This is a guest post at One Cent at a Time from David Bakke, who writes about important personal finance issues on Money Crashers, a financial resource that helps you better manage and grow your money.
Many aspects of today’s world pose challenges that, for many, require the enlistment of a specialist to offer expertise, guidance, and assurance. Like life coaching and career coaching, money coaching is an industry that has blossomed from such modern needs.
Money coaches offer clients individually tailored financial management plans. The services they offer vary, but typically include personal finance analysis, research, and planning. Many folks have successfully partnered with a money coach to resolve their financial management needs – but it is crucial to first learn more about them, and determine if hiring a money coach is right for you.
Defining “Money Coach”
A money coach possesses varying degrees of expertise in the world of finance, and differs from a Certified Financial Planner (CFP), who has to pass a certification process. Some CFPs aim to sell customers a financial product. When you work with a money coach, however, you pay for objective, unbiased advice, and typically do not purchase any financial products.
Money coaches can help you improve your finance management, but their expertise can be costly. Do you truly need a money coach to reach your long-term financial goals?
Determining If You Need a Money Coach
Perform an Objective Financial Analysis
To determine if you need a money coach, start by asking yourself a series of questions related to your finances. Try to answer the questions with brutal honesty:
- Do you have a firm grip on your finances? Do you carry balances on your credit cards? Do you pay your credit card bills on time? What is your credit score?
- Do you have any current controls in place regarding your spending? Do you follow a monthly budget? Do you track your spending and your income? Do you track your monthly bills?
- Do you have any plans for your retirement? Have you set aside anything for retirement? Do you have any idea how much to save for retirement? Do you have any kind of long-term vision for your finances?
Consider Becoming Your Own Money Coach
Many people may benefit from working with a money coach, but you can also benefit by increasing your knowledge base, rather than relying on someone else to resolve money woes. Instead of hiring a money coach, consider becoming your own money coach.
Some reasons to become your own money coach include:
- Nobody knows your finances better than you. Inviting a stranger to review, revise, and revamp your personal financial situation may not offer many additional insights. You know your own expenses – you know where they originated, and you know why you have them. You also know how much you can afford to spend on a monthly basis.
- Everything you need to know is at your fingertips. You can find extensive personal financial tips and guidelines online. Need to save money on groceries? Look it up online. Trying to find ways to save money on car insurance? Do an Internet search to learn how to save hundreds of dollars annually.
- I did it myself. I write about personal finance for a living, and I came from the school of hard knocks. I can guarantee that I made many of the same financial mistakes that you have made. I came to my own conclusions on how to save money, and I researched online for the remaining information I needed to improve my financial situation. I also talked with close friends and family members who offered me the benefit of their experience and expertise. I did all of this without spending a dime.
Will You Ever Need a Money Coach?
Qualified money coaches can offer clients valuable assistance to help them get their finances on track. If you have no control over your spending, if you have no idea how to get out of debt, and if you have no immediate plan for saving for retirement, then a money coach could play a vital role in your financial life.
Before hiring a money coach, thoroughly check references and their tenure in the industry, and review success rates. You can conduct research using the money coach’s name and email address. Read everything you can find online about a money coach, and use this information to help you make a solid decision about who to hire.
I recovered from the depths of financial debt without using any professional assistance – but this approach may not work for everyone. If you feel that you lack control over your spending and have no long-term savings plan, then a money coach may be right for you. As with many areas of the financial industry, this group of professionals includes highly qualified, knowledgeable individuals, as well as financial predators. Carefully conduct research and consider all of your options before you agree to work with a money coach.
SB’s Thoughts: I am not debating the need of a money coach. I had one, my father. He talked me about few simple money rules. No investment techniques, no frugal tips, he let me find my way. I didn’t pay for learning money. Go ahead and get a money coach if you feel you need one but spend money wisely, even on your money coach.
What are your thoughts on money coaches? Have you had any positive or negative experiences working with one?
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