Financial Coaching: What It Is and Why to Work with a Coach

What is a Finance Coach?

Written By Tiffany Woodfield, Financial Coach, TEP®, CRPC®, CIM®

Financial coaching may be beneficial whether you have $100,000 in assets or $100,000,000.

A finance coach is someone who can help guide you with the technical tools that you can use for saving, investing and creating wealth, and with soft skills such as how to create an abundance mentality. To truly be financially free, you need to understand both sides of the equation. Only then can you achieve happiness and have a good relationship with money.

Achieving financial success is about more than just knowing how to invest and make money.

It is about knowing the tools that are available and understanding what drives your behaviour.

Most people get stuck a little in both areas. You can have all the tools and great wealth, but you may not be truly financially free unless you’ve gotten rid of your biggest money blocks and have the right money mindset. 

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Table of Contents

1. What does a Financial Coach do?
2. Is it worth getting a Financial Coach?
3. What is the difference between a Financial Planner and a Coach?
4. You need a coach who can help you adapt when your life changes.
5. Is a Financial Consultant the same as a Financial Coach?
6. Who doesn’t need financial coaching?
7. Who needs a Financial Coach?

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What does a Financial Coach do?

The first step when working with a financial coach is to carry out a needs analysis.

Where are you now, and where do you want to be?

We need to uncover your relationship with money. We go through a series of questions to uncover what drives you or holds you back.

Examples of questions to consider are as follows:

• What do you think of money?
• What did you learn as a kid about money?
• Who do you know that has a lot of wealth?
• What is success to you?
• How much money is too much?
• If you have more money, do others have less?
• What are your fears around having money?
• How does this impact you in daily life?

The second step is diving into where you want to go. What do you dream of?

Money is what gives you the freedom to choose and live the life you want.

The third step is creating an action plan in which you are accountable. What are your triggers, and how can you recognize them in daily life and learn new patterns? So if one of your old programs running through your head was, “See, money doesn’t buy happiness,” every time this line comes up in your head when you see someone with success, you need to acknowledge it and move through it. A financial coach provides these tools.

The final step is, “What tools do I need with me to help me with my emotional old programming, as well as logical investment tools that can help me achieve success for financial freedom?”

This step is where you learn what the common tools are so you no longer need to feel intimidated when you don’t understand what the difference is between a bond and a stock, or how a dividend works. You will feel confident that you understand these tools and how to use them to your advantage.

Is it worth getting a Financial Coach?

Many people consider whether it is worth getting a financial coach.

I would ask: how often do you use money in a day, a week or a year? The answer is: too many times to count. So the importance of understanding your relationship with money and the significance of knowing how to use the tools available is exponential.

Underspending vs. Overspending

I have worked with clients who have more money than they can ever spend in a lifetime.

However, because they never worked on understanding their beliefs about money or built their knowledge of how to discuss money correctly, they live in fear that they will run out of money. 

They don’t have financial freedom.

Yes, they may have enough money. But they are so worried about losing their money that they live in fear. They never take the trip their friends invite them on. They always take the bus because cabs are too expensive.

And since they struggle with walking, instead of going out, they stay at home on the couch.

Imagine having more money than you could spend in a lifetime and saying to yourself, “I can’t possibly go on a cruise. That is frivolous and for other people. I don’t have enough money.”

This is an example of a missed life. If you are depriving yourself of enjoyment, you are forcing yourself into a false form of survival. It is just

Yes, she is still living…but is she?

On the other hand, it’s even more common for people to overspend.

I once knew a woman who spent every penny she earned on new shoes and dinners out. They live hand to mouth and did not save anything for the future.

One of the most important things I wish everyone would tell their kids is this: Remember, in your earning years, you need to save so that you can retire.

However, most of us aren’t raised with a solid financial education.

Working with a financial coach helps you to uncover your weaknesses and limiting beliefs so that you can be in control of your money.

What is the difference between a Financial Planner and a Coach?

The difference between a financial planner and a coach is that a financial planner does a one-time plan for you, while a coach is your guide through life.

While a financial plan is very detailed. But it just considers one point in time. Your financial planner will consider all your assets, your budget, inflation, and your goal of retirement or buying a home. Your financial plan is just that: a plan.

Even the best-made plans need to change and alter because life is unpredictable.

You need a coach who can help you adapt when your life changes.

I like considering the example of starting out at the gym.

It is January: you joined the gym with the best intentions and have met with a fantastic trainer.

You just finished your first week and are following the detailed plan of what to do every day, including what to eat and drink. After your second week, you are feeling great.

Then it is Wednesday, and you are tired. So you decide to skip the gym and go for drinks after work.

Then Thursday, you feel foggy, so you don’t go. Friday, you feel like this week was already a bit of a write-off. And work has been so busy. You decide that you’ll get back to it next week.

Well, next week never happens, and you feel guilty; you don’t even want to think about it.

This is where you need a coach or a check-in, or you may never go back to working out. It may be next January before you start another healthy cleanse routine!

The most important thing is understanding your behaviour and why you may fall off the wagon. Then you need a guide that helps you stay on track.

This is the same with money.

If you understand your behaviour and have financial tools, knowledge, and a guide, you can be more effective.

You need two parts of the equation to reach financial freedom:

Understand your behaviour and triggers + Understand the tools available and how they work = Financial Success and Financial Freedom.

Is a Financial Consultant the same as a Financial Coach?

In the financial service industry, there are many different titles, which can be confusing.

A financial coach and financial consultant may be considered the same thing by many. It’s important to look into the experience and education the individual coach or consultant has.

Is it relevant to my situation, and have they helped people in situations similar to mine?

I would recommend looking for someone who has worked in the industry and has been regulated by a governing body. Having a designation such as a portfolio manager or financial adviser and having worked with investments would be beneficial.

Who doesn’t need financial coaching?

I sometimes get the question, “Who doesn’t need a financial coach or wealth coach?” 

As we have identified, you can have accumulated significant wealth and still need a coach, because your money isn’t working for you or it isn’t in alignment with your values. 

You still feel a little anxious about money and making choices with your money.

So who doesn’t need a coach? 

If you are someone who doesn’t want to discuss money or have more tools to gain more freedom with money, you may need a coach. But I wouldn’t recommend one at this time. This is because you need to be ready to acknowledge your beliefs around money and learn the tools to have money working for you. 

Honestly, it is so worth it because you truly feel free.

Who needs a Financial Coach?

If you want to build more wealth and have concrete goals, I would recommend working with a financial coach.

Would you benefit from working with a financial coach? Does this describe you?

• You are in your peak earning years and want to understand the best tools to save and plan for the future.
• You are now on your own, but you used to rely on a spouse or partner to manage your funds. You want to understand how to live the life you want and never run out of money.
• You have wealth and still worry it won’t be enough. You don’t feel financially free.
• You are an entrepreneur and want to know where to invest your time and money so you can capitalize on this opportunity.
• You want financial freedom and to be in control of your financial situation so you don’t have to rely on anyone else.
• You recently sold a business and want to retire but don’t want to run out of money. You want to use your money wisely and learn about charitable opportunities.
• You have created wealth and want to understand estate planning. You want to leave generational wealth and a legacy.
• You are dealing with guilt over having wealth because you didn’t earn it but inherited it.
• You just finished university and want to make sure your goals, beliefs and tools are in alignment so you can achieve financial freedom sooner.
• You want to understand how your money beliefs and money blocks may be holding you back.
• You have seen your family’s mistakes and don’t want to repeat them.

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