Budget management is seldom difficult for many people. Many times people don’t understand where and how should they spend their money.
Money management requires great discipline and will power. This may even sometimes mean controlling one’s wishes to a great extent.
You might have seen many people around you who make promises with the start of the month for spending wisely. On reaching the end of the month, they regret the ways that they spent their money. Some may even realize this midway which is even worse because they aren’t left with any money for the rest of the month.
Do you know what is the major reason for inefficient money management?
Prioritizing wishes over necessity. Some people don’t know how to control their addictions and will.
Few spend heavily on food. Others may like to travel a lot and these spend heavily on travel. Various types of addictions may eat up money for some other.
Whatever be the reason, each time when one sacrifices the need over will, regrets our bound to happen.
But why does it happen that some can manage their budgets well and others cannot?
The reason is simple, the former have control over their will. Many of the people belonging to this category have seen unstable financial conditions in the past. They understand that it is important to save for a rainy day.
Unfortunately, all of us don’t fall into this category. It is not easy to build the discipline and patience which is needed for proper budget management.
This is the reason that many people look to hire budget coaches.
Budget coaches are trained professionals who know how to manage budgets well. They know the reasons and pain points of the people who are unable to manage their budgets. With their coaching skills and expertise, they guide clients on pursuing their hobbies along with paying their dues on time.
Do your friends come to you for guidance on Budget management?
Do you know what skills and behavioral aspects it takes for spending money wisely?
Do you think you can guide someone on judicious money management?
Yes, Then that’s great!
It is the right time for you to translate your passion into a profession by becoming a budget coach.
This article covers all the points that you must know for becoming a budget coach. Before we dive into the depth let us first understand what is budget coaching.
What is Budget Coaching?
Budgeting is the process of creating a plan to spend your money. This plan varies from individual to individual. Creating this plan or budget in advance allows you to manage your expenses in the right way.
Budget coaching guides one to make an effective plan. The coaching guides you to prioritize your spending. It helps one to focus on the things that are most important to him/her.
Budget coaching helps people to avoid falling in the traps of debt. If someone is under debt then such coaching can also help to clear it.
With the help of a realistic budget, coaching helps in long-term financial forecasting. Budget coaches guide people not only to meet their needs but also save an amount for vacations, retirement, or emergency.
Who is a Budget Coach?
A budget coach is a trained professional who guides people to plan and execute their budget plans. Each budget coach has a coaching philosophy based on which he/she coaches the clients to manage their expenses well.
Through effective coaching sessions, budget coaches help clients to manage their money and save for their future goals.
To understand better let’s understand who is a budget coach and who is not.
Who Is a Budget Coach and Who a Budget Coach Is Not
Let us understand who is a budget coach and who he/she is not.
A budget coach doesn’t control your ways of spending
Many people have this misconception that budget coaches will ask them to stop spending in certain areas of their will. This is completely false. Budget coaches never control how someone spends.
The golden rule of budget coaching is that you must not spend more than you earn. Budget coaches guide clients to adhere to this golden rule. Budget coaches tell clients what is normal/average spending for each expense. They will also tell the ways one can save money. Along with this, such coaches also highlight where one is being very optimistic or unrealistic.
A budget coach doesn’t manage the client’s money
A budget coach doesn’t manage the client’s money for him/her. The job of budget coaches is to help the clients develop habits and skills that are needed to succeed financially. Such coaches empower the clients to save more than they could on their own.
Though budget coaches educate and equip clients to achieve more, they don’t do it for them. The work is of the clients and they are accountable for all their actions.
On average, a client can save $500 -$1000 monthly all by himself/herself. In this way, clients not only achieve what they thought was impossible but also get a feeling of accomplishment.
A budget coach doesn’t force his/her goals on you
Budget coaches don’t impose their own goals on the clients. Doing this can remove a sense of ownership and responsibility in the clients. Instead, the coaches understand the clients’ goals and build an action plan to help the client to achieve them. When the clients set and reach their own goals, they feel a sense of accomplishment.
A budget coach is not judgemental
A budget coach is not judgemental about the financial condition of the client. He/She knows that all of us struggle with financial instability. Good coaches are empathetic while dealing with clients.
Many of us make the wrong decisions in life. Proper money management is not everyone’s cup of tea. Many people face tough situations that take them into heavy debts.
