Should you hire a personal finance coach to improve your money situation?
It’s been on my to-do list for a long…LONG time. This year I made a commitment to finally get better at managing my personal and family finances. Even better, I hired my first financial coach to help hold me accountable!
Improving my financial situation is a big part of my personal growth focus.
What most people fail to understand is that in order to make lasting changes to your money situation, you must adopt a better money mindset to sustain any changes that you make.
Hiring a financial coach was an important step in improving my money mindset and financial situation.
I hate that it took me over a decade of working and spending (okay, overspending) to realize that I need help to improve my finances, but nevertheless, I’m finally doing it.
A Quick Overview of My Recent Financial Story
In 2017, my husband and I pretty much upgraded our entire lifestyle with a big job promotion he received. That year, our gross family income was the highest we have ever seen in a single year.
After being what I would consider a working, middle-class family, our money situation drastically changed…along with our spending habits.
While we thought we were mentally mature enough to handle the wealth, we still managed to fall into the money trap of ‘living above your means’ that so many young couples find themselves caught up in.
We moved into a beautiful, but ridiculously expensive home. Then we purchased two luxury vehicles. We purchased new furniture and televisions. And of course, we went on family vacations to Disney and Hilton Head and the Caribbean.
Anytime I wanted something, I bought it. I stopped making grocery lists and budgets altogether. If I saw something at the mall that I liked, I purchased it without even looking at the price tag.
We paid for most of these luxuries in cash, rather than taking on credit card debt.
After spending years budgeting out our money each month to sustain our family of 4, it was so freeing to just spend, spend, spend without any immediate consequences.
Unfortunately, we failed to take advantage of our improved finances. We did a terrible job when it came to saving and investing.
By the end of 2017, our little windfall unexpectedly came to an end. We experienced a drastic, unforeseen reduction to our monthly income.
I like to think of it as the “money shower” being turned off right in the middle of lathering up with soap and getting some in your eyes. It was quite a burn.
Finally, We Decided to Hire a Financial Coach
With the reduction in income, we quickly had to adjust our monthly spending.
Finding ways to quickly cut our lavish budget was super frustrating. We renegotiated how much we paid each month for the house, limited the extracurricular activities for the kids, and cut way, waaay back on unnecessary shopping and entertainment.
It. Was. Rough.
A few months later, we found ourselves in another job-related move. We knew that this time around we had to have a better money plan. This money plan included hiring a money coach.
We needed someone to help us create a financial plan and hold us accountable.
The truth is that there is a lot about financial planning that I simply do not know. Hiring a coach has made it easier for me to become better educated.
What to expect when you hire a financial coach?
I can only speak for myself and my experience with my financial coach. My husband and are currently doing financial coaching for couples.
During our first session…
We talked about our financial goals and what we would like to get out of financial coaching. We discussed monthly payments and how the ongoing relationship would work.
Yes, hiring a financial coach is yet another expense to add to the list of expenses (note–we pay a little less than $150 per month as a couple). But getting serious about our finances was enough of a priority for us to warrant the cost.
The second session…
This session was all about getting financially naked. We pretty much came clean with our financial coach about every cent of debt, monthly expenses, monthly income, and the financial goals we envision for our family.
This was slightly uncomfortable for me because I grew up having been taught that you DO NOT share your financial info with ANYONE. Personal finances were a private subject. People are not supposed to know how much you make or how much debt you have.
So, not speaking openly about my finances is a part of my former money story but I’m working on changing that. Speaking with a financial coach was a huge step outside my comfort zone.
The third session…
This session consisted of our financial coach presenting us with a realistic financial plan based on the data and information we shared with her during the second session.
For the record, looking at the suggested financial plan and hearing my coach’s feedback was hard! So hard, in fact, that I had to make myself a drink and go to bed early after the call.
Having a financial coach all up in your financial business isn’t easy.
Having them tell you flat out that you are overspending and will have a hard time hitting any of your goals without drastic changes is THEEEE WORST.
However, it was candid feedback that we needed. It lit a fire under our asses and made us ump into action.
Benefits of Hiring a Financial Coach
We are about 3 months into our new financial plan. Our financial situation has not magically corrected itself overnight, but we have certainly seen progress in our financial mindset and the daily actions we take.
Here are a few of the benefits that have been most valuable:
We Established a Weekly Spending Budget
We now have a weekly budget for variable expenses that we try to stick to.
Variable expenses include things like groceries, eating out, and other forms of entertainment. Our variable expenses budget was completely out of control before meeting with the financial coach.
It’s still been hard some weeks to stay on budget, but we have seen a great bit of improvement.
We Established a Monthly Savings Goal
Our financial coach helped us come up with a realistic monthly savings goal. She also helped us to understand that we needed to either drastically decrease our expenses or bump up our monthly income to hit our goals faster.
We Created a Realistic Expectation for Our House Buying Goal
We sold our house prior to our last move and have been leasing homes for the last 3 years. We are ready to purchase a home again. Our financial coach showed us in real numbers what it would mean for our budget to make that type of purchase.
This information is really making us think hard about the price point for our next home.
Should You Hire a Personal Finance Coach?
If you’ve been struggling to manage your own finances and your money goals (checking, savings, retirement, etc.) are just not where they should be, then my answer is YES. Hire a financial coach to help hold you accountable.
It has been worth the expense to have a person more knowledgeable than me to answer my questions and provide much-needed guidance.
But I understand that not everyone can afford to hire a coach right now. If that’s the case, start with a good personal finance audiobook or some other less expensive financial resources like a budget tracker.
Making a big impact on your financial situation starts by taking one initial step. You’ve done that by simply reading this post. Now decide on your next small step and take it!