A friend of mine has been working with a money coach. She says she’s been getting a lot out of it, but I’ve never even heard the term before. What is a money coach? How do they work? What should I look for when it comes to choosing one?
Growing up in London, Ont., I was never very good at sports. I was a bit pear shaped and preferred to crack jokes on the sidelines than race after the soccer ball. So it was a great surprise to me when I completed my first marathon in 3 hours and 47 minutes.
How did I do it? I had a coach—Michael Brennan at Marathon Dynamics. He helped me figure out my goals, developed my training plan and then held me accountable to actually follow it.
I have had coaches in many area of my life over the years—career, public speaking, swimming, even nutrition—and have seen first hand the difference that they can make. A money coach works in much the same way. They help you figure out your goals, work with you to develop a plan and then help you overcome the hurdles that will inevitably get in the way.
Money and the mind
A money coach has a broader role than a traditional financial adviser. Sheila Walkington, a co-founder of Money Coaches Canada, says a key component of her job is “to help clients deal with the psychology of money; to help them shed their negative attitudes and bad habits and motivate them to get a grip and stop self sabotaging their financial goals.” Not surprisingly, that is ground on which not all financial advisers are willing to tread. They may not feel comfortable having those conversations and, if they are paid on commission, they aren’t directly compensated for them either.
Dealing with debt
Money coaches can also help clients deal with debt, providing strategies that will help lower spending and minimize interest costs. Again, financial advisers who make their living selling investment products may not have the time or inclination to help clients get out debt, even if that would make the biggest difference to their financial health.
Paying a fee for service
Most money coaches work with clients one-on-one and customize sessions according to their needs. For example they might provide advice on investing, making big financial decisions, or dealing with marital conflicts around money. The fee coaches charge depends on the length of the relationship and the amount of work the coach does to prep plans. It could range from $250 for a single visit, to a few thousand dollars for multiple visits over the course of a year. “I don’t charge by the hour,” Walkington says of her practice. “I generally quote a fee for service to work together to create and implement the plan over about four months.”
Hiring the right coach
There is no official designation or regulatory body overseeing money coaches and they are still few and far between in Canada. Some have extensive training, some even have their certified financial planner designation, but then there are others who don’t have these credentials.
The most important thing is to figure out what you really want to get out of your sessions and then interview a couple of people to see whom you think will best be able to deliver on your needs. Many coaches offer complimentary consultations, which are a great way to get a sense of the person and the process.
A kick in the butt
Perhaps I could have run my first marathon without the help of a coach. But it was really worth it to me to pay someone to provide expert guidance, inspiration and the occasional kick in the butt to get me to my goal. Perhaps a coach could you provide these very same benefits in the area of money.