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Financial Coach: What It Is and How to Choose One

Financial coach: working on a budget

There are various types of professionals that can help you with money. It’s easy to get confused about who may be best suited to help you out. Often there is overlap in services provided. Today we are here to clear up what financial coaches do.


What is a Financial Coach?


Financial coaches are trained professionals that help individuals or couple’s around personal finance. They place emphasis on behavior and education. Financial coaches are particularly skilled at helping people stay accountable to financial goals and providing support to overcome money obstacles.

According to research conducted by the Consumer Finance Bureau, people that work with financial coaches demonstrate better outcomes with a wide variety of financial goals. This includes better money management skills, improved savings and credit scores, lower debt, and attainment of financial goals. *See the report here.

Coaches will work to educate the client around different financial situations in an individualized approach. A coach will act more like a personal trainer. For instance, if you want to lose weight a personal trainer is going to provide guidance with what to eat and how to work out. However, they aren’t the ones that need to get on the treadmill to see results. A financial coach operates in a similar way just related to finances. So, if your goal is to get out of debt, the coach will help you understand what steps you need to take then guide you along the way. It is then your duty to put forth the effort and make the lifestyle changes necessary to see results.

You will find that financial coaches are more geared towards working with folks on the fundamentals of personal finance. They can educate you on budgeting, debt, bankruptcy, the basics of preparing for retirement, types of insurance, types of mortgages, or what to consider when it comes to your estate. However, they are not licensed financial planners and won’t make recommendations or get into comprehensive planning.

Often once you have developed good financial habits with a coach you will then move onto working with a financial planner. People would stem to benefit from both financial coaches and financial planners. If you got the money to work with both it’s not going to hurt in any way.


What a coach isn’t.


A financial coach is not licensed under any state or federal authority. They cannot make investment recommendations or retirement account recommendations. They also can’t recommend insurance products. There is a keyword here, “recommend”, a coach can educate you on various financial things, but can’t make recommendations in any form. Another thing to note is that coaches aren’t there to do the work for you, such as, putting together a budget or crunching retirement numbers. A coach’s job is to teach you how to fish but not fish for you.


Qualifications of a financial coach.


A qualified financial coach will have gone through a training program. There are some specific financial coaching programs out there that do an excellent job training future coaches. Some of the most credible training programs are Dave Ramsey’s Master Financial Coach Training Program and Financial Coach Academy. You may also run into life coaches that work with clients around personal finance. Their education would be going through an ICF accredited school. As with any industry make sure you do your due diligence in knowing who you will be working with and what their background is anyone can claim they are a financial coach.


How to find and pick out a financial coach?


  1. The first step is finding a financial coach. Search the web, ask professionals you currently work with like your tax advisor, ask friends and family, directories for coaches are limited the best one is currently Dave Ramsey’s website, and finally search social media.
  2. Meet some coaches. It is important to meet with a few financial coaches to determine if you would like to work with them. While they don’t need to be your best friend you do need someone that you can build some rapport and trust. Most coaches will give a free consultation.
  3. Consultation. During the consultation be honest and upfront about your financial situation. You don’t necessarily need to jump into hard numbers but let them know what your pain points are. They may realize they aren’t a good fit and point you to a different financial coach or advise you to find another professional like a CPA.
  4. Learn about their background and what training they have gone through. A qualified coach will have gone through a training program. Never heard of the training program then make sure you check into the program the coach went through. If you find a financial advisor or accountant that claims to be a financial coach make sure they are actually trained in the practice, often they use it as a buzzword to attract clients.
  5. Ask questions. How do they charge? What is the length of time of their coaching sessions? How often they will meet with you? Do they specialize in anything particular?

That’s it! Let the process begin.


Final Words of Wisdom

Trust in the guidance of your financial coach and be prepared to put in some work. Remember that it is a process, and you won’t see results until you have committed at least a few months. You will be rewarded with financial peace and prosperity. BlackBird Finance is here to help so if you are ready, sign up for a consultation with some of the best financial coaches Colorado has to offer.

Not ready to commit to a consultation? Browse these resources.