Financial coaching provides you access to a financial expert that can help you set financial goals and achieve them in the most efficient manner.
Financial coaching will help you identify the lifestyle you want for yourself and your family. A financial coach will help you with the basics of money management and guide you in making smart financial moves and wise financial decisions.
Financial coaching vs counselling
Financial coaching allows a financial coach to have a one-on-one session with clients to ‘coach’ performance improvements to meet goals mutually set by the coach and client.
Coaching is different from counselling because some of the coaches are not experts, but instead, they provide encouragement, monitoring and advice and do so in a process largely driven by the client.
The purpose of financial coaching
Financial coaching is not designed to be therapeutic or manage a financial crisis. Instead, it is suited to asset building programs because clients often need encouragement and support to adhere to positive financial behaviours.
Coaching provides a much-needed boost to self-control along with the flexibility to change strategies as the client’s financial situation changes. Financial coaching focuses on ongoing behaviour change, strategy development, goal setting and goal monitoring.
The reason you need a financial coach
Although a study shows that women seek out financial advice less than men do, at some stage in life everybody needs a financial coach. You may reach out to a financial coach when you are overwhelmed by your finances and you don’t have enough assets to make a considerable difference to your investment portfolio. A financial coach will help you get out of your financial rut by advising and monitoring you.
The duties of a financial coach
A financial coach is a good listener, who does not judge but always tries to look for a positive thing in all your mistakes. Most importantly, a financial coach should be someone who understands money and how to make your money grow and work for you.
A financial coach should be able to:
- Identify resources, tools, and services that client’s can use to improve their finances
- Develop financial goals and strategies to achieve goals
- Monitor client progress
- Make referrals as needed
- Develop an action plan that changes as the client’s situation changes
The goals of a financial coach
When you are a financial coach, you dedicate your time and energy to help someone else reach their financial goals. When you dedicate your time, you are hoping to achieve the following:
- Support specific actions to meet goals
- Improve financial situations
- Change financial behaviours
- Facilitate decision-making
- Provide tools, resources, and referrals
- Achieve client-defined goals
- Address immediate issues
Financial coaching focus areas
Being financially coached is not a waste of time and energy. It is everything that an individual needs to get to the next level financially. Being financially coached will change your life for the better. You will acquire financial skills that will help you in the long run.
Financial coaching will:
- It improves long-term financial behaviour
- A financially coached client can practise new behaviours that will offer life-long financial success
- Financial coaching helps clients to set and achieve financial goals largely on their own
- It targets clients with a minimum level of financial skills and experience
The benefits of working with a financial coach
When you reach out to a financial coach, you are hoping of acquiring better skills and resources to improve your financial status. A financial coach will instill confidence in creating your future.
Secondly, you will be taught the skill of managing your finances better. Unlike having a financial planner that will tell you what to do, a coach works in changing the way you think and act for life.
The advantages of financial coaching
A financial coach is hired to assist you in getting your finances sorted.
Here are the advantages of having one:
- Financial coaches teach you healthy habits - when you do not have time to organize your finances, you will realize that you have some unhealthy financial habits, but a financial coach will guide you to the right track and helps to keep you accountable.
- Clients don’t lose control of their finances, they gain them - a financial coach will help you manage your budget daily and uses their financial expertise to get your finances on track.
- Financial coaching services provide peace of mind - when you are financially coached, you worry less about due dates and making repayments. Your coach will make sure you have money set aside for every expense. The bills will be paid on time, every time. And your budget will be optimized, for you to work towards your financial goals.
- Clients stop living week-to-week and start living their dreams - when you have a financial coach you forget focusing on bills and expenses and start looking towards the bigger picture. It will help you stop counting your pennies and start focusing on your financial goals.
- It saves people time, and money - a financial coach will help you improve how you handle your finances without paying a lot of money. You will improve your cash flow, reduce expenses, pay off or consolidate your debts and ultimately, save money.
Steps on how to become a financial coach
If your finances do not need a coach, but you are interested in coaching someone else, you can follow these proven steps to make your financial coaching enterprise a success!
#1) Training & certification
Being a financial coach requires more than just gaining knowledge about personal finances. You should be well-versed in behavioural psychology, how to teach effectively, the regulations governing the industry, and coaching methodology. And these can all be learned when you take a financial coaching course.
#2) Initial experience
In financial coaching, experience counts. You will meet different clients with their emotional reactions to money, built-in habits, and financial realities.
This is the challenge that will require you to practice working directly with people to improve your abilities. Your initial coaching experience should be done under the supervision of a mentor or supervisor who has experience in the field.
#3) Use systems, processes, & resources
The foundation of becoming a financial coach is through study, coaching some initial clients, and documenting results. But you will be able to serve clients efficiently by putting essential processes, resources, and systems in place.
As a financial coach, you should have a financial coaching software that allows you to view a client’s entire financial picture in one place including bank balances, credit scores, and insurance coverage.
There are essential systems for financial coaches
- Financial review system
- Reporting software
- Client relationship management
#1) Work for an organization or start a business
Start your coaching journey. Know the path you want to follow. You can decide whether to work for someone else or start your own business. Knowing your path early helps you prepare. Regardless of how you decided to work, you should start documenting client results and building case studies.
A case study will demonstrate to others, whether your clients, clients of the organization you work for, or potential employers that you are an accomplished financial coach.
#2) Commitment to excellent service & results
Be committed to your work. A financial coach is responsible to help clients achieve their goals be this to get out of debt or build up an investment portfolio. Meaning you must help them stay focused after a financial setback and encourage them when they’re feeling positive and motivated.
#3) Have a financial coach or be the financial coach you need
Whether you want to be a financial coach, or you need financial coaching, you should be dedicated and committed to what you started. Financial management is not for everyone but financial education is.
Reading through everything that has to do with finances is such a great idea since it will give you clarity about money and how to make financially wise decisions. If you need a coach, get one and you will soon transform your finances and achieve the financial goals you’ve always dreamed of.