Demystifying money coaching: 5 ways a money coach can help you

  • financial planner

Demystifying money coaching: 5 ways a money coach can help you

For many individuals, money is a sensitive, anxiety-ridden topic . It can stir a mix of emotions, ranging from overwhelm and frustration to stress and fear. The hardest part is not knowing whom to turn to for support.

Should you speak to your financial advisor? your bank representative? Or perhaps your therapist?

Your financial advisor, bank rep and therapist can all help, to a certain extent. But there is a new breed of financial support that is now emerging:  a money coach.

Although the concept of hiring a business coach, life coach, or health coach is quite widespread, the concept of having a money coach has not reached the same level of acceptance.  I believe it’s due to a lack of awareness around the role of a money coach.

Here are 5 ways a money coach can support you on your financial journey:

1. The focus is on the day-to-day financial reality

Your financial advisor is the to-go person for investment and retirement advice. He/she closely follows the market conditions and helps you clarify your investment objectives and risk tolerance.

On the other hand, a money coach carefully analyzes your money inflows and outflows, and recommends a budget to follow. The coach’s role is to also uncover the different ways you can alter your spending in order to achieve your short-term and long-term goals. He/she monitors your financial progress by scheduling regular coaching sessions. We all know that change takes time, and this is particularly true when you are working on changing your financial habits. Therefore, regular follow-up sessions are crucial to your success.

2. Short-term goals matter

Most financial planners focus on the long term and help you with retirement planning.

However, for many people, the most pressing issues  to handle are happening next month or next year: “how do I pay off this credit card?” , or “how can I save for a small emergency fund?”.

Long-term goals and plans are important to ensure you have enough funds to sustain you during your retirement years. But short-term goals should also be given attention. A money coach will mainly focus on helping you achieve your 1-3 year goals.

3. Understand your money patterns and beliefs

A therapist can dig into your past to uncover and heal your childhood wounds. This is an essential step to release the blocks that are preventing you from living a fulfilling and happy life. However, a therapist is rarely specialized in healing financial traumas or understanding where your money beliefs and patterns originate from.

When it comes to answering questions such as “Who am I with money?” or “why do I behave like that with my money?”, a money coach is in the best position to help you.(It is important to note that not all money coaches are qualified to do such work, therefore it is important for you to inquire about their qualifications beforehand.) 

Understanding yourself from a money perspective will make changing your financial habits a much easier task. You won’t be counting on your will power anymore. Your self-awareness and your knowledge of your own money psyche will be the tools to use to create lasting change.

4. No financial products to sell

Bank representatives are mainly there to sell the bank’s products, which range from bank accounts to loans, line of credits and mortgages. Financial planners sell a wide range of investment and insurance products such as mutual funds, stocks and life insurance policies. They are not meant to be experts in budgeting and they are not there to understand what kind of a spender you are before they propose a certain financial product. This task is usually left up to you.

This is where a money coach can help you identify if you can really afford a certain amount of mortgage or how to break the cycle of using your line of credit every time an emergency comes up.

5. Getting on the same financial page as your partner

Having financial issues can often lead to tension and arguments within a couple. Couple therapists can certainly help establish better communication between the partners and lay the ground for more honest conversations.

A money coach however can help partners understand each other from a money perspective. Regardless of how many years couples have been together, most of them never asked their partner “how was money handled in your household when you were growing up?”. Understanding your partner’s history with money will greatly help you understand why he feels and deals with money the way he does. A money coach can also assist couples uncover their respective values and reach a compromise on how to spend the couple’s money in a way that respects both partners values and desires.

In summary, financial planners, bank representatives, therapists and money coaches all play different roles. They all provide help and support, in their own ways.

As a money coach myself, I visit my financial planner once a year to ensure my retirement plan is on track. I contact my bank representative whenever I have a question about my bank accounts, and sometimes I consult with a therapist to maintain a healthy mind. Hence, it is perfectly natural to need all these professions simultaneously. The trick is to know which support system is the best one to help you overcome a certain financial challenge, and it’s important to remind yourself how a money coach can help you when other financial experts cannot.