Budget coaches are experienced professionals who can relate to the conditions of different clients. They give personalized coaching to the clients as per their unique condition without judging it.
A budget coach empowers you
The budget coach empowers clients through tools, support, education, and accountability. Such coaches act as mentors who walk beside the clients on their journey to financial peace. They help the clients to overcome obstacles so that the clients can overcome them in the future. Budget coaches act as a solid support system when one’s self-belief and confidence try to undermine his/her progress.
What Skills Do You Need to Become a Budget Coach?
If you want to coach others, you must be able to plan and manage your budget well. Coaching is different from mentoring. You must have the qualities of a successful coach. Along with it, you must have great coaching skills to be an ideal coach.
Specific to the budget coach having the following skills will be an advantage:
Honesty is really important for any coach. So it is for budget coaches. As a budget coach, you must be honest with your clients as well as to yourself. Planning a budget and adhering to the plan requires honesty and accountability. Only when you have honesty in yourself, you can coach others for it.
Most of the people who are unable to stick to their budgets lack discipline. You will get clients who ran out of money because they lack self-discipline. Till the time they realize the negative outcomes of this, it is already too late. You must be disciplined as a coach. Also, you must know how to make your client disciplined so that they can spend in a wise way.
You will get clients that are trapped into huge debts. You will hear stories that will amaze you about how careless people are with money. You must not be judgemental about anyone’s financial situation. Nor should you blame a client for the wrong steps that he/she took in the past.
You must have the empathy to relate to the client’s situation. This will help you to discover more about the client and his/her situation. An empathetic attitude will also comfort your client to share his/her deeper feelings with you.
Clarity about once goals/needs
Are you clear about your own goals and needs? If no, then it will be difficult to coach others for the same. As a budget coach, you need to guide clients on gaining clarity about what, why, and how they want. If your clients lack clarity they would never be able to differentiate between their needs and luxuries. This would always welcome regrets about expenditure.
Ability to prioritize
As a budget coach, you must be excellent at prioritizing things. This is what you need to coach your clients. If you can prioritize things, you can inspire your clients too. Effective money management is only possible when one sets the priority list. The list should have needful items in the decreasing order. It is also important to prioritize savings for tackling difficult situations in the future.
Any coach must be excellent in communication. Communication is the only way that you can connect with your clients. Along with writing and speaking skills, you must have great body language. Your attitude must be comforting and inspiring.
Who Can Be the Ideal Prospects of a Budget Coach?
Are you wondering who should be your ideal prospects?
Let’s find it out.
Singles can be one of the ideal prospects for budget coaches. Many singles fall into the debt cycle due to a lack of discipline. Over the last few years, retailers and financial institutions have made it easy to fund the short-term money fix. This increases the chances of long-term pain of debt. You can coach singles for better money management.
Many young souls sacrifice their needs and goals over short-lived desires and aspirations. Often the parents also fail to develop discipline in their young children. They lack a sense of responsibility. These often fail to manage their finances in the quest to fulfill their desires.
You can decide to coach such young adults and guide them early in their lives. You may also involve the parents to know about the financial dynamics wish surrounds the adult.
With your budget coaching sessions, you can teach young adults the importance of money and how can they achieve their goals and aspirations in the best way.
Families can be your ideal prospects. Coaching for singles and coaching for an entire family has a huge difference. The latter will cover budget management for each member as well as for the whole family. Here you would coach each family member so that the family’s expenses altogether are managed well. You may have to deal with members with job insecurities, different values, and principals that drive the expenses of the family, etc.
How to Become an Amazing Budget Coach?
There are many budget and money coaches in the market. What makes you different?
You must have your unique coaching techniques to outperform your competitors.
Let’s have a look at points that you must include while coaching clients.
Understand the situation
Listening is the key to understand different financial situations. You must be great at personal finances but don’t presume. Every client has a unique financial story. Don’t just listen for the sake of responding. Listen so that you can ask the right coaching questions. In this way, you will be able to get to the root of the problem.
Provide information and tools
If you think that your client is poor in maths, you are wrong. Managing finances is not related to Maths but the behavior department. Your clients may be spending heavily on impulse building and retail therapy. All these need to stop if they want to control their finances. You can provide your clients with effective budgeting tools like 7 Baby Tools and EveryDollar.
