Why would I want to hire a financial coach?
If you already have all the money you want for the rest of your life and you know all the ins and outs of the financial systems in the US and how to use all the financial systems to your benefit, then you don’t need a coach. You are clearly and expert over money, with no money stresses in your life, and frankly you should consider coaching others. But if you are like most of the people in our country and desire to be able to have victory and freedom with your finances, then you can benefit from coaching. Countless professionals hire coaches to elevate them to the next level. Professional golfers have swing coaches, professional athletes have strength and endurance coaches, and singers have voice coaches. Corporate executives will often have career and/or life coaches. These are all people who we would view as successful, but they still see the value in a coach and getting another set of eyes on their unique situation to help them elevate their game/career to the next level.
A financial coach will do the same for you in the area of your money and help you take your finances to the next level. If you are living paycheck to paycheck and want to learn the best ways to budget and save money, a coach can help you. If you are out of debt and want to know how to start down the path to building wealth and retirement, a coach can help you with that as well. The value that a financial coach can provide is 1) to help you make a plan for all the areas of your finances and 2) teach and coach you in the behaviors and habits that will make you successful in this area of your life and work to improve your relationship with money. Those two things are critical to your success and worth far more than the cost of coaching sessions.
How do I pay for coaching when I feel like I am broke?
If you are inquiring about working with a financial coach, then you have probably realized that going it alone or using “free” advice isn’t working. Financial coaching gives you an extraordinary level of detail and individual attention and the cost reflects the scope of professional resources devoted specifically to your situation.
Many people are concerned that they can’t afford coaching; however, what some don’t realize is that they can’t afford to not have a financial coach. The reason is because improving your financial situation by paying off debt faster, plugging the leaks in your budget, and saving more money for your goals will quickly pay back the cost of coaching fees. For example you can compare coaching fees to:
1) the cost of cable TV for 1 year, of $360-1,000
2) the cost of credit counseling, which, at $30—$50 per month for four years, would cost around $2,000,
3) if your financial stress is causing marital problems, consider that the cost of marriage counseling averages around $2,500 for three months of sessions
4) de-stressing with one Starbucks coffee a day up to almost $1,500 per year.
Financial coaching fees are a bargain compared to these options, plus you’ll have a plan to change your financial future!
I have also found that if a potential client is not willing to pay the relatively small cost for coaching then they may not be ready for the larger sacrifices that will be necessary to make real change in their financial future and get out of their current situation. Therefore it is important to fully commit your time, attention, attitude and yes, a bit of your paycheck, to the task because your investment and “skin in the game” is a sign of your seriousness and likelihood of having success in attaining financial peace.
Isn’t all the information I need on how to manage my finances available free on the internet?
There is a wealth of information on the internet on all matters of finance that may or may not be correct. The internet will not learn your exact situation and will not take the time to learn about you and your family as well as your goals. Nor will the internet tailor an approach and plan for you to meet those goals. The internet will also not walk alongside you and encourage you as you embark on your journey to financial freedom and peace. A financial coach however will do all those things.
How is a financial coach different or similar to a financial adviser or financial planner like a CFP?
There are a lot of terms that are used in the personal finances space. Some have a formal legal definition and others do not. Bear with me as I attempt to clarify a few of the more common terms for various financial professionals.
“Investment Adviser”: has a legal definition by the U.S. Securities and Exchange Commission (SEC). It states that an investment adviser is a person, for compensation, that is engaged in the business of providing advice, making recommendations, issuing reports or furnishing analyses regarding the value of or investing in securities (e.g. stocks, bonds, notes, CDs, etc.).
“Financial Adviser”: there is no regulatory definition for “financial adviser”. It is a broad term that could define any number of financial professionals from stock brokers, insurance agents, tax preparers, or investment managers. Would I call myself a financial adviser? Not necessarily, but in the broadest sense of the phrase, I do advise people on their finances.
“Financial Planner: this is a term often used interchangeably with investment adviser or financial adviser. Financial planners provide investment advice about investments in general, not just securities and they also may delve into the other areas of your financial life. All investment advisers are financial planners, but not every financial planner may be an investment adviser. So, am I a financial planner, yes, because I definitely help you create a plan for your finances, but in an attempt to not cause too much confusion and to bring more emphasis to the coaching side, I’m calling myself a Financial Coach. I want to walk along side and encourage you like a coach would and help you create a plan to conquer your finances and build wealth. The most common certification associated with the term financial planner is a Certified Financial Planner (CFP) which is a designation that can only be used by those that pass the rigorous requirements of education, testing, and experience.
