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What Does a Money Coach Do?

Posted by admin on January 16, 2008 in Misc.

(Continuing this week’s Guest Week, I asked Nancy Zimmerman, a money coach, to comment on what actually a money coach does given it is increasingly seen as part of the personal finance landscape. Nancy was gracious enough to post the following- the headings are my own edits.)

NANCY ZIMMERMAN, THE MONEY COACH: MY STORY

Hi there. I’m a money coach. The short story is I was rather a financial disaster in my twenties – the kind you read about in the paper: chronically broke, deep in debt, no savings, and RRSPs? Not likely! This was despite having a reasonably good job, a university degree, and in most other areas of my life, pretty “together”. When I got my credit card (oops! forgot to pay it for a couple months) cut up in front of me by the high-school aged twerp behind the til, I decided it was time to figure out this money stuff. So I did. I vowed three things:

1. Always to know where my money was going

2. Never to bounce a cheque again, much less have credit card disasters

3. To own my own home by the time I was 40 (this felt impossible at the time)

It took 2 years to conquer the first two, but I did. I started some simple habits (tracking my spending, making reminders to myself of bill due dates, and saving for emergencies and events like Christmas even though I had debt) and slowly but surely, my financial life took shape.

Then the next phase started. A girlfriend and I got it in our heads to start a women’s investment club. None of us had any financial background, but honest-to-god we never made less than 18% in any given year, during the 5 years we were together. For the first time, money became exciting for me, instead of only about getting out of debt. My investment results also yielded goal #3: I bought my dream home, a loft in gastown/dtes, Vancouver well ahead of schedule.

WHAT IS A MONEY COACH? AND WHAT DO THEY DO?

Four years ago, and ten years into having pulled things together on the money front, I launched myself as a money coach, helping others through the same process I went through. I’m not an investment advisor; I don’t give advice on portfolios. I also am not a formal debt counsellor (i.e. I don’t negotiate payment plans etc.). But for all those Canadians who are trying to grapple with day-to-day cash flow issues, I have some solutions to offer, borne of hard-won experience!

Who are my clients? A diverse group. I have several clients who earn well over $100K a year. I have clients who are middle-income earners trying to balance hockey fees for their kids versus increasing their RRSP contributions. I meet with lots of couples in which one is a debt-phobe and the other a spend-thrift (and yes, there’s a gender difference – ask me which is which, lol). Many clients also have a financial planner (although note to financial planners: many of them don’t truly understand their portfolio at all!). In fact many financial planners send clients to me, with the end result being I send them back, with a cash flow that now enables greater contributions.

Here’s how I equip clients to get to there. We meet bi-weekly for three months. During that time, clients:

1. Track their spending. Usually, what they thought they were doing with their money differs from what they actually do. This gives data for informed decisions about the second step:
2. Lay out and prioritize goals (family holidays, buying a home, getting out of debt) and create concrete, realistic action plans. (note: usually I need to do some binge-and-purge prevention regarding debt)
3. Create new banking structures to support reaching their goals.
4. Adopt counter-strategies for old, unhelpful habits (eg. retail therapy).
5. Clear out the emotional aspects of money, such as guilt about debt or overspending, or free-floating, paralyzing, anxiety about money.

I’m not hardcore in my approach (although I love Til Debt Do Us Part); half the battle is simply helping clients relax and discover their own latent competence around money. Generally, my role is complete within three months.

Fees? I personally charge $100/session, and if we’ve each done our part of the job, the client inevitably saves much more than that within a year, using the plans we make together.

MONEY AS A SOURCE OF EMPOWERMENT

A few hundred clients later, I remain moved when people open up on this very private front, because they are determined to make their money a plus in their life rather than a source of anxiety. My ultimate hope for each of them is that money becomes a source of empowerment and encouragement — and that as they develop a more reflective stance toward their money, they choose to spend in ways that are life-giving both for themselves, their communities, and our planet.

Imagine if Canadians became known for being wise and thoughtful with our money. Known for being in a position to give generously to developing countries. Known for opting out of relentless consumption in favour of empowerment with our money. As we thoughtfully blog about it, and some cases specifically provide services about it, we just might head in that direction. Go Canada!

Thanks to Nancy for this post. Nancy’s blog has been linked above, her business’ site, your money by design, can be found here. Kindly direct any questions about money coaches to Nancy directly.