6 Reasons A Money Coach Will Help Get Your 2017 Financial Goals On Track
There are now coaches for everything: from what you eat to how you dress. And just as personal trainers provide motivation to jump-start a better fitness regimen or stylists help you select the most flattering silhouette, money coaches are emerging as a go-to resource to help achieve not just financial but overall life goals.
So how does this niche differ from other types of advisory and mentoring services? Money coaching is designed to help you better understand your relationship with money, in all its complexities. With renewed clarity you can address your current financial situation and focus on practical and attainable goals, like pursuing an MBA degree, going on a dream trip or saving for a new home.
It comes as no surprise that demand for this specific type of money guidance is increasing among all segments, from millennials to retirees. According to a recent intake survey by The National Foundation for Credit Counseling, in 2015 only three in five U.S. adults (59 percent) gave themselves a grade of A or B on their knowledge of personal finance. At the same time, three in four adults (75 percent) agree that they could benefit from advice and answers to everyday financial questions from a professional.
To learn more about Capital One's innovative new money coaching service, we spoke with Ayla Newhouse, service manager for Capital One Café. Ayla is a designer and Money Coach who helped create Capital One's Money Coaching program (which is free and open to the public at select Capital One Cafés, including in Boston, Austin and San Francisco). Here's her take on how money coaching differs from other financial and personal guidance.
1. Plain and simple: We all need to talk about our finances.
Talking candidly about how you spend and save—and how you'd like to change any behaviors—is a new experience for many people. But the coaching experience is all about starting this vital conversation. "It can feel freeing to finally talk about money in a welcoming, open and confidential space," Newhouse says. Unlike financial advising, which may push you to reveal your credit score or disclose your financial holdings, money coaching instead focuses on your life goals and the journey you intend to take to get there.
"When it comes down to money, I am sometimes consumed with paralyzing fear. Sometimes it's hard to get perspective when you're so caught up in the worry. But sitting down and creating an actionable plan, I realized I have everything lined up for myself," says money coaching participant Katie Lemons.
2. Money and life are more interconnected than you think.
While a traditional financial advisor may be great at getting to the bottom line and looking at your road to retirement, money coaching holistically looks at all of life's moving pieces to see the bigger picture. "Money and life are totally intertwined," Newhouse says. "For example, you could want to plan ahead to get an advanced degree, which is really about a value for education and a dream for your future—it's tangled up in that. Our goal is to untangle that, look at the short term as much as the long term, and understand why we want to go in that direction and how to get there."
For instance, health was one of the core values money-coaching participant Chrissy Carroll highlighted in her session. "When I'm creating a budget, it makes sense that I'm going to want to make sure I allocate money towards the things that make me feel fulfilled in that area—namely a few race entries, my gym membership and a food budget that works for my family," she says. A money coach helps her direct her energy toward fueling her health goals.
3. It reframes how you think about investing—in a positive way.
Megan Lathrop, a money coach who also helped develop Capital One's program, was drawn to the idea of money coaching after working with clients saving toward milestones like their child's college or a dream vacation. She noticed that these people primarily sought guidance on how to prioritize their goals, not how to choose a mutual fund. "My approach is listening to your priorities, and helping you better understand what's important in your spending and savings," Newhouse says. The simple act of mapping out your goals inspires confidence.
4. Coaches are there to cheer you on, not make you feel inadequate.
Unlike a therapist or counselor, a money coach doesn't get deep into your psychological beliefs. From a former business owner or researcher to a healthcare expert or tech pro, money coaches hail from a range of diverse backgrounds, which enables them to adequately educate clients from all walks of life. In addition, money coaches hold CTI or ICF life-coaching certifications that allow them to take a full-circle approach to both your life and your finances. For instance, Newhouse applies her background in helping people understand their own complexities—she previously founded a digital gratitude journal and coached clients through fears about romantic relationships—to instill a sense of confidence in your money. It all comes together to facilitate an environment that feels open and honest.
"Bank people tend to intimidate me; however, my coach was a designer and life coach, which made me immediately feel less anxious and more comfortable," said money coaching participant Christine Koh. To that end, there's no topic too big or small. While money coaches are often helping clients work through the financial impact of life's biggest moments, like marriage and children, often coaching is just as valuable for the decisions we need to make this month.
5. A one-on-one session lets you set the agenda.
Think of it like meeting your most unbiased friend for coffee. A personal session with a real person who is there to listen and ask the right questions goes a long way to kicking off working towards your goals. "[Customers] see one-on-one coaching as a way to move forward. They want to make smart choices, but they go online and there isn't a clear-cut answer for you as an individual. Sitting down with someone unbiased is super helpful and something unique that is offered in the informal Capital One Café setting," Newhouse says. The space is comfortable and as private as you need it to be, with warm lighting, and even blankets if you feel like curling up. "The location is a cool local hangout—in addition to coaching rooms, there are lots of people just hanging out drinking coffee at the Café," Koh noted.
This is where that big realization might occur. "Having someone to support you, to listen, is very empowering," Newhouse says. "I've witnessed this happen—they've hit on something very true for them and it helps them focus faster. A breakthrough moment." In talking about your hesitance to track your spending and truly "see" how much money goes in and out each month, perhaps you've finally acknowledged how your parents' relationship with money has influenced your own attitudes—and how you can move forward on a healthier path. Think of it as clearing the emotional fog of money.
6. It's actually—dare we say—fun.
For clients, using the creative Capital One coaching experience connects them with activities that hone in on future goals. Everybody's next step after the initial meeting is different— if your goal is to better track your spending, it could be starting to establish a monthly budget (a coach might recommend starting to use a handy app as "homework"). If your goal is refocusing personal values, the next step might entail inviting family and friends over for a home-cooked meal. Regardless, actionable tools and tactics are to follow in hands-on, pen to paper, actionable ways.
Above all: "Be clear on what your goal is. You have to trust in the process," Newhouse says. In fact, when existing clients recommend money coaching to friends, their number one recommendation is to come with an open mind.
For more information on Capital One's Money Coaching program in Boston, Austin and San Francisco, visit capitalone.com/local/moneycoaching.