When Should You Hire a Financial Coach?

Laurie Blank is a blogger, freelance writer, and mother of four. She’s psyched about teaching others how to budget well and create passive income sources like she’s done, so they can live the dream too. 

Hiring a Financial Coach

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Would you like to do a better job of managing your money?  Are you interested in building more wealth but aren’t sure where to start?

These are just two of many reasons you might want to consider whether to hire a financial coach or money coach.  However, financial coaching services aren’t for everyone. Read on and we’ll tell you exactly what a financial coach can--and can’t--do for you.

Knowing the true purposes of a financial coach will help you decide whether hiring one is right for you.

What Is A Financial Coach?

A financial coach is to your money what a personal trainer is to your physical health. It’s easy to confuse a financial advisor with a financial coach, but in reality, they are two different things.

A financial advisor is a licensed individual that helps you select, buy and manage financial investments. The main goal of a financial advisor is to help you (hopefully) grow your wealth via investing.

Contrarily, a financial coach helps you create a solid foundation with which to invest and grow your money.
Financial coaches tend to have Financial Industry Regulatory Authority (FINRA) licenses - and often have backgrounds in Certified Financial Planning and other professional arenas, but they do not have to be licensed. 

Conversely, financial advisors must be licensed. A financial coach won’t advise you on what to invest in, but they may give you ideas during financial counseling to ponder regarding investing.

Also, a financial coach won’t sell investments to you like a financial advisor will do. Instead, financial coaches help you focus on money moves such as:

  • Determining what your financial goals are
  • Creating a budget that works for your individual situation
  • Helping you identify which expenditures are important to you and which aren’t (i.e. value-based spending)
  • Helping you overcome financial bumps in the road
  • Supporting you and helping you stay accountable as you work toward your financial goals

Much like a personal trainer helps you design, implement and carry out a workout plan for your physical needs, a financial coach helps you design, implement and carry out a plan for your financial needs and goals.

Main Benefits Of A Financial Coach

There are several benefits to hiring a financial coach.  Here are some of the main benefits a money coach can provide.

Creating a Roadmap For Your Money

One of the most valuable benefits of a financial coach is that they’ll help you create a roadmap for your money. And in order to do that, they’ll help you figure out what you want from your money.

What are your financial goals? “To have more money” is a common answer.  However, in order to have more money, you need to answer a few questions about why you want more money.

Creating a financial plan can be a comprehensive job. Having an experienced financial coach help you wade through the whys and hows of your financial planning can be helpful.

They can help you lower your monthly bills so you have more money to achieve your dreams with. Then they can show you how to allocate that additional money toward your dreams and goals.

Manage Day-to-Day Money/Life Bumps

Managing money rarely comes without detours and roadblocks. You make a financial plan and then the car dies.  Or the furnace breaks.  

Or you get an opportunity to go on a fabulous (and much needed) vacation.  Suddenly your savings become a quickly-disappearing emergency fund.

A money coach can help you figure out how to reach your financial dreams while still living life and dealing with those financial detours.

Keeping You Motivated & On Track

Another very important benefit of a money coach is that they’ll help you stay on track with your financial goals. And they’ll help guide you back on track if you wander off course.

Much like your personal trainer will help you get 10 more sit-ups in or run that extra quarter-mile when you think you’re done, your financial coach will help you save that extra $100 and trim your budget.

To sum it up, your financial coach is your money BFF: the one who will help you make a plan for your money and won’t let you quit until you’ve reached your financial finish line.

Who Should Hire A Financial Coach?

As I mentioned earlier, money coaching services aren’t for everyone.  Here are some reasons you might want to think about hiring a money coach.

You’re Ready To Get Your Finances Together But Aren’t Sure How/Where To Start

Financial coaches are great for people who are ready to get their financial life together. Maybe you’re tired of letting your money (and your circumstances) lead you around by the nose.

You see others doing well financially and wonder why you can’t do the same. A financial coach can help you figure out where to start and how to get where you want to go from a financial standpoint.

You’re Just Coming Off Of A Major Life Change

Major life changes can be a major hindrance to your financial situation. Or a major blessing.  Some of the major life changes that can put your money at risk (or reward) are:

  • Job changes such as layoffs or moves to different companies
  • Graduating from college
  • Moving out on your own for the first time
  • Getting married
  • Having children
  • Becoming an empty nester
  • Getting divorced
  • A death in the family

Some life changes are good. Some are bad. Both good and bad life changes can warrant a re-assessment of how you manage your money.

A good money coach can help you navigate through these life changes and remodel how you manage your money.

You Want A Personalized Money Plan For Your Individual Situation

There are hundreds of books and courses out there for learning how to manage your money. A lot of them offer great resources that can teach you the basics of money management.

However, most missing one key component: personalization. A money coach will talk with you regularly as you develop and manage your personalized financial plan.

