by Nick Hager
If you are like most people, you never received a financial education in school, and financial literacy wasn’t a topic at dinner. Most of us learned about money the ‘old fashioned fashion way’ by picking up pieces of information along the way and learning through trial and error.With the fast moving economy, it is important that people minimize financial pitfalls and start working immediately toward their financial goals. Because the topic of money is increasingly complicated, there is a new trend of people working with financial coaches to ensure they have a long-term plan in place.
Today, most people choose their retirement investments based on what the person a few cubicles are doing or by viewing the past performance of a mutual fund is. Decisions made like this can be extremely dangerous and can lead to serious financial circumstances.
Financial coaching programs are helping people plan out their future and help them clean up any financial mistakes they made along the way. Coaches are financial education experts and help their clients pick up personal finance skills as they are working toward a more secure future.
There are financial education programs and financial literacy workshops you could use to educate yourself of money management matters. Once you reach the expert level of study – you may not need a financial coach, but until then it is strongly advised that you work with one.
Financial coaches can also act as a hub for information between other professional advisors. NFEC certified coaches have a broad range of expertise in the financial world and help to keep all the advisors and other professionals on track with your personal goals. Your Realtor gives real estate advice, financial advisors help you with the stock market and your tax planner is helping with your taxes – the financial coach monitors all these activities to ensure they are aligned with your short-term and long-term objectives.
Financial education is a critical component of the coaching process. Although some clients just want their coach to make the decisions for them other prefer to pick up the financial education knowledge along the way. Many clients report that having the knowledge themselves helps them feel more secure and confident with the direction they are heading.
These coaching programs can cover a broad range of topics – from investment strategies to paying off debt and improving credit ratings. A CFPC will assess your specific financial situation and design a plan and the actions steps that are necessary for you to follow.
Coaching can be a great resource for those going through financial challenges such as bankruptcy, foreclosure or debt problems. Furthermore, if you are ever getting a mortgage, car loan or deciding on a college plan a financial coach can help guide you through the process.
NFEC Certified Financial Coaching Professionals are not paid of their investment suggestions. Most financial professionals get paid based off what they recommend; and some will only offer products they get paid on. CFCPs’ are fee based coaches. This gives them unbiased loyalty is to their clients. They can refer you to prescreen experts, or they can collaborate with the team of people you currently have in place.
The process is straightforward, and you are in the loop throughout. A CFCP will have you complete an initial questionnaire and schedule a brief introductory call to understand your objectives. From there, they prepare your overall plan and fine tune that with your guidance.
After the plan is developed, the focus then turns to creating a step-by-step action plan for you to follow. They help and guide you through the process and can even act as accountability partners for those that need an extra nudge.
The main goal of starting a financial coaching program is to provide the guidance and financial education needed to ensure you will be able to do those things you dream of. CFCPs’ have a vested interest in your success and will help you stay on course with your overall plan.