There’s a growing interest in the world of financial coaching which, among other things, helps clients build a better relationship with their money.
Because of the emphasis on the emotional and behavioural side of money management, as well as the complex relationship with money many of us have, I’m often asked about the crossover between financial coaching and therapy.
In our financial coach training course, we teach many tools and techniques to help clients address and transform their relationship with money. But a key idea we introduce and talk about throughout the course is the phrase 'coach, not couch'. This serves as a reminder that we’re building a coaching relationship with our client; we are not therapists in the conventional sense.
We may ask a client about their past, so that they become aware of how this has informed patterns of thinking, behaviours and beliefs. But we never analyse a client’s past – we only seek to learn from it. Our work is focused more on the present, and on establishing strategies and behaviours to enable a client to move forward to achieve their goals.
Whether clients see it that way is another matter. My clients sometimes call it ‘financial therapy’ because we’re creating a confidential, safe space that allows them to talk about issues they may not be talking about with their friends or even their partner. And this can feel deeply therapeutic.
The topic of money is shrouded in shame and guilt for many people
This can make thinking or talking about money stressful and upsetting – it’s not surprising lots of people simply avoid the subject. A financial coach is an empathetic listener who can help a client voice their thoughts, as well as providing support and practical guidance on how to make changes in their life.
For example, I’ve worked with an actor who often experiences a feast or famine cycle in terms of earnings. When a script comes through, her cash reserves are high and everything feels ok. But she can go through many months bringing in very little income, and these times had become problematic because of money decisions and commitments made during a feast stage.
Things like private education for her daughter that quickly became unaffordable when there was a significant gap between jobs. An exacerbating factor is the lifestyle that goes with being a successful actor. She socialises a lot, and with people who earn high salaries. And she lives in a house that these friends assume she owns because she’s never corrected them. She can’t talk about these things. She’s keeping up a façade that may be costing her life and dreams.
Was I doing deep therapeutic work with her? No. But was it therapeutic? Yes. The most significant aspect of our work was that my client had a space to talk things through, free of judgement, where she could hear her thoughts.
She gained insights and awareness throughout our sessions, that inspired her to make big changes in her financial life.
What’s essential is that both the financial coach and the client understand what financial coaching is and is not. This goes for both the therapeutic side of things, as well as the finance side of things.
Financial coaches coach – they do not provide therapy and they do not provide regulated financial advice. Contracting with a client at the start of working together means that clear boundaries are set and understood by both the client and the financial coach.