Background photo created by pressfoto – www.freepik.com

You’re probably familiar with the concept of advice provided by financial planners/advisers. However, a money coach is not the same thing and many people confuse the two. So, what’s the difference?

As a money coach, I focus on giving you control over your everyday personal and business finances. You learn how to look after the money you already have. I teach you the fundamentals of good money management such as how to:

• create a spending plan (budget)
• manage cash flow
• set meaningful goals
• decide which debt to pay off first
• stay on track (by holding you accountable to your plan)
• make better financial decisions.

Money coaches don’t give specific investment or insurance advice and don’t sell any financial products.

A financial planner/adviser is someone who has relevant tertiary qualifications and is licensed to give specific financial advice such as:

• recommending investments and insurance policies
• retirement and estate planning
• superannuation
• navigating tax implications that could affect their client’s life.

Financial advisers are paid to take responsibility for what happens to your money. They charge fees for preparing the advice, implementing the advice and ongoing monitoring. The adviser may also receive incentives to sell you a financial product.

Much is said about the importance of having a financial adviser. But I believe that money coaching is far more important. I see money coaching as the precursor to hiring a financial adviser. Once you’ve mastered how to manage your money you can begin to build wealth and be ready to engage a financial adviser.

There’s endless information out there about managing our money. If we don’t know what to do, we can find out. The key to building wealth is not a secret – spend less than you earn and invest the difference.

So, if the solution is so simple, why do so many people have difficulty managing their money and growing their wealth?

Because there’s a massive gap between knowing what you should do and actually getting it done. You consume all the information, get all fired up to make changes and then … life happens, old habits return and you lose your motivation.

This is a universal problem. Think about all of the times you’ve made New Year’s resolutions (like prepare a budget, lose weight or exercise more) and haven’t followed through.

We can also feel paralysed because we don’t feel confident or don’t know where to start to improve our unique financial situation. When you feel like there’s so much to do, you can be left feeling overwhelmed.

This is where money coaching comes in. Working with a money coach ensures that you get the knowledge, skills and support that you need to bridge the gap between knowing what to do and actually doing it. A money coach will guide you step-by-step from feeling stuck to taking action specific to your goals.

When you work with a money coach you benefit from:

• the expertise of someone who is ahead of you on the same journey
• the experience of all the clients who have previously worked with the coach.

Money coaching accelerates your learning and keeps you focused on your action plan. You save years of time and thousands of dollars in mistakes by avoiding the pitfalls and overcoming the obstacles that would have previously hindered you.

Instead of being in the same financial situation (or worse) 6 months from now, you are able to move consistently forward, closer and closer to your financial goals.

A good money coach will help you see what your values are and assist you to set the goals that you really want. Not the ones that mirror the goals of others such as your parents or advertisers.

With a custom designed plan for your money you’ll take focused, consistent action towards your goals so that success is transformed from a question of “if” to the certainty of “when”. You’ll go from feeling stuck and not taking any action to knowing exactly what to do, when to do it and how it all fits together to produce the result.

When you know what you should be doing, it’s easy not to take action because you haven’t invested anything into it. The act of paying someone to help you with your finances increases your chances of success. When you’ve handed over your hard-earned money you’re going to show up, stop making excuses and do the work.

Having a money coach encourages you to take responsibility for your own financial decisions and hold yourself accountable to your goals. With the support and accountability provided by a money coach you’ll develop habits that ensure lasting success. You’ll find it easier to maintain focus so that all the distractions in life fighting for your attention no longer derail your financial plans.

Nearly every provider of financial information available to you has something to sell which taints the quality of the advice you receive.

Money coaching provides financial education without conflicts of interest. When you have a good understanding of the basics of money management you’ll be able to trust yourself to make the right decision on any professional financial advice you seek.

Because a money coach is impartial, they can quickly see opportunities for you to save money that you’ve likely missed. Those small amounts coming out of your bank account that you don’t even realise can really add up over time. Even saving a small amount can mean the difference between struggling and having more room to breathe.

Did you know that the real problems in relationships don’t stem from arguments over dirty dishes or taking out the trash? According to a study by Relationships Australia, financial stress is the top cause of relationship breakdown. Letting your money issues develop and fester can cause enormous arguments.

A money coach will bring up different aspects of your finances from an unbiased, detached and non-emotional perspective. This external facilitation can help open up the lines of communication between partners around topics that would normally cause stress.

Sometimes two people have different ideas as to how money should be managed. This is a recipe for disaster unless they can work out a compromise that allows each one to have input into where the money goes and the priorities.

The best way to achieve this is to work on a plan for your money with a money coach. This will allow both of you to see that your individual “needs” and “wants” are being met as far as possible and that there is an overall bigger plan decided in collaboration together. It gives you joint “ownership” of your plan.

Once your finances are improving and you’re experiencing less stress, your energy changes causing a ripple effect of more positive interactions with the people around you.

We often don’t realise the importance of financial fitness in our quest for overall peace and self-satisfaction.

Financial stress is very prevalent and there’s a lot of shame and embarrassment around it.  As a result, people don’t really talk about it and tend to suffer in silence. This puts them at risk of developing anxiety and depression.

The psychological burden of stress also has a physical effect on the body, with lack of sleep, digestive issues, lowered immunity, difficulty concentrating and so many more symptoms that can be connected to your finances.

People often cope with financial stress by using drugs or alcohol to manage their negative feelings around money, resulting in further damage to their health and relationships.

A money coach will help you create a plan that allows you to focus on the financial decisions you make every day, no matter how important. You will have the information to help you decide at that moment if it makes sense to save or spend. Do I really need this? Should I buy right now or wait?

The sum of each decision made will make your future with money all the better. You will quickly reduce your stress levels over money by focusing on one thing at a time, and eliminate confusion.

Financial goal setting with a money coach requires that you focus on today so that you can have what you want in the future. Goals drive the moment by moment decisions giving you new levels of motivation and interest.

Now, you might think that it seems strange to pay for help with managing your day-to-day finances. Who needs another “expense” when you’re already struggling, right?

The truth is, if you think you can’t afford money coaching and worry about your finances is affecting your business success and relationships, you are in a no-win situation.

Rather than looking at paying for a money coach as an “expense”, see it as an investment in your financial future, your business and your health. It will pay for itself over and over again.

If you want to have control over your money and be more intentional about the way you spend and save, a spending plan is the answer. You can find out more about spending plans vs budgets in this blog post.

And finally, if you’re thinking about working with a money coach, book in here to for an obligation-free chat with me about your needs.