In today's fast-paced world, managing finances can often feel like navigating a complex maze.
From budgeting apps and saving accounts to investing in stocks and shares and pension planning, the enormous amount of financial decisions we face can be overwhelming. It is definitely how I felt even in my 20’s before the advent of app based options catapulted access.
Furthermore, research by the Money Advice Service found that only 42% of UK adults feel confident managing their money.
That's where financial coaching comes in.
In this article, we'll cover some really common topics:
What financial coaching is and how it works
How it differs from traditional financial advising
How it can empower individuals to take control of their financial futures
Watch our video about The Parent Money Coach and how financial coaching with us works below.
What is Financial Coaching?
Financial coaching is a collaborative, person-centred approach to personal finance that focuses on helping individuals identify and achieve their financial goals. Unlike traditional financial advising, which often involves giving specific recommendations or advice, financial coaching is more about guiding individuals through their financial journey, providing support and empowerment, accountability and confidence, and education along the way. This can be from small day to day decisions, through to much larger life changing decisions.
At its core, financial coaching is about empowering clients to make informed decisions about their finances and develop positive money habits that will serve them well in the long term. Whether it's making ends meet each month, paying off debt, saving for a property, or planning for a family or even retirement, a financial coach provides the guidance and support needed to navigate these challenges successfully.
How Does Financial Coaching Work?
Financial coaching typically begins with an initial assessment, where the coach and client discuss the client's financial goals, challenges, and priorities. Based on this information, the coach works with the client to create a personalised action plan tailored to their specific needs and circumstances.
Throughout the coaching relationship, the coach provides ongoing support and accountability, helping the client stay on track towards their goals and navigate any obstacles (such as financial setbacks or mindset barriers) that arise. This may involve regular check-ins, goal setting, budgeting exercises, and educational resources to help build financial literacy and confidence.
One of the key principles of financial coaching is empowerment. Rather than simply telling clients what to do with their money, a financial coach empowers them to take ownership of their financial decisions and build the skills and knowledge needed to achieve financial success independently.
Financial Coach vs. Financial Advisor: What's the Difference?
While financial coaching and financial advising share some similarities, there are also important distinctions between the two:
1. Focus:
Financial coaches focus on behaviour change and building healthy financial habits. They help clients identify their values and priorities, set meaningful goals, and develop strategies to achieve them.
Financial advisors, on the other hand, focus more on providing specific financial advice and recommendations.
2. Scope of Services:
Financial coaches offer a holistic approach to personal finance, addressing various aspects of their clients' financial lives, including budgeting, saving, debt management, and goal setting.
Financial advisors often specialise in specific areas of financial planning and may offer more comprehensive services, such as investment management, estate planning, and risk management.
3. Regulation and Qualifications:
Financial coaching is not regulated in the same way as financial advising and there are no specific qualifications or credentials required to practise as a financial coach. However, reputable financial coaches may have training in areas such as coaching techniques, financial planning, and behavioural psychology. At The Parent Money Coach, Ed is our Head of Financial Coaching and is a certified Coach and qualified secondary school teacher.
Financial advisors are typically regulated by the FCA and must hold specific licences or certifications to provide financial advice. They may also be subject to fiduciary standards, requiring them to act in their clients' best interests.
The Benefits of Financial Coaching
Why choose financial coaching over traditional financial advising? There are some key benefits:
Empowerment: Financial coaching empowers clients to take control of their own finances, build confidence, and make informed decisions.
Personalised Support: Financial coaching offers personalised guidance tailored to the individual needs and circumstances of each client.
Behaviour Change: Financial coaching focuses on changing behaviours and building healthy financial habits that lead to long-term success.
Accountability: A financial coach provides ongoing support and accountability, helping clients stay motivated and focused on their goals.
Education: Financial coaching provides education and resources to improve financial literacy and empower clients to make informed choices.
Is Financial Coaching Right for You?
If you're wanting someone to support you gaining clarity on your goals, building confidence to make decisions that are right for you and gaining peace of mind that your family's finances are secure, then Financial Coaching could be right for you.
By working with a qualified financial coach, you can gain the knowledge, skills, and confidence needed to take control of your finances and support yourself and your family in the long-term.
How does coaching work at The Parent Money Coach?
We're on a mission to empower you to make decisions that feel right for your family's future. Through our 1-2-1 coaching, you'll explore your mindset and relationship with money, feel more confident making financial decisions and build a tailored action plan to achieve your financial goals.
The best way to explore if coaching could be right for you is through a 30 minutes free chat with Ed, Head of Coaching at The Parent Money Coach. It's a no obligation free chat where you'll talk through your needs, worries or aspirations and together and there is absolutely no prep needed!
Not ready for a free chat yet but still want to find out more about The Parent Money Coach?
Watch our 2 minute video below or visit our website to read more.