Money. It carries far more weight in our lives than mere numbers suggest. It’s not just wages, payments, debt and investments. It also influences our dreams, aspirations, and even our peace of mind. Yet, the world of personal finance can seem to be complicated, leaving many feeling lost amidst the jargon and options.
On this journey through the world of finances, we often hear about financial advisors – experts who offer advice on investments and portfolios. But what if I told you there's a different, more holistic approach that goes beyond the numbers? Enter the realm of financial coaching.
Financial coaching is a powerful, yet often overlooked, way to transform your relationship with money. In fact, in the UK it is very uncommon! It's not just about balancing budgets or picking the right horse in the stock market; it's about personal growth, learning, empowerment, and building a more secure and fulfilling future.
In this article, we'll dive deep into the often hidden (or in the UK, completely unknown) benefits of financial coaching. We'll explore how it differs from traditional financial advising and why it might be the missing piece in your journey to financial success. Beyond the spreadsheets and graphs, we'll uncover the impact financial coaching can have on your life, helping you realise your dreams and achieve a sense of financial well-being you never thought possible.
Here are 10 hidden benefits of Financial Coaching...
1. Personalised Guidance.
Everyone’s situation is different. We have different incomes and outgoings, some people have children, hobbies, expensive partners…. the list goes on!
So by working with a financial coach, you have someone who will get to know you and your unique circumstances. Your coach will learn about who you are and what challenges you face as an individual or as a family. With this information it allows your coach to offer you support and personalised guidance to achieve your own unique goals, whatever they may be.
2. Education Focus
A good financial coach aims to educate their clients. You want to learn from your coach to ensure you gain the necessary skills to manage your finances at a high level, so that you can go achieve your goals, on your own.
A coach cannot do everything for you, in-fact, a good coach will not do anything for you directly, but they will show you how to do things for yourself, teach you why you are doing them that way in a way that you understand. If your coach is doing a good job, then the benefits of what you learn can be passed down to your children, grandchildren etc.
‘Catch a man a fish, feed him for a day. Teach a man to fish, feed him for a lifetime’. This is the focus of a good financial coach.
3. No product sales = No conflicts of interest
Financial coaches don’t sell you products. They don’t sell investments, insurances or mortgages. That is ficlients'nancial advisors. And sometimes, advisors can have conflicts of interest. They make more money selling you on a certain product, even if that product isn’t as good for you in your unique financial situation as another product.
As financial coaches don’t recommend or sell products, they don’t benefit from any one particular service, so the advice they give to clients can be 100% unbiased. This ensures clients best interests are looked out for and front and centre of everything a financial coach does.are
4. Holistic Financial Planning
By taking a holistic approach, it means taking into account all aspects of a client’s financial situation, including income, expenses, debt, savings, investments, financial goals, values, and lifestyle. Instead of addressing these elements individually, a holistic approach seeks to create an integrated financial plan that considers how each component influences the others and each person's overall financial well-being.
What works for one person and their circumstances might not work for you or someone else. By taking everything into account and seeing how all of the parts are connected, a financial coach can help you work on the ‘big picture’ of you and your family's finances in a structured manner.
5. Emotional support
Money is an emotional subject. It is very private and the number of different feelings around it can vary wildly from person to person, even within the same household!
A good financial coach will help clients discuss money, discuss their mindset with finances, help with financial anxiety or overcome fear around money they may have. Money can be a stressful thing for some people, in fact, I am sure most of us at some point or other have been stressed about the money or lack of it in the bank!
6. Behavioral Change
Financial coaching can help you to change your behavior with money. Repeating the same mistakes over and over will result in facing the same outcomes over and over. So a coach will look to challenge your behavior and seek to help you make positive changes that are in alignment with your goals.
Our behaviors can be shaped from childhood, especially around money. Seeing how your parents or other family members handled their money, and seeing things happen good and bad. These can all have a significant impact on your relationship with money as an adult. So through coaching, we would be looking to help uncover where these things come from and look to make positive behavioral changes to improve your future.
7. Goal-Centred Approach
We all have goals in life. Big ones, small ones, crazy ones! But we all have them and they help us work towards where we want to be in the future.
A financial coach will help you uncover goals that you want to achieve, ensuring that these are realistic and can be measured. Because what can be measured, can be improved! So we want goals that we can check on our progress, we can see that we are moving forward towards.
By using a goal-centred approach it allows clients to focus on what is important to them and what they want to achieve. It also helps to keep clients focused if they know what they are working towards and that the goal is important enough to want to achieve.
8. Accountability
If you want to lose some weight, you might hire a personal trainer to help you shed a few pounds, or in my case a few stones! You want to have a Pizza, it is the weekend after all! But stop, what will my PT say if I haven’t lost weight? I better not!
A financial coach is like a personal trainer for your money! I personally would encourage you to eat the pizza if you want to eat the pizza, but can it be a cheaper pizza? Could you make it yourself? A pizza that aligns with your budget and helps keep you on track towards your financial goal.
A financial coach will help keep you accountable towards your goals. Goals that you have set based on what you want to achieve. If your spending is out of alignment with your goals, then your coach will shine a light on it and ask what’s going on. Maybe your goals have changed, that’s ok, but your coach will help keep you accountable and help you figure out what the next goal is going to be.
9. Ongoing Support
Financial coaching doesn’t just stop once the sessions are over. Coaches can hold check-ins, these can be every 6 months, annually or bi-annually. A check-in to see how things are going, do we need to tighten anything up, what progress are we making towards goals, do the goals need to change, have your circumstances changed.
By staying in touch with your coach, you can ensure you stay on the correct path long term towards where you want to go, to achieve the dreams you want to achieve.
10. Empowerment
Empowerment is important for coaching. Your coach wants to empower YOU to make the changes. Make the changes long-term and have them stick.
Empowering you to take control of your finances, make informed decisions, work towards your goals and build long-term financial security for you and your family.
Personal finances can seem daunting to some people. But you can learn if you want to. A financial coach can help with that, but the main goal is to empower yourself to be able to do this for yourself and do it well long-term.