Very few people are conscious of the need to have a mentor they look up to on financial matters and money issues. It is an especially important aspect of your journey to financial excellence and is important in growing your wealth and attaining financial freedom.
Anyone who wants to achieve financial freedom, retain, and grow his wealth must deliberately look for and adopt financial mentors.
In certain circumstances, a financial mentor may be available to also act as a financial coach, but this is rare. The common occurrence finds that people have mentors whose financial behaviors and achievements motivate them to be better financially. The coach takes the relationship a step forward. He takes it beyond the ‘mentee and mentor’ relationship. The coach helps develop the appetite, knowledge, and skill for good money management. Under the tutelage of a coach, one develops a nose for good investment and attains independence in decision making.
To achieve the desired level of financial height, you need both a financial mentor and a financial coach.
Herold Financial Dictionary defines A financial mentor as ‘‘a trusted guide or counselor that helps a person in the arena of business, personal finance and investments’’. It further states that ‘’Mentors can be many different people, but they typically have several characteristics in common. They are all loyal advisers who have the person’s best interests at heart’’.
Another definition by Wikipedia says, ‘mentorship is a relationship in which a more experienced or more knowledgeable person helps to guide a less experienced or less knowledgeable person’.
There are numerous benefits of working with a mentor and coach in achieving financial excellence. A financial coach helps clients develop plans to achieve their goals, then act as an accountability partner as the clients enact their plans. A financial coach will help you understand the basics of personal finance and help you develop and maintain healthy financial habits. The main job of a financial coach is to empower you to reach your financial goals and learn how to handle your finances responsibly.
Financial coaches help their clients with the basics of money management. Their goal is to help their clients develop healthy money habits that will last. Financial coaches also educate their clients on the basics of personal finance and work with them to create a financial plan that reflects their goals.
The objective of the coach is to improve the client’s long-term financial behavior and facilitate clients to set and achieve financial goals on their own. He further helps clients practice new behaviors and monitors those behaviors over time.
Who needs a Financial Coach? A person struggling with his finances in specific areas will do good to work with a Financial coach to achieve desired goals. E.g., a person who is struggling to get out of debt.
On the other hand, Financial mentors provide a one-on-one service, focusing on empowering people to get control of their money. They work alongside a person building trust that gives the mentee the confidence to take the right decisions over time in the area of business, personal finance and investments.
Financial Mentoring vs. Financial Coaching
Let me explain the difference between financial mentoring and coaching, as both appear to have some overlaps. A financial mentor will teach you financial tactics and strategies based on his experience to guide you from making mistakes and financial errors while working to attain your financial goals. A financial coach will walk with you ‘step by step’ on your journey towards financial independence.
A financial mentor supports you based on his relevant experience and will advise based on specific financial issues. E.g., you want help with investing in a new business opportunity/area. Your mentor will share insight on his choices and consequent results from a previous similar opportunity.
On the other hand, a financial coach will work with you to create a plan for your money and help you take actions that will keep you on the right track to achieve what you desire. Financial coaching may include hand holding support for specific areas of your finances. Examples of such support include helping to prepare your financial plans, produce a personalized budget, identify poor money habits to drop, and agree good money habits you need to adopt. A financial coach can also work with you to design a template to apply to get you out of debt.
So while focus is on the Financial Mentor’s knowledge and experience in a mentoring relationship, the focus is on you in a financial coaching relationship. It is about your current financial circumstances versus your desired financial goal. The financial coach will focus on actions you need to take to achieve your desired goal. The objective of the coaching relationship is to ensure you remain on the right track to get to your desired goal.
While you can have a quick discussion with your mentor on a critical financial decision, receive his steers and understand the risks and returns in particular opportunities, a financial coach will remain by your side nudging you to take the steps and actions you need to reach a goal (e.g. coaching required to get out of indebtedness will involve sessions on building and adhering to your budget, saving better and paying off the debts.)
Conclusion
Let me conclude by advising readers to deliberately seek for financial mentors to help them make excellent financial choices. I also recommend that you get a financial coach to guide you as you work towards your financial targets. Financial coaching is not only relevant when you are doing poorly with your money, but also a requirement if you want to do better and get excellent results with your efforts to wealth creation and retention.
There are some financial coaches offering free services while there are others who require payment. If you choose to use a paid financial coach, make sure the terms and deliverables out of the coaching are well articulated and agreed upfront. Take deliberate steps to seek and connect with a financial coach.
I offer FREE financial coaching services and will be happy to work with readers who need such support.
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Well said. You learn from your Mentor’s past pains and you avoid his mistakes.
Great article. This means that most parents are more of financial mentors than coaches.
Absolutely. You get lucky if your parents have the knowledge of financial literacy.