#60 – What’s a Financial Coach?

Today- December 14- is one of those days in Tennessee where it’s going to rain non-stop. I had a list of outside things to do, so now we’re onto Plan B, which isn’t a bad alternative- sit down with a hot cup of tea and draft up the next blog post, while listening to the sound of steady rain in the background.

On the surface, this post title isn’t a hard question, but if you google “Financial Coach”, you’ll get all sorts of hits on financial planners, financial advisors, fiduciaries, certification requirements, etc.

A financial coach helps educate individuals on financial subjects and basic investment topics. Typically coaches act as mentors to help individuals on issues of daily money management, and set the stage for those individuals to identify financial goals and stay on track to meet them. This means financial coaches also take a look at the behavioral side of money management. They can help keep emotional distress from resulting in bad decisions which might derail long-term financial success.

Recognizing financial coaching as a profession is a relatively recently occurrence (similar to life coaches, fitness coaches, or wellness coaches for individuals). Financial coaches are not required to have a certification, but many are certified through the Association for Financial Counseling and Planning Education (AFCPE): https://www.afcpe.org/certification/

A financial coach cannot give specific advice about investing, nor recommend stocks to buy/sell unless they are also a certified financial planner or financial advisor (and hopefully a fiduciary, or someone who has an obligation to act in your best interest and is required to choose investments not based on their own self-interest or the interest of any other party).

One would turn to a financial coach for help saving money and setting financial goals. The education received from a coach should help establish the foundation for investing and growing money. Whether someone who’s worked with a financial coach “graduates” to taking on an investment professional- or moves into investment management on their own- is a different subject.

(Some of the above content comes from the following January 2022 resource: https://money.usnews.com/financial-advisors/articles/financial-coaching-what-it-is-and-how-to-become-a-financial-coach )

An established financial coach could make in excess of $100 per hour, although similar services from a financial institution could be well below that threshold. Interestingly, some non-profits (Navy-Marine Corps Relief Society comes to mind) provide similar scaled down services at no cost.

Most of you reading this post are in your 50s/60s and don’t need a financial coach. But we all could have benefitted from having one in our early adult years. High schools and colleges are “hit or miss” when it comes to offering formal financial education. In my opinion, that age decade of 15 – 25 is the prime period for such training, although money management lessons are certainly learnable at earlier ages. And we all know someone who learned these lessons well on their own.

Knowing that you (and I) have kids/grandkids who may need such training, I wanted to highlight one such financial coach who has been extraordinarily successful in developing a financial coaching business on her own. My purpose for highlighting her business is not to recommend the company, but rather to give you some insight as to her marketing technique and how wildly appealing it’s been to younger generations. There’s clearly a button being pushed here. This young lady in her late 20s started off more as a life coach where she was making a so-so salary. More important to her, she was making a difference in helping others deal with life. When she learned some tough financial management lessons on her own, she made financial coaching one of her offered services. In a couple of months her business exploded and she’s earning about $25K per month…and she’s making a huge difference for so many more individuals now.

I love learning about stuff like this!