Financial coaching and financial planning sound like they might be the same, but they are actually very different. This post will provide a solid breakdown of what a financial coach does and why you would hire one.
Financial Coaching vs. Financial Planning
Without going into details, it is important to know the distinction between financial coaching and financial planning. Financial coaching addresses more day-to-day financial challenges while financial planning addresses building assets by investment products. To further distinguish the two, here are the types of challenges a financial coach addresses:
A Financial Coach
- Works on personal and family budgeting
- Helps make a plan to eliminate debt
- Discusses ways to increase income
- Offers suggestions on how deal with overspending
- Teaches how to prepare and use a budget or spending plan
- Helps change money habits
- Teaches spouses how to have the money conversation without fighting
- May or may not talk about investments and offer specific investment advice depending upon credentials
- Fees are typically collected before coaching sessions
Why Hire a Financial Coach?
Ask yourself what are your financial goals, right now. If you agree with any of these, then you should hire a financial coach. You are:
- Unable to prepare a budget
- Tried to budget in the past, but can’t stick with it
- Seeking a plan to get out of debt
- Looking for ways to save money in your daily life
- Wanting to change your money and spending habits
- Ready to stop fighting with your spouse/significant other about money
- Tired of worrying about money and want to enjoy life more
You May Need Both: A Financial Coach and Financial Planner
It is entirely possible that a person might need both financial professionals to help deal with their financial future. However, if you have a specific need we can help you decide which of the two would suit you the best.
A good financial coach will know when you are ready to seek a financial planner. And a good financial planner should know if you need a financial coach.
A financial coach is best for day-to-day planning and management. Some people just need help with avoiding bad spending habits and dealing with outstanding debts. If you just want to be wiser about how you use your money, financial coaching is the direction you want to go. Frequently, people seek a financial coach because they have been unable to save money. This includes trying to reach both short-term and long-term goals.
A financial planner is better for making your money into more money in the long-term. Smart investing is not a skill most people have. Finding a professional who deals with investments for a living may yield better results than if you were to try to do it yourself. Generally, people seek out a financial planner when they have money saved and continue to save. They may feel they do not have the time to devote to making their own investment decisions.
Interested in Getting Financial Coaching?
At The Alexandrite Group, we specialize in financial coaching and are prepared to help you with personal budgeting, avoiding overspending, household budgeting, and dealing with your outstanding debt. Contact us today to discuss your financial needs.