The Major Benefits Of Getting A Financial Coach

Money might not buy happiness, but it's crucial in helping us meet our basic needs and wants. Without money, we can't afford food, clothing, and shelter. Money also gives us the freedom to pursue our dreams, such as going to college, traveling, or investing. Although we deal with money daily, it seems the concept of money is shrouded in mystery, and we're only scratching the surface. Many people's understanding of money is restricted to spending it on bills and paying off debts. However, if you master personal financial management, you will have more cash to spare and long-term financial stability. Financial literacy will help you spend with goals for today and the future in mind, pay essential expenses, save for retirement, and spend on what you want every once in a while, per Consumer Finance.

However, money handling is no piece of cake. Financial management entails having a combination of a cool head, a good grounding in economics, and experience. Otherwise, when you have a loss on your investments or face a mountain of debts, you don't know how to take corrective action and get back on track. This is when you should bring a financial coach into play. A financial coach's job is to align a client's behavior with their financial needs, helping them stick with healthy financial habits and goals, says Eben Burr from the Behavioral Investing Institute (via US News Money). Here are the major benefits of having a financial coach in your corner.

To choose the right financial coach for you, you can browse through the AFCPE's website for accredited financial counselors with expertise where you need it. Not only will you receive financial education from industry experts, but you'll also be provided with actionable steps for your unique situation. By and large, financial coaches often charge between $150 and $250 for every one-hour session, per Ramsey Solutions. Most coaches meet with their customers six to twelve times each year.

To start with, a financial coach will ask you about your financial goals and track your weekly expenses to assess your spending habits. Then, they will help you understand why you spend the way you spend before helping you create a budget, grow your savings, and manage debts. In the sessions that follow, your financial coach will review your progress, update you on the marketplace, offer relevant advice, and help you stay motivated with your financial objectives.

Unlike financial advisors who are tasked with developing specific financial strategies for your goals, financial coaches delve deeper into the psychological aspects of your finances to help you forge a healthy relationship with money. In other words, what a financial coach can offer you is financial therapy, where they address the root causes of money stress from your everyday spending and saving habits. Financial coaching helps people feel less stressed about money, get rid of self-destructive ways of thinking and habits, and formulate a responsible financial plan, per BrightUp. 

"Money is never about money — it is about emotions," financial coach Severine Bryan tells TZR. Once financial coaches take the pulse of the underlying factors that influence the way their clients perceive money, they will do a better job at coaching and motivating their clients to put a healthy spending system in place. For example, a shopping addiction can be treated with financial behavioral therapy, where shopaholics learn how to identify emotional triggers and control their impulses. Financial therapist Amanda Clayman tells TZR that financial therapy is not just for individuals but couples as well. She mentions that her clients include romantic partners, parents of adult children, as well as business partners.

According to Financial Coach, engaging the help of a financial coach helps you avoid misleading information. All too often, the media takes full advantage of our primal fears and feeds us with plenty of misinformation. As someone who has your best interest at heart, a financial coach presents you with transparent information and helps you make well-informed decisions. When you understand what affects your credit scores, misconceptions around money management, and the habits that make your money fly out of the window, you'll be able to keep budgeting mistakes and financial losses to a bare minimum.

Another thing to keep in mind is that financial coaches don't manage your money, make decisions for you, or recommend specific investments, Saundra Davis, founder of Sage Financial Solutions, tells CNN. Most financial coaches won't sell you any products or services, which might result in a conflict of interest. Instead, they may research and introduce some potential solutions that address your current situation and alert you to benefits you may not know about.

Being financially loaded doesn't necessarily equate to successful financial management. You can make a lot of money but don't know how to spend it in a responsible way. For example, you might have a big paycheck, but you don't know how to allocate it, as in how much of your gross pay goes to essentials and how much goes to personal savings and investment goals. Money handling is a learned skill. If you learn it in a more formalized structure from people with inside-baseball knowledge of finances, you will know how to spend it to your advantage, and your money confidence will grow. More importantly, you won't feel alone in the journey.

Once a financial coach has equipped you with enough knowledge and market information, you will become confident enough to make your own financial decisions in the long run, per Claro. Also, a private financial coaching session is a safe place to talk about money, as many people are too shy to talk about their financial indiscretions, like their overdraft balance or outstanding debts, says financial coaching trainer Hendrik Crafford (via Truth About Money). Therefore, a financial coach is someone people can confide in about their money matters and receive non-judgemental tips.

In a 2020 survey by Thrive Global in partnership with Discover, around 90% of respondents stated that money was their source of stress. 40% of respondents claimed they were doing nothing to safeguard their financial future, and more than two-thirds of respondents said they felt they couldn't handle the escalating financial pressures. Money problems can do a number on your mental well-being. And once your mental health is weakened, you're bound to make more mistakes and get yourself into a bigger mess. If you think you're in dire straits, getting financial coaching is the first step to improving your financial health and, accordingly, your mental health.

You can confide in a financial coach about your debts without worrying about being judged. They can quickly get a handle on your money issues, point out where you've missed it, and teach you how to get out of debt and set up an emergency fund for yourself, per Harmony Haus. Having a savvy financial expert working for you can help you keep your emotions together and avoid making the same mistake twice. Only when you know the root problems of your financial stress can you bounce back from losses and start planning ahead with confidence. In this regard, getting a financial coach is a great investment for your peace of mind.