What is financial coaching?
Recently, coaching has become a very popular method for helping people deal with their issues by applying very individual approach. However, there is a lot of misunderstanding and confusion about the different approaches towards learning and development. Coaching, mentoring, counselling and teaching are all focused on support, direction, performance and well-being in your career or your life. But even if they are very similar and overlap each other without very clear-cut borders, let me highlight some subtle differences between them.
Teaching is the ancient method of passing knowledge by explanation and instruction. A teacher usually works with a group of learners, which may vary in size from a few to dozens of students. (There is also a variation of teaching which is tutoring; tutors work most of the time with one student or a very small group of them).
One of the undeniable advantages of teaching is bringing students very useful knowledge and life skills. Teachers are responsible not only for knowledge in its strictest sense but also for building character in their students and for overall support.
Luckily, nowadays our children are more and more experiencing a “learning through play” or “learning through exploring” approach in schools. However, for generations that wasn’t the common trend and we haven’t really had this chance before, because teaching is traditionally limited to the things already known and perceived as widely and generally acceptable. There isn’t much space for exploring and finding new solutions.
Big groups are also a drawback, as a one-to-one model allows the student to access much more material, the learning process can be monitored on the go, correction applied immediately, and overall progress is much quicker.
However, it’s very good solution if you want to learn a new skill. A financial course led by a financial education teacher could be a very effective way to gain knowledge on managing finances and investing.
Counselling provides people experiencing problems or issues with an opportunity to speak about them freely. As a professional with an objective viewpoint, a counsellor helps their client explore the way they are thinking or feeling about themselves and the issue at hand.
Financial counselling is mainly related to credit, debt and crisis support.
Another approach is Mentoring. A mentor passes their gathered knowledge, experience and expertise onto a mentee. They always care about the progress and overall wellbeing of their proteges, and guide them through difficulties, many of which they have probably experienced themselves.
An indisputable advantage of having a mentor, when you chose them wisely, is that you can learn a lot and achieve your goals quite quickly. It is mutually beneficial, as a mentor also learns from their mentee (very often they become friends).
Having a mentor skilled in the financial market, investing, or active on the real estate market, would be extremely useful if you want to follow in their footsteps.
Coaching is quite a new approach and is mostly about task and performance. A coach will take you from the place you are to the place you want to be, which can be in many different areas of your life. Their task is to ask such many useful, targeted questions which lead their coachee to a solution. This method is based on a few convictions:
- everyone is an individual different from others;
- everyone’s problems/issues are different;
- everyone needs different solutions for their problems/issues.
Because of this, coaches are skilled at drawing their client’s solutions out of them, most of which are already there.
Imagine a room with only one chair in it, situated at the back. Now, imagine a person telling you about their issue: “The chair is at the back”. Naturally, we are ready to help with a quick solution. What was the first thing that just came to mind? Most people would say: “Well, let’s move the chair to the front then”. However, it might NOT be a solution, or rather it might be a great solution for one person but not necessarily the right solutions for our subject.
In this case, it might be that the chair needs to be moved somewhere else, or maybe it needs to be brought outside of the room, or maybe the person should stand next to the chair, or maybe some other chairs need to be brought into the room, or maybe a pink elephant is supposed to sit on the chair, or… are you following? We do not know what the real solution is and because everybody is different and has different needs, the correct solution for this particular person will be something different than for any other.
This is the moment when a coach steps in, armed with their skills, techniques and tools, to fight limiting beliefs and find the key to the right door where the solution is locked. Moreover, they will help their coachee even further, by setting goals and monitoring progress.
Nowadays, coaches specialise in various areas of life and business. You can find a personal or life coach, performance coach, skills coach, career coach, business coach, executive coach, and so on…
Who is a financial coach then? A financial coach is an individual who works with you on managing your money effectively, on improving your financial situation in a set time, and on dealing with debt or other issues which hinder you in your financial life.
Financial coaching is essential in the modern world, especially when most of us suffer from a very common syndrome called WIMM, which simply put means “where is my money?” Can you relate to that? 😉
As we know, money is integrated into our economic system and very often affects our personal lives. We cannot really do without it, but we can learn how to manage it better to have far less worries and live a fulfilled life.