Investment advisers and many financial planners will also charge in different manners. The most common forms of compensation for investment advisers (and many insurance professionals) are to either charge a commission for a product they are selling you or to charge a percentage fee on the assets that they manage for you. As a financial coach, I do not sell any products nor do I take your assets under my control, so my fees are strictly per session that we meet.
I know several CFP’s, investment advisers, financial planners, and insurance professionals and they are wonderful people. Some of the financial industry has received a black eye over some high profile, shady characters, but they are not all like that. Be sure to ask a lot of questions and do your due diligence on any financial professional you are considering working with to understand the fees they charge and their deliverables and you should be in good shape. Ask them if they are acting as your fiduciary, which means they are to look out for your best interest (not their own).
Will a financial coach prepare a financial plan for me?
I will provide you with written actionable recommendations after our coaching sessions. In our coaching relationship we will be discussing a wide range of topics, so from that sense, yes you should have a clear path and plan for what you can do to take your finances to the next level, whether it is to get out of debt, master your monthly spending, or build wealth toward a particular savings goal. While some sessions may be focused on one particular area, the idea is to take a holistic approach to your finances.
Do I have to live in the same town to work with you?
No. Face-to-face meetings are great and if we are in the same geographic area (Cleveland, Ohio area), I will strive to do that. Fortunately in today’s world, we have wonderful video conferencing services available that can simulate us sitting in the same room and even a phone call can be effective as well. I’ve work with clients in different states using these forms of communication, and it is not an issue.
How long do coaching sessions last? Can I get everything I need in one session?
Coaching sessions will typically last about 1 to 1.5 hours each, but they could also be shorter or longer depending on your situation and desires. They will be a dialogue and a safe place for you to ask questions, receive information and get encouragement. It would be rare that the coaching you need would be complete in one session, but if your need is very specific, it could happen that way. Typical coaching would span a few sessions and that would stretch over a few months. Some prefer to get all their coaching in a short span and others like to check-in each month or once a year to see that they are still on track. Each situation is unique and fit to the client’s needs.
Are coaching session only available between 9-5 or can I meet for coaching after work?
I do my best to accommodate the schedules of all my coaching clients. I fully understand and appreciate that many folks will be working during the day, so I offer some evening sessions as well as session during the mornings or afternoons. I do not currently meet on weekends.
My situation is so bad, why would I hire a coach when I can file for bankruptcy and start over?
Bankruptcy could be one of a few options you may have. Be sure to research all the pros and cons of bankruptcy and make an informed decision on the path to take for you and your family. If you don’t want to file bankruptcy and deal with the ramifications of it, then a financial coach should be able to help you with a plan to get out of debt in a different way. However, sometimes bankruptcy might be the best option for you. If you do decide to go through bankruptcy to discharge certain debts and need help getting your financial affairs in order afterwards, a financial coach can also help with that.
I don’t like sharing my financial data so how can I know it won’t be compromised?
In order to fully understand your financial situation and work out a specific plan for you, some financial numbers will need to be communicated to your coach. I do not need or want access to your accounts, so that control stays entirely with you and I never need to know your Social Security number. The data that you transmit to me in order to help coach you is kept strictly confidential and not shared with any other parties. Period.
What training did you have for financial coaching?
I completed the Ramsey Financial Coach Master Training* initially and have continued to expand my depth and breadth of coaching by studying about the psychological components around money. Through my years of coaching and teaching about personal finance, I have seen the greatest impact to financial success from a healthy relationship with money followed by solid experience in the most beneficial best practices for everyday management of your money.
Another note regarding the Ramsey Solutions organization, since some have asked if I have a relationship with them or receive referrals from them. I do not work for Ramsey Solutions, nor receive any compensation or referrals from them. I am an independent business owner and have no ongoing relationship with the Ramsey Solutions organization that provided my initial training. In fact, I am saddened at times by some of the ways the radio personality of Mr. Ramsey can lean towards shaming or insulting those in financial hardship. The coaching program we learned was not shame based in any way, rather it taught empathy and compassion towards those we are working with. Perhaps he feels that shaming or getting upset at radio call-in guests at times helps with ratings, but that is not how I coach or treat people. For those reasons and others that have found Mr. Ramsey in news headlines, I choose to distance myself from the man/personality and focus on principals that are most important for people to know and learn to help them achieve a sense of freedom with their finances.
*(Required disclaimer by Ramsey Solutions)–“Completion of Dave Ramsey’s Financial Coach Master Training does not create an employment or agency relationship with Ramsey Solutions or it’s affiliates; it does not constitute a license or credentials to engage in legal, tax, accounting, investment or other professional services; nor does it constitute an endorsement or recommendation of the Coach by Dave Ramsey.”