What is a Financial Coach?
A financial coach is someone who actively advises and encourages you to reach your financial goals, usually for a fee.
Your financial coach will start by asking you questions, to determine what your current financial situation is, and what you want to achieve with your life. He will then help you to define realistic financial goals, and come up with a financial plan, that will support your life goals.
After the initial planning is done, your financial coach will actively check up on you to see if you’re on track, encourage you to keep going, and give you advice about how to overcome unexpected challenges that pop up along the way.
Should I have a Financial Coach?
The main job of a financial coach is encouragement.
If you are a self-motivated person, who finds it relatively easy to achieve your goals, without receiving a lot of help from other people, then you don’t really need a financial coach.
However, if you are someone who finds it difficult to stay motivated and focussed on your own, or someone who draws a lot of motivation from the encouragement of a coach (not only in your finances, but also in any area of your life), then you may benefit from the services of a financial coach.
Having said that, you must remember that a financial coach offers a professional service. A good financial coach will usually charge between R400 and R1000 per hour for his services.
What qualities should I look for in a Financial Coach?
A good financial coach is:
- a good steward of his own money,
- someone you can respect, and trust,
- has the same value system as you,
- has good people skills,
- is good at motivating other people to reach their goals, and
- is qualified, and accredited with a trusted body like the Financial Planning Institute of South Africa.
The idea of financial coaching is still a relatively new concept, and is closely related to the idea of life coaching.
You may find it harder than you imagine to find a financial coach. Many people call themselves financial coaches, but they are actually financial advisors.
The disadvantages of having a Financial Coach
The main disadvantage of having a financial coach is that you may become too accustomed and comfortable with the emotional support he provides to you, and never learn to stand on your own feet.
The second disadvantage of having a financial coach is that he may have a different value system to you. It is inevitable that your financial coach will try to influence you to adopt his values. Even the most objective and impartial ones. This is why it is important to select a financial coach that has the same value system as you do.
For example, my values will influence me to sometimes give advice that is not the best advice financially speaking. There are some things, like investing in companies that make good profits, but do so dishonestly, or to the detriment of other people, that I will always advise against.
It’s still up to you
You can have the best coach in the world, and the best advice that money can buy, but in the end, whether you reach your financial goals or not, is up to you.
A financial coach is a luxury, that most people can do without. If you decide to make use of the services of a financial coach, you should be able to afford it, and your goal should be to only do it for a limited period of time, until you can manage on your own.
It is not the responsibility of a financial coach, or anybody else, to make you reach your financial goals. That responsibility is yours, and yours alone.
