In 2019, I combined my passions for personal finance with personal development. And my financial coaching business and dream career were born!
Before this I had no idea financial coaching was even a thing.
Turns out financial coaching has been around for 20 to 25 years. It branched out from financial counselling which developed during the 1970s and 1980s.
This was in response to people suffering from financial hardship.
Mainly due to ‘consumerism’ (trying to keep up with the Jones’).
Traditional financial counselling focuses on resolving financial crises.
Whereas financial coaching is proactive and goal-oriented. Aimed at helping people improve money habits and achieve financial goals.
I see financial coaching as the fusion between financial education and personal development.
It’s a tool to help you reach financial independence and build a life you never want to retire from.
In today’s newsletter, I will bust eight common myths around financial coaching.
Let’s dive in.
1. Financial Coaching is only for people who are struggling
You may think financial coaching is only for people who are struggling with money. Or who are up to their eyeballs in debt.
But this is FAR from the truth.
Over the past 5 years I’ve worked with a wide range of clients. Ranging from living ‘week-to-week’ to others who are millionaires.
Despite the differences in Net Worth and income levels these people have one thing in common. They want to take responsibility for their finances.
People who seek coaching are people who obsess about improvement.
Side note: Seek a financial counsellor if you’re in financial distress or hardship.
2. Financial Coaches give Investment Advice
If so, then go back and read this one.
Financial coaches ARE NOT licensed to give you investment advice.
This is the role of a financial advisor or planner.
Financial coaches help you shift your behaviour around money.
3. You Need to Be Wealthy to Hire a Financial Coach
Before I bust this myth let me clear something up.
Wealth IS NOT a Net Worth number or an income level.
Wealth is a STATE OF MIND.
You can have zero dollars in your bank account and still be wealthy. You can earn 6-figures + and still be broke…
Financial coaching is for anyone who wants to improve their financial fitness.
(Even elite athletes who are fit AF still have fitness coaches. The same is true for finances.)
Financial coaching is available to cater for people at all income levels.
For example,
- I have FREE money management courses in my Skool community
- I’ve run low-cost my ‘Fix Your Finances’ Challenge
But if you want 1:1 access to a financial coach that needs a bigger investment.
And if you’re committed you will make it happen.
One of my former clients came to me with zero dollars in their savings account.
But they were determined to work with me. So I set them a challenge to save a certain amount and then come back and see me.
They came back to me in a few months with DOUBLE the target I set them.
4. Financial Coaching is the same as Therapy
Financial coaching is not a substitute for therapy.
(Although some of the sessions I’ve had with clients have felt like therapy).
You may have emotional issues around money. This is often due to your upbringing and life experiences around money. These can have a detrimental effect on your behaviour around finances.
It’s important to unpack the emotional side of money. As this forms a part of your money story and financial blueprint.
A good financial coach knows when a problem is outside their domain of expertise.
They will refer you to a high quality therapist who can help.
(Deep trauma and mental health conditions are outside the scope of financial coaching.)
5. Financial Coaching is a ‘Quick Fix’
Financial coaching IS NOT a microwave solution to your financial problems.
Changing habits and behaviour takes time.
You’ve spent years (likely decades) thinking and behaving a certain way with money. You can’t zap your money problems in the microwave for 90 seconds and expect them to disappear…
Instant gratification (short-term thinking) will not get you anywhere.
Delayed gratification (long-term thinking) is critical for success in financial coaching.
It’s not about the destination, it’s about the process.
6. You don’t need a Financial Coach if you have a Budget
Most frugal Franny’s believe budgeting and penny pinching is the holy grail.
But financial coaching is about SO much more than a budget.
Most people let their budgets dictate their thinking.
They look at their income level and let that determine their goals and the life they’re capable of living.
A good financial coach sees beyond your current budget.
A good coach will expand your thinking. They will help you see beyond your current circumstances and self-imposed limitations.
Yes, having a budget and ‘living within your means’ is important.
But you want to know the FUN way to achieve financial independence?
EXPAND your means through personal development and skill acquisition.
7. Financial Coaching is Expensive and Not Worth It
Do you use the words ‘cheap’ and ‘expensive’ to describe the price you pay for something?
If so, I want to help you shift your perspective and language.
When you buy a product or service it’s not about the price you pay.
It’s about the VALUE you get.
To be more specific it’s about the USAGE VALUE you get.
If you see something as ‘cheap’ you either mean:
- This can’t be valuable for this price, OR
- This is incredible value for this price!
If you see something as ‘expensive’ you either mean:
- This must be high value for them to charge this price, OR
- I don’t see the value in this
Shift your perspective and language to reflect value.
Instead of ‘cheap’ say ‘that’s great value!’
Instead of ‘expensive’ say ‘this must be high value!’
Your perception of the ‘use value’ you get from financial coaching will determine if it’s worth it for you.
Price you pay > Use Value –> Expensive (Poor Value)
Price you pay < Use Value –> Cheap (Great Value)
8. Financial Coaches will take over your Finances
There are service providers out there who will manage your money for you and make decisions for you. And for some people this type of service is ideal.
But this is outsourcing responsibility.
And this mindset is the OPPOSITE of someone who would hire a financial coach.
The role of a financial coach IS NOT to take control of your finances for you.
Their role is to educate and empower you. So you can take control of your finances and make great financial decisions yourself.
A good financial coach will work with you, be your sounding board and collaborator. They will help you feel confident making financial decisions.
Conclusion
Financial coaching is for anyone who wants to improve their financial health.
It doesn’t matter if you’re ‘rich’ or ‘poor’.
What matters most is your attitude.
If you’re someone who:
- Takes responsibility for your results
- Loves making progress
- Is hungry to learn and grow
Then financial coaching could be the ticket to take your finances to the next level.
