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Personal Finance Coach

A personal finance coach is a type of life coach who assists another person or persons in meeting their financial goals. Financial coaches, in comparison with financial advisors, don’t give financial advice such as suggestions around investment strategies or particular financial products and services. Instead, they help individuals understand how to implement better money habits, such as how best to pay down credit card debts or how to identify which bank accounts offer the best solutions for that individual. The goal in financial coaching is to help teach financial literacy in order to set up those who utilize the service for long term financial success. A personal finance coach does not have to be limited to just one individual. Partners can utilize the same personal finance coach to make sure that they are on the same page regarding financial decisions.

Deciding to work with a financial coach can be beneficial to an individual in a number of ways. Financial coaching is about teaching and upholding positive routines. Rather than falling into bad habits, individuals can rely on personal financial coaches to help them develop good habits around money management. Financial educators aim to help individuals understand the thought process behind their financial decisions, so that they can arrive at rational and informed conclusions. This means that individuals who utilize financial coaches can have advice on both short term and long term goals, such as setting up a monthly budget and paying off student loans.

Personal financial coaches are also useful for partnerships, both in romance and in business. A financial coach is an objective third party who can help mediate financial decisions and make sure that everyone has the same strategies and goals in mind as they continue the partnership. Coaches can give recommendations around how to have financial discussions in the most useful ways, so that no one feels left out or unheard. This can go a long way in preventing arguments around finances.

Banks and financial institutions can benefit from having personal finance coaches on staff for mean reasons, including:

  • Improved customer relations: Establishing a personal relationship with an individual or couple will generally result in them having a more favorable view of the company as a whole. After receiving customized advice, individuals are more likely to believe that the company understands them and are therefore more likely to continue doing business with them.

  • New revenue streams: Having personal financial coaches on staff opens new revenue streams for banks and financial institutions. This service allows people who may otherwise feel put off from financial services, such as those with low credit scores, to instead feel comfortable knowing that they are getting personalized recommendations.

  • Increased opportunities for upsells/cross sells: As the individuals who utilize financial coaches become more financially literate, they are then more likely to need further financial services. Once they have a better understanding of their spending habits and the ways to improve, they may start looking for new opportunities, such as a mortgage or utilizing a financial advisor.

  • Competitive advantage: As more banks and FinTechs pop up every day online, financial institutions need every advantage they can get to stay ahead of the curve. Personal financial coaches can be a beneficial when properly marketed and utilized.
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