Unlike financial advisors, life coaches empower individuals to cultivate the mindset and behaviors essential for navigating the right financial path and managing their financial affairs successfully. The life coach's focus is on making good lifestyle decisions that support financial goals, giving individuals a sense of control over their financial future.- BY INGRID JOHNSON

Long-term financial planning is not just about money. It is about developing the right mindset and healthy financial habits that support good financial decision-making and management over the long term to reach goals. This emphasis on mindset and habits is crucial, as it helps people identify and set long-term goals, budget, develop positive financial habits, and make consistently positive financial decisions in their personal and work lives. It also helps them remain motivated and develop confidence in their ability to succeed. Financial wellness is an essential element in general well-being and quality of life, providing a sense of security and preparedness.

Unlocking a Balanced and Prosperous Life

Financial stress can create significant imbalances in life, affecting health and relationships. It is directly linked to health conditions such as high blood pressure, disrupted sleep, anxiety, and fatigue. Financial stress can strain relationships and, for employees, lead to decreased productivity, lower job engagement, and increased absenteeism. It can also contribute to low self-esteem.

The role of a life coach is distinct from that of a financial services professional. While the latter guides investment strategies or retirement plan selection, a life coach's focus is on empowering individuals to achieve financial wellness. This is done by exploring their thoughts about money, their relationship with money, and behavior patterns that impact financial wellness. The process can be empowering, as it encourages individuals to recognize their weaknesses and develop new ways of thinking and behaving to meet financial goals. It is about gaining control and self-awareness to improve the quality of life.

It is easy to get confused about the difference between what a financial life coach and what a financial advisor or financial management professional does. Financial coaches work with people who believe their ways of thinking about and managing money need adjusting and repair. The life coach assists people who want to develop the ability to reach financial goals but are having trouble doing so on their own.

People’s relationship with money can be fraught with issues. For example, a chronic over-spender or someone living paycheck-to-paycheck never has money to put into savings. Some individuals never set financial goals, do not know how to budget, or believe there is plenty of time to plan for retirement “later,” and later never comes.

A Global Human Need

By sharing an unbiased outside perspective, the professional financial coach can identify client issues that the client knows exist but is unsure how to address. For example, the client is under constant financial stress but does not understand how to develop a strategy to identify and manage the stressors. Some people have difficulty adhering to a budget, routinely use credit cards for daily living expenses with no plan to pay them off, or never plan for financial contingencies like a major vehicle repair. This is a global concern, too.

A survey found that 64% of European Union citizens have a medium level of financial literacy and 18% a low level. Only 25% could answer 4-out-of-5 questions on financial knowledge. Other findings reported that 21% completely agree they set long-term financial goals, 43% track and monitor expenses, and only 50% set long-term financial goals and strive to achieve them.

In the United States, the amount of debt carried is rising and so are delinquencies. A Bankrate survey found that 36% of Americans would go into debt to take a vacation. Americans now owe more than one trillion dollars in credit card debt, and 45% carry a balance month-to-month. In the Southeast Asia regions, a study across six markets found that 54% are not investing their money, and just 40% are saving up to 10% of their incomes. The conclusion was that there is a need for more financial literacy and financial planning.

There is a psychological aspect to financial well-being. A study of 449 Chinese university students found that mental budgeting, financial literacy, and self-control favorably influence financial well-being. People with financial literacy are more likely to achieve superior financial well-being. The researchers said a mediator can be crucial in connecting the factors leading to financial well-being.

An Ongoing Process

Life coaching for financial wellness is a process. It is not a one-time workshop. The life coach works with a client on an ongoing basis to address the areas of client need and ensure the person stays on the right path. For example, the life coach may track expenses for a month to identify patterns. There are discussions on perspectives or attitudes about finances, spending habits, and emotions driving financial decisions. The goals of financial wellness coaching include identifying the client's financial goals and developing a plan to reach them, assessing whether the current path a client is on will lead to a financially stable retirement, looking at cash flow and lifestyle in the context of financial health, and managing financial stress with resiliency and determination.

A life coach can help clients develop clear financial goals for saving, investing, debt repayment, and retirement. The coaching sessions help people overcome psychological barriers concerning money, like fear of failure or lack of confidence. New habits are developed. Personal and financial goals are aligned. For example, clients may identify how a desire for vacations fits into retirement planning goals or the desire to get out of debt. The life coach holds clients accountable, which increases the likelihood of success.

Financial stress and lack of financial planning impact personal and work lives. Employees experiencing financial stress experience lower productivity, psychological distress, and more health issues. Some employers offer benefits such as access to a life coach. Work goals and financial wellness are related. For example, some people will only consider employment with a company if benefits include retirement plans. Someone may want to travel or buy a house, so they want to work for an employer offering benefits that support achieving financial goals. This is why a life coach helping people develop financial health is a lifestyle coach, too.

“I was so bad at managing money…”

Shifting through limiting beliefs about money is the first step toward creating a realistic financial plan. A life coach is a support person who can help individuals stay motivated while working through financial challenges. A life coach does not give financial investing advice but offers a holistic approach to financial planning so clients can develop habits for a lifetime of financial success and leave their financial angst and worrying behind.