Considerations when Financial Coaching

Each person you coach has pre-existing financial behaviors, past experiences with money, and a unique financial situation. Due to these factors, the subject of money can evoke strong feelings and reactions in people; the educator must address these reactions.

Providing personal financial coaching services requires unique skill sets that bridge educational methodologies, subject matter expertise, behavioral finance, and psychological understanding. To bridge these fields effectively, financial coaches must possess cross-disciplinary skill sets from each area to help students work toward a state of financial wellness and security.

Childhood Influencers of an Individuals’ Finances

People’s upbringing directly affects their ability to manage money, how they feel about the topic, and the financial habits they develop. The relationship a person develops with money starts in childhood. Consider these 5 areas:

Financial Situation

Each child is born into different challenges that will have major impact on that child’s future financial situation.

Financial Behaviors

The behaviors they develop as children – influenced by parents, the environment, advertisers, and peers – are primary indicators of their future finances.

Financial Sentiment

Also formed at an early age are a person’s financial attitudes and beliefs, which in turn influence his or her willingness to work toward a more secure financial future.

Financial Education

Most kids will never receive a high-quality financial education. Parents and schools are failing to produce self-sufficient individuals.

Financial Management Systems

Most children will leave home lacking the basic systems they need to get off on the right financial foot.
Learning outcome considerations when financial coaching

Adult Influencers of an Individuals’ Finances

Financial behaviors, sentiment, knowledge, and management systems are just some of the considerations when financial coaching.  Each of these traits start forming in childhood and often solidify into habits by the time a person reaches adulthood. The problem is that, once habits form, they are difficult to break; therefore a person’s financial situation becomes harder to change as he or she matures.

Financial Situation

Many people make mistakes early in life that take many years to overcome, putting them behind in important financial areas they should address.

Financial Behaviors

Financial habits are formed young, and data show that people in general have common behaviors that take them farther away from financial wellness.

Financial Sentiment

As people age, they get more stuck in how they feel about their finances. Avoidance, fear, and worry are common sentiments people develop toward money.

Financial Education

Most adults never receive a financial education; instead, they get their money knowledge from unreliable sources like web searches, friends, and financial servicepeople who sell products.

Financial Management Systems

The data shows that many adults lack the financial systems they need to work toward their financial goals and make managing money easier.

Measurement considerations when financial coaching


Overcome the Financial Coaching Challenges

Although providing financial coaching services poses many challenges, those challenges can be overcome and you can make a real difference in people’s lives. There are important steps to consider when planning your practice and building the skills you need to provide financial coaching support that affects many areas of a person’s life. These are the main considerations when financial coaching to address:

Qualified Coach

The backbone of any program is having a coach with the skills to understand clients, diagnose problems, prioritize education, and provide accountability.

Design for Client

Understand your clients’ goals, financial situations, and life stages to help them most effectively work toward their personal goals.

Quality Materials

Materials should be developed around research-based educational methodologies and practical application.

Positive User-experience

Care should be taken to create a professional coaching environment for participants.

Reporting & Data-driven Modifications

Reports should be provided and data collected to analyze client progress and make modifications that enhance the process.