Everything about your financial situation is individual to your life, wants and needs.  For this reason, a personal financial coach can be extremely beneficial in helping you get the most out of your money--in the way that works best for you.

You’re Sick And Tired Of Living Paycheck-to-Paycheck

Some studies show that as much as 78% of Americans live paycheck-to-paycheck. If you’ve been there or are there (I have too), you’ll know that frankly, it sucks.

It’s a stressful and exhausting feeling to be one small step ahead of your bills. A money coach can help you put some distance between yourself and your financial responsibilities.

They can help you create a plan that ensures you’ve got some much-needed breathing room in between paychecks.

Wouldn’t that be nice?

You Need To Know What You Need For Retirement And How To Get It

Are you behind on retirement savings?  Maybe you haven’t started saving for retirement yet. Or you just don’t know if you’re saving enough.  

Maybe you just want to find ways to save more.  A financial coach can help you find more money in your budget to save for retirement.

There are simple, small steps you can take right now to increase your retirement savings in a big way.  A money coach can show you what those steps are and guide you as you implement them.

You’re Interested In Achieving FIRE

Have you heard of the FIRE movement?  FIRE stands for Financial Independence, Retire Early. People from all types of backgrounds and financial situations are achieving FIRE, and you can too.

However, I’m betting you’ll get to FIRE faster if you have a financial coach helping you create and carry out a plan.  The wisdom and accountability that comes with money coaching can make a world of difference in how your FIRE financial picture looks a year from now.

You Want Support And Accountability From People Who Know Money

One key to cleaning up your finances and giving your money goals a power-packed boost is having support and accountability.  As the old saying goes, you are the sum of the five people you spend the most time with.

If your main influences are people that aren’t great with money, there’s a good chance you’ll more easily fall into bad money management habits.

However, if you have support and accountability from people who are smart with money, it will be easier for you to make smarter money decisions.

Maybe you don’t have any good money mentors in your life. Or you simply don’t want to share your financial doings with those close to you.

If that’s the case, a personal finance coach may be the perfect source of support and accountability for you.

You’ve Tried Personal Finance Systems On Your Own and You’re Still Not Reaching Your Financial Dreams

Money management is hard. More specifically, discipline in money management is hard. Have you read the books, tried better money management on your own and failed?

Maybe it’s not your fault. Maybe you just need more hands-on guidance and accountability. Or, maybe you need a personal finance blueprint that’s designed for your specific situation.

A financial coach can help you with all of those things. Well, now you know what types of people in what types of situations should consider hiring a financial coach.

Are there any situations in which you shouldn’t hire a financial coach?  Here are a few.

Who Doesn’t Need A Financial Coach?

As with anything, financial coaching services aren’t for everybody. If you’re in one of the following situations, a financial coach may not be for you.

You’re Reaching Your Financial Goals On Your Own

Are you reaching your money goals on your own? And are you reaching them as fast as you want to reach them?  If so, a money coach might be a waste of time.

There’s not much sense in paying for services that you don’t need if your financial literacy is already solid.  However, if you want to achieve your goals faster, you might benefit from financial coaching.

You’re Not Ready To Change Your Money Habits

This is a big one. Seeing financial change in your life requires changing your mindset. You’ve got to be convinced that you’ve been managing your money differently than you need to.

And you’ve got to be convinced that you can change your ways. From there, you’ve got to be committed to following through with the changes you and your financial coach draft up.

This isn’t always an easy task. Breaking long-held money management habits takes discipline.  Forming new habits with your personal finances takes discipline.

Riding the waves of unexpected expenses and occasional wayward spending isn’t for the faint of heart.  If you’re not truly ready for a financial change in your life, a financial coach might be a waste of time.

However, if you’re honestly ready for more healthy financial habits, financial coaching can help you get there faster.

Your Spouse Isn’t On Board

Are you married and have joint finances with your spouse? Is your spouse as ready to make a financial change as you are? If so, great!

Get your money coach and get moving toward a better financial future. If your spouse isn’t ready to change your financial situation, a money coach won’t be much help.

Try helping your spouse envision a more financially secure future before you get a financial coach.

How To Find A Good Financial Coach

So, you’re ready!  You’ve waded through the pros and cons and have decided a financial coach is just what you need to get your money growing.

How do you find a good financial coach?  Well, you can ask for recommendations from family and friends who have used financial coaching services.  

Or you can search online for trusted financial coaching services.  As you can see, a good financial coach can be well worth the money spent for people willing to follow the guidance given and make a better financial life for themselves.

Final Thoughts

Although a financial coach may not be for everyone, people who are ready and willing to make financial changes can benefit from having one.

A financial coach can provide you with the accountability and support you need to make big strides toward financial wellness.  Have you ever considered using a financial coach? Or have you used one?

Laurie Blank is a blogger, freelance writer, and mother of four. She’s psyched about teaching others how to budget well and create passive income sources like she’s done, so they can live the dream too. 

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