn this skill in school and are left to figure out our finances through our own life experiences and searching for useful resources. 

Fortunately, a growing field of financial professionals who call themselves financial or money coaches are here to help.

Much like a sports coach, a financial coach (sometimes referred to as a money coach) works with you to increase your money skills and master them to win your own financial game.

In this article, we answer common questions about financial coaching and offer useful insights to help you decide if you should hire a financial coach and how to find the best coach for your individual needs.

What is a Financial Coach?

A financial coach is a financial professional who focuses on your day-to-day money habits like budgeting, debt, and saving to help you identify which habits need to change in order to reach your bigger goals, then supports you as your work toward that change. 

A financial coach’s role is to provide education, tools, resources, encouragement, and monitoring to help clients work toward developing positive habits and behaviors that increase their financial well-being and motivation to improve their personal finances. Financial coaching is different from the role of a financial adviser in that coaching is peer-to-peer and primarily client-driven, focusing on ongoing behavior change, attention, and goal-setting – as opposed to giving financial advice, direction, or services.

Financial coaches provide a safe and non-threatening forum for clients to answer difficult, open-ended questions about their money. The coach will evaluate the client’s current financial situation, reviewing financial records, accounts, credit history, and scores; and delve deeper into discovering the root causes of any problems. The financial coach uses active listening skills and exhibits empathy toward the client’s challenges and then points out possible solutions that may not be readily obvious to the client. The goal is to help people conduct self-directed behavior change to manage their money responsibly and effectively, in order to avoid future financial problems.

How Does Financial Coaching Work?

Most people who work with a financial coach are looking for someone to take a look at how they have been spending their money, then help them make decisions on what might need to change. Next, they’ll work with you over subsequent sessions to see what works and doesn’t work so that you can work toward your bigger goals like paying off debt and/or saving for future goals.

This usually takes several sessions and the work is typically spread out over many months, sometimes up to a year. How often you meet will depend on your needs and the coach’s specific process. Many coaches offer additional sessions on an as-needed basis once you’ve completed your package, so you can sign up when you need a boost or check-in.

Most financial coaches work with clients virtually using Zoom or Google Meet – if you desire in-person coaching, you’ll probably have to pay slightly more. Many financial coaches also offer unlimited email support throughout the time you’re working together. 

Typical Questions a Financial Coach Will Help You Answer

How Do I Create and Manage a Budget? 

This is a baseline expectation of a financial coach. Some will provide their own budgeting methods and templates, while others will work with you to find a system that works best for you based on your money personality.

The overall goal of coaching is to make you self-sufficient, so don’t be surprised if your coach expects you to complete your own budget worksheets and assignments.

Coaches know that if they do this work for you, once your work together is done you’re much more likely to return to your old ways without any long-term improvement to your finances.

What’s the Best Way for Me to Pay Off My Debt? 

This question is what often leads people to seek a financial Coach in the first place – a financial coach will help you set up a debt pay-off plan, which will include examining your budget and most likely making changes to your spending to accelerate your debt pay-off.

A coach should be able to tell you when you can expect to be debt-free if you stick to the plan you create together, along with offering you suggestions, support, and insights along the way.

Am I on Track to Achieve my Financial Goals? 

Even if you don’t specifically seek help with debt pay-off, a financial coach can help you crunch numbers toward other savings goals and then make a plan to get there. Where they’ll really add value is by showing you how certain changes to your financial behavior will get you to your goals faster.

What if I Don’t Even Know What My Financial Goals are? 

A coach will help you identify them!

How Can I Find Extra Money to Put Toward My Financial Goals? 

This really comes back to the budgeting step. A financial coach will work with you on your spending habits to find ways that fit your lifestyle to update how you spend and save money to better align with your goals.

Why Do I Have Trouble Sticking to the Spending Limits I Set for Myself? 

The psychological aspect of your money is really important to address in financial coaching for most people. A financial coach can provide you with exercises to give insights into your money mindset so that together you can discover ways to shift toward the mindset you want in order to meet your financial goals.

I Just Need Someone to Hold Me Accountable for the Goals I Set for Myself. 

Accountability is one of the best benefits of financial coaching! Just like a sports coach holds you accountable to showing up for practice, which inevitably improves your performance, a financial coach is there to keep you showing up for your money habit changes, reminding you why you’re making the change in the first place, and encouraging you when you fall off track.

Other Financial Coaching Services

Your financial coach may be able to offer additional services based on their credentials or areas of specialty. For example, you might consider hiring a financial coach who can help you:

•    Figure out if you can afford to start a business or switch careers
•    Help you make the most of your employee benefits
•    Decide which type of account to use for different goals
•    Develop a plan to save for future education expenses
•    Improve your finances with your spouse with marriage financial coaching
•    Educate you on how your retirement plan (401k, 403b, etc.) works and how to make the most of it
•    Whether or not you need life insurance and how much

How is a Financial Advisor Different from a Financial Coach?

Many financial advisors these days are incorporating aspects of financial coaching into their business, but the big difference between a financial advisor and a financial coach is that a financial advisor primarily serves as someone who provides investing advice. 

This means you typically need a certain amount of money to invest in order to work with them, and they are often paid based on the amount you invest with them.

What Can a Financial Advisor Help With that Most Financial Coaches Cannot?

•    Choosing specific funds to invest in
•    How to invest to reach your goals
•    What type of insurance policy is best for what you need
•    Any advice around investing that goes beyond educating you

What Training or Qualifications does a Financial Coach Need? 

The truth is there are no legal requirements in order for someone to call themselves a financial coach – many financial coaches are simply everyday people who found success in their own money habits and wish to share their wisdom and knowledge with others.

We recommend  NEW DAY FOR YOU FINANCIAL!

Katrina Fitten, owner of New Day For You Financial.  She is an author, speaker, and Certified Master Financial Coach. 

She and her team help others master their money mindset and money by first conquering their triggers around money, then by creating a comprehensive personal & business financial plan. Her clients have paid off over a quarter of a million dollars of debt and increased their credit score by 100+ points and have built business credit by leveraging Other People's Money (OPM) acquiring business funding to scale their business.  She volunteers at women's shelters for domestic violence teaching them money management principles.  

She is grateful for the testimonials of her clients which she shares when speaking at conferences, retreats, and women's summits around the world.    

Katrina truly believes in teaching women to find financial independence.

Her motto is, “You don’t have a money problem; you have a money mindset problem!”   When you transform your money mindset you can manifest anything and your dreams can become reality.

It is her dream to transform and empower women and their families to change the trajectory by rewriting their money story to begin living the life they dream about.

Katrina enjoys her life in the suburbs of the Atlanta, GA area, where she resides with her husband.  

You can also read more about Katrina by visiting her website www.newdayforyoufinancial.com & on Instagram @moneycoachkatrinafitten

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