What Is a Personal Finance Coach & Should I Have One?
When it comes to achieving what you want in life, it always helps to consult an expert.
Though most of us won’t have time to learn everything we need to know about managing our finances, especially if investing is a piece of our financial puzzle, we have the option to hire a financial coach to help us.
Just like you might hire a personal trainer to help you fine-tune your workouts to meet your personal goals, a financial coach can take a look at your unique financial situation and what your goals are for your money to help you decide the best path forward. This can save you time, and it can help to increase your chances of successfully accomplishing your financial goals.
What Is a Financial Coach?
A financial coach is not someone who manages your budget for you, does your taxes, or does the books if you have a business. They work in the capacity of advisor, taking the time to do the following:
- Look at the details of your current financial situation, such as your credit card debt, savings, checking account, budget (if you have one), and outstanding loans.
- Listen to what you would like to see happen with your finances.
- Listen to what you’ve tried in the past and hear about your strengths and where you struggle with money.
- Determine the best choices for your habits, goals, and financial needs.
In short, a financial coach will look at your current financial situation and inform you of the risks you’re taking that you may not realize, and teach you how to make changes going forward. They can also connect you with the services that will help you manage your money, grow your savings, and pay off debt in a way that makes sense for your lifestyle.
What Can a Financial Coach Do for Me?
The specific services provided by your financial coach will depend on what you ask them to do, but they could include the following:
- Creating reports that help you understand where your money is going every month
- Building a budget that takes into account debt payoff, savings, and other goals
- Outlining projections for debt payoff and savings based on current income and budget
- Helping you set up accounts that will enable you to have an emergency fund, retirement savings, college savings, and investments
- Guiding you in how to pay off debt and avoid incurring new debt
- Supporting you in the emotional ups and downs that come with making big changes in your financial habits
If you need more detailed support regarding the accounts you set up or choose, where to invest, or how to manage big tax-related or legal issues regarding your finances, your financial coach should be able to connect you with specialists in those areas. They should not attempt to do anything outside their areas of expertise themselves.
How Much Does It Cost to Hire a Financial Coach?
A financial coach is usually paid per hour unless you hire them for a project or a package of sessions. In general, a financial coach makes between $150 and $250 an hour, and they will meet with you for 6 to 12 sessions, usually once per month.
The idea is that a financial coach will take a look at your situation and then connect you with the tools you need to implement the plan they create. Usually, once a month after that meeting, for a total of six months or a year, they will check in with you and answer questions as they come up, occasionally tweaking the plan if anything changes.
While the hourly cost can seem steep, if you think about it in terms of an annual cost, it is more manageable for most people. If you struggle with getting your finances in order on your own, the cost of a financial coach could be a good long-term investment.
How Do I Find a Good Financial Coach?
You can find a good financial coach by asking around or connecting with local services in your area.
It is important to note that there are no certification or licensure requirements to be a financial coach, but there are training programs provided by the Association for Financial Counseling and Planning Education. You can go through their website to connect with a certified coach if you can’t find someone locally who can help you. They may also be able to connect you with specialists if you are facing tax or legal financial issues.
Is a Financial Advisor the Same Thing as a Financial Coach?
No. A financial coach helps you to clean up your budget and your financial behaviors so you do not incur fees, fines, and debt due to messy financial management.
A financial advisor helps you to manage your wealth and work toward savings goals, so you can retire comfortably. They will help you develop a long-term care plan to support you and your family, including dependent loved ones, as you age.
There are financial advisors who specialize in taxes, estate planning, guardian and conservatorship issues, long-term care, and other specific issues that contribute to your financial health over the long term.
Should I Hire a Financial Coach?
If you are struggling with managing your finances and making headway toward your financial goals, a financial coach can help. If you have attempted to learn new habits but have had a hard time understanding what to do first or feel that there is often more time in the month than money and aren’t sure what to prioritize, a financial coach can help you to get things in order.
Learn more about some of the small changes you can make that will help you get the most out of your money with Current on your side. From high interest rates on savings to fee-free services and quicker access to your money, Current can help you find your financial footing.
Check out our offerings and choose the ones that best serve you now.
What Is a Financial Coach and How to Become One. (January 2022). U.S. News & World Report.
Financial Coach vs. Financial Advisor: What’s the Difference? (July 2019). Quicken Loans.
How to Make Money as a Financial Coach. (November 2021). Ramsey Solutions.
What Do Financial Advisors Do? (April 2022). Investopedia.
Current is a financial technology company, not a bank. Banking services provided by Choice Financial Group, Member FDIC.
Here’s How to Get Your Maximum Tax Refund This Year
If you’re like most Americans, you may be expecting a tax refund when you file your 2023 taxes ...
Unmasking the Factors That Influence Your Credit Score
Whether you're applying for a loan, a credit card, or even a job, your credit score plays a ...