What Exactly Are Financial Coaching Services?
What makes a good coach? Somebody that is willing to help provide support and accountability in any given area of your life. This kind of relationship could benefit anybody greatly in any number of areas but this is even more true when it comes to the area of budget coaching. Handling the financial health of your business, after all, can be tricky. It’s a combination of a lot of things like emotions, experiences, and good old fashioned education. However, there are also a lot of blind spots when it comes to money and finances. Most people have no idea if we’re making the right monetary choices and nor do they give it much thought. And even if we feel certain that we’re not making the correct financial decisions, there is more bad news. There is not always a clear way to get back on track or even know what questions to ask in order to get back on track.
This is where something called a financial coach can help greatly. Part-expert, part-cheerleader, part-accountability partner, a financial coach can help you build up your bank account, streamline your strategies. and make your business run much more efficiently when it comes to the finance side of things.
So what is the definition a financial coaching?
Financial coaching is a specialized type of coaching that helps business owners develop both financial literacy and strategy along with some basic (as well as more advanced) money management skills. This is slightly different than financial advisors. A financial coach may be able to do things like help you learn to create a better budget, talk to your partner about money, or even help you unpack some subconscious beliefs that are affecting your spending habits.
What does a financial coach do exactly?
A financial coach is a male or female who is trained (and trusted) to look at your business finances and then identify opportunities in which to better manage your money. Instead of making financial decisions for you, this person will focus more on teaching you the money management skills you need to become more confident in reaching your financial goals on your own.
Even though most of your conversations with a financial coach will likely revolve around money, that might not be all you talk about. Your coach might want to look at the attitudes you have around money. They may ask what your financial situation was like growing up, your goals for the future, or how you communicate about money with your partner.
Are financial coaches the same as financial advisors?
This is actually a very common question but unlike a financial advisor, there are no official licensing requirements to become a financial coach. Anybody can offer what they consider to be financial coaching. However, most reputable financial coaches usually have at least a decent amount of training in the area of finance. He or she may have professional licenses, a degree, or even years of experience in the financial industry. Some will choose to get accredited through an independent agency, such as the AFCPE (or otherwise known as the Association for Financial Counseling and Planning Education).
The Financial Industry Regulatory Authority (FINRA) and state/federal governments restrict the use of certain titles, like ‘certified financial planner’ or ‘investment advisor.’ One specific difference between the two is that Financial advisors are typically employed in their role and most times they will hold a degree in finance. This is unlike financial coaches, who provide advice and coaching usually on a consulting basis. Financial advisors on the other hand, are usually employed with a certain company or organization. While they might charge for advice or planning services, they often make the bulk of their fees from the sale of financial products.
Because of the nature of their work (and the high fees often associated with in-person financial planning), this can be very costly. You usually need to have a net worth of over $250,000 in order to work with a financial advisor.
What does a financial coach do (and not do)?
This one seems pretty straight forward. If financial advisors advise and financial planners plan, then what, pray tell, do financial coaches do The answer is a little bit of everything. Financial coaches take a slightly different view of your financial situation. From there, the coaching sessions are often custom created with your specific company goals in mind.
Goals of financial coaching services:
- Determine your financial goals and create a plan to achieve them
- Pay off debt, like business loans or credit cards
- Learn about business finance and how to make good money decisions with company funds
- Raise your credit score for future financial goals
- Learn what stage of retirement planning you’re in and ensure that you’re on the right path for a financially stable retirement
- Build an emergency fund for a rainy day or in case you experience a lull in sales
- Understand different financial products and which ones make the most sense for you
- Drive behavior change by understanding how your money habits and financial life affects other areas of your life
How to find a financial coach
If you make the decision to work with an independently certified financial counselor, the AFCPE’s website would be a good place to start. This organization maintains a listing of people who have earned either the Accredited Financial Counselor or Financial Fitness Coach designation. One good way to find a financial coach is to ask around. If your friends and family are currently working with someone they love, they’ll be more than happy to give you a referral. If you don’t know anyone, you might be able to reach out to local businesses or investment clubs to see who they know. You can see our top recommendation at the end of this article.
If your intent is to purchase a specific financial product, like life insurance or a retirement plan, people that market these products can also give great advice as well. Even if these employees specialize in one area or work with a particular company, they often have a good understanding of how a lot of different financial products can work together.
Let’s get one thing clear here. There is no one size fits all. Financial coaching is a very specialized type of coaching specifically tailored to each client’s individual situation and needs. These professionals can be thought of as a composition of traditional life coaches and financial advisors. While they can and probably will give specific financial advice, they can also help you improve your overall financial wellness of your company as well. Financial coaching services often include creating a spending plan (or budget), understanding your cash flow, and paying off credit card debt. Unlike traditional financial advisors, these financial coaches will help their clients understand how attitudes and beliefs affect their overall financial situation and how to make that work in their favor instead of against it.
These are just a few facts about financial coaches and financial coaching services. Hopefully you found these helpful. If you would like to learn even more about how you can streamline the efficiency of your business finances, then you are more than welcome to contact us and we will take a look at your unique situation and offer some sensible solutions that would work best for you!
“TITAN Financial Pros provide an informational service only and are not responsible for any investments made applying this information. The results described are not distinctive and are not guarantees of future income. Any assumption contains risk and is 100% the responsibility of the individual to assess the risks/rewards involved. We bear no liability assumed or implied for your application of the information shared from this content. This information is for educational and entertainment purposes only.”
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