[Guest post by Ashley Drake]
Talking to a stranger about your finances can be a little nerve-wracking and is not something to take lightly. A lot of us have grown up in an environment where money is personal, and it is not commonly discussed with others. You have probably heard of financial advisors who help manage money, but who helps the people who haven’t yet accumulated wealth and need help getting on the right track? Who helps the people in tough situations to see the correct path forward? This is where a financial coach, like me, comes in. Let me tell you about a client I work with so you can get an understanding of how a financial coach can help.
There was a realtor who was in desperate need of some safety and security in her finances. She was a young professional who had already seen a lot of success and had a healthy, but unpredictable income. Over the past few years, she had been able to build up a large savings account and started investing in the stock market. She came to me really overwhelmed because in just 6 months she had spent over half of her savings! She knew if she kept spending like she was, she would run out of money in no time.
She had a problem with how she managed her spending and was unable to solve it on her own. She has had times of very high income and had grown used to doing what she wanted when she wanted to. She drove a nice car, had nice clothes, and experienced every concert and vacation she could. Although most of the time she was ok and able to cover her expenses, she was starting to feel out of control with her spending. Suddenly the market took a turn and now her income was down. The good news was her savings account was not completely gone, and she still had a solid 6-month emergency fund left. She had done well for herself, especially with a single income. If only she could conquer her terrible spending habits.
She followed a lot of accounts on Instagram and had been consuming personal finance content in all her spare time. It was time to start a budget and get a real strategy for how she could rebuild and help her get toward her goal of early retirement. She knew she had to do something, quickly, so she reached out to me, knowing I was a financial coach.
A financial coach is someone who helps build healthy money habits. They help you learn how to manage your money and help set goals for the future. A financial coach will walk with you throughout your journey and make sure you have an accountability partner. Also, someone to talk to about all the emotions and feelings that play into managing finances.
When this client reached out it was not because she needed someone to tell her to set up a budget, she already knew that. The problem was that she needed someone to show her and help her through the process. She needed someone else’s eyes on her complete situation. It was time for an expert to help her lay out a specific plan that she can follow and then hold her to it. She needed someone professionally trained who would be there for her, listen to her, and help hold her accountable.
In a few short coaching sessions, she was able to develop a plan to get her on the right track. She made progress quickly. The budget was established, and a tracking method got implemented. Early on she paid off a credit card with $4,500 and refused to spend on that card ever again. She took that card and one other retail card she had and put them up high where she would not be tempted to use them. In just a couple of additional sessions, she was ready to live off only her debit card!!! Amazing progress.
With a budgeting and tracking system in place and only a debit card in hand, the real work was ready to begin. The true behavioral transformation happens in the daily choices and habits. Her coaching sessions will not stop just because the budget is created. Changing habits is not easy and does not happen overnight, but it can be done. A coach will work with you to closely monitor triggers and work to interrupt the normal spending/stress responses. All she had to do now was stick to her budget categories. She knew could do this.
Are you working to improve your financial situation? Like this post and comment below if you have ever felt a little out of control with your spending. You are not alone. A coach can help.