What Is a Personal Financial Coach?

To understand what a Personal Financial Coach is, it is sometimes easier to start with what they are not. A Personal Financial Coach is NOT a financial advisor or a financial planner, they will not try to sell you investments or insurance or annuities or any other financial product. A good coach will charge you either a flat fee or an hourly rate based on the complexity of your situation.

A good Personal Financial Coach is NOT a counselor or a therapist. They should be results oriented. Your only choice is to start where you are today and build a new financial future. Spending a lot of time placing blame for your current situation does little to move you forward. The coach you select should be able to teach, inspire and motivate you.

A good coach is NOT a debt consolidator or someone who can show you some late night TV trick for making your debt disappear. A good coach should be concerned with your overall financial health and helping you put in place a long-term wealth-building plan.

When you hire a coach, they will sit down with you and discuss your goals and dreams. They will also collect a good deal of information about your present financial situation. Normally, you will be given either electronic spreadsheets or a packet of paper forms to complete. Most coaches will allow you to choose the format with which you are most comfortable.

Although your long-term personal goals are very important to the process, your coach will first ensure that you have a stable financial foundation. In most cases, this means that you have no consumer debt and have readily available liquid assets equal to 3-6 months of living expenses. If you are not yet out of debt or if you do not have an emergency fund these will be the first things your coach will help you achieve.

If you have debt, the coach will need to know who you owe, how much you owe them and what your current repayment schedule is. The coach will also need to know about your assets (your home, cars, bank, investment and retirement accounts). Expect to be questioned about the insurance you currently carry for your life, health, auto and home. Finally, the coach will want to know what your priorities are for the time you have together.

Using this information, together you will formulate a prioritized plan of action. The results of this highly focused effort should a clear roadmap that will lead you to your financial goals.

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