Do you need a financial coach?
Written By Tiffany Woodfield, Financial Coach, TEP, CRPC®, CIM®
These days, there’s a coach for everything.
Whether you want to become a better runner, speaker, parent, or beekeeper, you can find a coach to help. But when it comes to money, only the most motivated will seek coaching.
This is too bad because most people — whether they’re earning $50k or $500k per year — would benefit from financial coaching that deals with their money mindset and how to use financial tools to build wealth.
In this post, I’ll dig into who needs a financial coach. And, more importantly, whether you need a financial coach. Maybe you don’t. Maybe you’re doing great, and all you need is some self-coaching.
Let’s find out!
Whether you’re a budgeting beginner or a saving superstar, there’s always room for a money upgrade. So, let’s dive in to find out if financial coaching is for you.
What exactly is financial coaching, and how is it different from financial advising?
A financial advisor is a professional who has undergone specific training and is usually regulated by a governing body.
They will provide tools for making financial decisions and planning for the future. They will also manage your investments and create a balanced portfolio for you based on your needs and risk tolerance profile.
Financial coaching, on the other hand, is more focused on your underlying behaviour and relationship with money.
A financial coach will not manage your portfolio or create an investment strategy for you.
Instead, a financial coach will help you understand the practical tools, such as budgeting and investing, and your emotional programming around money. You have the greatest potential for financial success when you have released your limiting beliefs around money and know how to use some critical financial tools.
You need to understand how your beliefs around finances, which were set up when you were young, may be holding you back.
Otherwise, no matter how hard you work, you will continue to have a drag on how much success and money you have in your life. A financial coach helps you understand your current attitude around money and success and then works with you to change this programming to align with your goals.
It’s important to note that, in general, terms in the financial services industry can be confusing and sometimes overlap. When hiring a financial advisor or financial coach, it is crucial to understand their expertise and background knowledge.
Having someone with experience and training in the financial services industry is preferable.
Anyone can call themselves a financial coach. It’s not a regulated term. So, make sure you’re comfortable with your coach’s background.
How do I know if I need financial coaching?
While most people would benefit from financial coaching and understanding their attitude toward money, the main factor in determining if you need financial coaching is this: do you notice that you’re stuck and are ready to change your financial situation?
Remember, for any change to occur, you must acknowledge that you would like to make a change and then take action. A coach can work with you as a guide to uncover strategies to move forward, but you still need to be committed.
It is fundamental to recognize financial coaching isn’t just for those struggling with debt.
Many people have more than enough money to live and pass on to future generations, but they still constantly worry about not having enough. They limit themselves from true financial freedom because of fear. Working with a financial coach can help in these situations. Your financial coach can guide you so that you work through your individual drivers and fears around money and financial success.
Society Has Made It Wrong to Talk About Money
Unfortunately, it is generally considered taboo to talk about money, and as a result, many people feel alone in their money worries.
Can your best friend tell you, “I can’t sleep at night because I worry I won’t have enough?”
Talking about your money fears is particularly taboo if you already have more than many people around you. It may bring up a pattern of feeling “selfish” or “wrong” to worry about money when so many others have less.
No matter where you are financially, it’s normal to feel how you feel because it isn’t based on logic.
This is also why no matter how much money you have, it will never feel like enough if you haven’t released the emotional programming and fear ingrained in you growing up.
How a Financial Coach Can Help You
A financial coach can help you explore your first experience with money and what values you learned.
Some of the questions you may explore with a financial coach are as follows:
- Do you believe you will never have enough money and it could disappear anytime?
- Did your parents or people you looked up to teach you that working for more financial success was selfish?
- Is money bad?
- Can money buy happiness? Or unhappiness?
- What is financial success?
- Do I use money to define my sense of worth?
How Families Can Benefit from Financial Coaching
The areas where families significantly benefit from financial coaching are estate planning and teaching kids to be independent and follow their own path.
Most people believe you should never talk about religion, politics, or money at the dinner table. However, this has created a problem because families do not discuss succession and estate planning. They fear if they give too much to their kids, it will take away their drive and make them lazy, or they fear death itself, so they don’t talk about it at all.
