Between bills, debt payments, and everyday expenses, it can feel impossible to make progress with your finances. That’s where financial coaching comes in.
Working with a money coach is an investment that can give you the clarity, structure, and support you need to reach your goals. In fact, the Consumer Financial Protection Bureau (CFPB) found that financial coaching can improve money management, saving habits, debt payoff, and even credit scores.
Let’s look at how money coaching works and the common signs you need a financial coach.
What is money coaching?
Money coaching (sometimes called financial coaching) is personalized guidance that helps you understand where your money goes, build better habits, and create a realistic plan for your finances.
Unlike financial advisors, who provide investment advice and often manage investment portfolios, coaches typically focus on behavior, systems, and your mindset around money. For example, a coach could help you:
- Set financial goals
- Determine how much to save each month
- Develop a debt payoff plan
- Build an emergency fund
- Create and stick to a budget
- Understand why you spend impulsively and learn strategies to curb it
How does money coaching work?
Most financial coaches begin with a consultation to understand your current financial situation, stressors, and goals. From there, they can help you create a personalized action plan based on your priorities.
You’ll typically meet with your coach on a regular basis. That way, they can make sure you’re staying on track, answer any of your questions, and provide feedback on areas to improve.
When do you need a money coach?
Wondering whether coaching is right for you? Here are some signs you need a financial coach:
Your money mindset is holding you back
Many people have complicated feelings about money. You may feel guilt or shame around spending, believe you’re “bad with money,” or avoid looking at your finances altogether.
These patterns often stem from unhealthy societal messages or experiences from your upbringing. A money coach can help you uncover the root of these behaviors and build a healthier relationship with money.
You’ve experienced a major life and financial change
After a significant life change, such as marriage, divorce, or having a child, your income and expenses can look very different. Reworking your budget and money goals can help you plan for this new reality.
The same is true during a career change. Whether you’ve received a raise, switched jobs, or feel uncertain about job stability, having a clear strategy can help you prevent lifestyle creep and prepare financially for a potential layoff.
You want to save money
If it feels like there’s never anything left of your paycheck to save, you may need a financial coach. It’s discouraging when your net worth doesn’t change, or unexpected expenses keep wiping out your progress.
When you meet with a money coach, they can help you figure out how much you can save and spend each month. Once you have a plan, you can actually start saving for the future, whether it’s for your emergency fund, retirement, or travel.
You struggle with impulse spending
Have you noticed you spend more when you’re stressed or bored? Many people turn to shopping for a quick dopamine boost, but this habit can be detrimental to their overall financial health.
A money coach can work with you to identify the triggers behind impulse spending and develop healthier alternatives. This makes it easier to break the cycle of spending, regret, and guilt, replacing it with better habits.
Your debt is overwhelming
When you’re juggling multiple debts, it can be difficult to know where to start. A money coach can help you determine which balances to prioritize and create a realistic pay-off plan.
They can also answer common questions, like whether you should save while tackling debt.
Once you have a framework for paying off debt, it can feel more manageable and no longer block your other financial goals.
You need help creating a budget
Have you tried multiple budgeting apps and spreadsheets, but nothing has stuck? If budgeting hasn’t worked for you, it could be a sign you need a financial coach.
In addition to helping you budget, a money coach can keep you accountable. In fact, people who received financial coaching were 36% more likely to use a budget, according to a TIAA Institute study.
You’re planning a major purchase
If you live paycheck to paycheck, buying a home or a new car can feel entirely out of reach. A financial coach can help you set a realistic savings goal, so you know exactly how much to set aside each month.
Coaching can also help you figure out what you can comfortably afford, like how much of your income can go toward a car or mortgage payment. This prevents you from overextending yourself, allowing you to live within your means.
You have an irregular income
Budgeting for irregular income is often challenging for freelancers and the self-employed. When your cash flow is unpredictable, it’s hard to know how much you can safely spend and save.
Financial coaching can help you build a system that works for both busy and slow months. That way, it’s easier to stay on track with your goals, even without a steady paycheck.
You want support without judgement
People often avoid discussing their financial struggles with friends and family. It can feel embarrassing, especially if you’re afraid of being judged or talked down to.
Working with someone who sees a wide range of financial situations can take off the pressure. It gives you a safe space to get advice and ask questions.
Sometimes simply having someone in your corner to offer encouragement and keep you accountable is all you need to turn your finances around.
How to choose the right money coach
If you’ve experienced any of the common signs you need a financial coach, here are the steps to get started:
- Get clear on what you need help with. Look for coaches who specialize in the areas you struggle with most, such as mindset, budgeting, debt, or managing irregular income.
- Find a coach who matches your values. Reading a coach’s website and bio can help you understand their communication style and approach. Some coaches offer gentle guidance while others lean toward tough love. Neither is right or wrong, it’s just a matter of which is the right fit.
- Watch for red flags. A good coach will be transparent about pricing and what’s included. Be cautious of coaches who earn commissions, push financial products, or promise quick fixes.
- Start with a consultation. Your initial meeting will give you the opportunity to discuss your financial situation and goals so you can decide whether to move forward together.
To make the process easier, a curated directory, like the Lunch Money Certified Coaches Directory, can help you find vetted coaches.
Our directory features coaches who have completed a seven-week certification program covering both core and advanced features of Lunch Money. That means they can help you build a budget, set transaction rules, and generate reports, so you get the most out of the platform.
If you’re ready for clarity and support to improve your finances, browse the directory today to find the right coach for you.