Injecting hope is very important. As a budget coach, you will get clients who are completely broken. They would have strived to bring a change but unfortunately were not ble to do so. They are looking for someone who can help them mold their habits and behavior for better. That someone is YOU.
Encourage your clients and remind them that they need not to stay where they are. Put yourself in the shoes of your clients and think about what would they like to hear.
If you are thinking of becoming a budget coach, you have already got the heart of helping people. At the same time, you must make people follow plans by taking action for themselves. You must also know when to say “NO”. “NO” is a complete sentence in itself. Never feel guilty to say it.
Avoid giving quick answers
Sometimes, your clients may ask you questions and expect a quick answer. For instance, a client may ask – “Should I sell my bike to clear my debt?”
In this case, you might think that the answer can be an easy “Yes”. But hold on. You must know the context behind before responding. Invite the client for a one-to-one coaching session. Navigate the situation deeper. Have a detailed look at his/her finances. You may come up with a way to clear off the debt and save the bike as well.
Be aware of your limits
It is ok to say “I don’t know”! Never try to talk about things that you lack knowledge of. You need not know everything beneath the sun.
Seek the advice of professionals, family, and friends before coaching your clients on something that you aren’t much aware of. You can also refer your client to one of the professionals if the need arises.
For example, someone who is seeking advice on bankruptcy can be referred to a bankruptcy lawyer.
Common Budgeting Challenges and Problems
Budget coaches get clients that face some common budgeting challenges and problems. Let’s have a look at them.
You will get clients that are facing reduced income or low income. These people need to take care of their finances otherwise they can get into difficult situations. You must coach such clients to immediately bring their spending within their reduced income. As a budget coach, you can suggest some ways to help your clients.
- Essentials should be taken care of first. The client must be coached to pay first for mortgage, house, and food.
- Utility payment must be prioritized. The client must cancel packages that aren’t necessary. One should check the schemes that renew automatically.
- A budget coach must help the clients by suggesting extra sources of income. These can be babysitting, delivering newspapers, working as a freelancer, etc.
Really low income or no income
This can be one of the most difficult situations. In such cases, a budget coach must help clients with two things. First, to curtail the expenditure as much as possible and focus just on needs. Second, to quickly get another job or source of income. In this difficult time, one can lose all hope and take wrong actions. This can lead to regrets later on. So, you must support your client mentally and motivate the client.
Many of your clients will need your help to do away with their debts. Some people take further debts to get rid of the former ones. As a budget coach, your first job is to identify the reason which is forcing your client to take debt. Is it a serious financial demand? Is your client’s behavior causing the problem?
After identifying the cause, you must build an action plan to finish the debts. This does not means putting all the client’s funds into the debts to get rid of them. You must devise plans to take care of the present needs and coach the clients to keep some money aside each month to clear the debts.
If the condition is serious and there is constant pressure from the individual/company that lent your client, you can suggest your clients sell some assets.
Do You Need Any Certifications for Becoming a Budget Coach?
In the US, currently there are many uncertified finance coaches, money coaches, and budget coaches. The US coaching industry is currently not that well-regulated. Hence, coaching certifications are yet not a necessity.
More than coaching certificates, your skills, experience, and client testimonies matter. Still, before you go for certificates learn how to select the best training program.
How Much Does a Budget Coach Earn?
The national average salary of a budget coach in the USA is around $40,089. The amount that you earn will depend on several factors. This will include (but not limited to):
- Geographical location
- Market trends
- Your coaching skills and experience
- Your coaching business plan and marketing strategies
- Your coaching philosophy
- The way you price and package your coaching certificates
- Client testimonies
I hope you have got a lot of information about budget coaches till now. It is the right time to build a coaching business plan and start your budget coaching. If you aren’t confident about coaching business yet, you can begin as a freelancer.
Develop your coaching philosophy. Do some market research and analyze your competitors. Look for ways that can help you to outperform them.
Build effective marketing strategies to reach your target audience. Make the full use of social media platforms and take benefit from Facebook ads and social media marketing. Also, join networking groups and attend workshops/seminars.
Cracking ideal clients initially can be difficult but once you do it the journey will gather pace.