The problem is death is inevitable; without proper planning, more money can go to your government in taxes and will not be distributed as you intended. Most people work hard to have a good life and, if possible, to create a legacy. This is possible when you plan, have conversations with your family about your values, and utilize the proper tools while you are alive.
How Financial Coaching Helps When You’re Nearing Retirement
When you are getting close to retirement or want to consider a work-optional lifestyle, financial coaching can help you make this decision.
At this stage of your life, you often already have had a financial plan done to “run the numbers,” so you know when you can stop the daily grind. However, suppose your subconscious mind is still driven by fear. In that case, you may never truly “feel financially secure,” and you may continue to wonder if you have enough.
This isn’t surprising. Only relatively recently have people had to start planning a 30-year retirement. That is a long runway, and you want to know you can enjoy this stage of your life.
A financial coach can help you understand what limiting beliefs are creating blind spots for you around retiring. Think of this process as shining a light on those cobwebs and then cleaning out the cobwebs so you can feel you are making intelligent decisions.
When your logical and subconscious mind work together towards a common goal, you finally feel you have achieved financial freedom.
Just remember that a financial coach can’t do the work for you. They can guide you towards making these breakthroughs and understanding yourself better. They can guide you through releasing limiting beliefs. However, ultimately, change will only occur if you’re ready and willing.
Can a financial coach help me get out of debt?
A financial coach can help you understand where you are currently and where you want to go.
This understanding will empower you to take the necessary actions to get out of debt. You’ll have a plan and the knowledge of why you got into debt in the first place and how to prevent it.
The difference between a financial coach and a financial advisor is that while a financial advisor can help provide the tools to budget and save, they do not help uncover WHY you keep going into debt.
Think of financial freedom as an equation.
Equation:
Logical Tools + Releasing Negative Subconscious Programming = Financial Freedom
Logical Tools
- budget
- financial plan
- investment strategy
- estate planning
Subconscious Programming
- limiting beliefs around money
- attitude toward money
- feelings of guilt and anxiety towards money
- fear
The only way to achieve financial freedom is to tackle both parts of the equation.
No amount of money, budgeting, investment strategy, or assets will make you feel you have financial freedom if you haven’t addressed the subconscious beliefs that are actively holding you back.
These obstacles, which you can think of as money blocks or limiting beliefs, stop you from successfully achieving your financial goals. You can think of them as massive logs that have fallen in a big windstorm and are blocking your path.
You have a vision of where you want to go, but you must clear the path to get there.
Should I consider financial coaching during significant life changes like marriage, divorce, or career changes?
The benefit of financial coaching when going through significant life changes such as marriage, divorce or a career switch is that you are already evaluating and changing patterns because you are at a major crossroads.
This makes it easier to check in with where you currently are and where you want to be.
Marriage: A financial coach can help you understand if you and your partner have similar beliefs about money and help you be on the same page from the beginning.
Divorce: Often, in a marriage, one partner handles the finances. This can make it particularly difficult when you suddenly need to manage and understand your financial situation. Having a financial coach can help you uncover your limiting patterns and beliefs. It is an emotional time, and you will want support to think clearly.
Career Switch: When changing careers, you are often in the best position to negotiate your salary before accepting a position. It has been found that women often get paid less because they don’t ask for more and feel uncomfortable talking about money. You need to get comfortable with money and be able to negotiate your value.
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About the Author
TIFFANY WOODFIELD is a financial coach, cross-border expert, and entrepreneur based out of Kelowna, BC. As a TEP and associate portfolio manager, Tiffany has extensive experience working with successful professionals who want to leave a legacy and enjoy an adventurous, work-optional lifestyle. Tiffany combines extensive knowledge from her background as a financial professional with coaching and her passion for personal development to help her clients create a unique path that allows them to live their fullest potential. Tiffany has been a regular contributor to Bloomberg TV and has been interviewed by national and international publications, including the Globe and Mail and Barron’s.