3 Reasons Why You May Need A Financial Coach

It’s amazing to me how God knows which doors to close in order to open new ones in our lives. When I look back to my first year of dental school in 1996 and then fast forward today, I NEVER thought I’d be doing the things I am now.

If you would have told me I’d become an author, blogger or speaker on a national level, I’d have thought you were crazy. Public speaking used to be one of my biggest fears.

And now a new door has opened that is in perfect alignment with the ones that have closed. Recently, I’ve completed the training to become a Financial Coach through the Dave Ramsey Master Training Program.

When I look back through the rear view mirror of my financial life and how I started out in a HUGE hole with debt, it’s clear to me now why I need to take the knowledge from my screw ups and pay it forward to prevent others from making them as well.

It’s actually one of the MAIN reasons I started this site in the first place.

My goal today is to discuss the in’s and out’s of financial coaching and if it’s something you may need to help your financial future.

But first, let’s take a look at another area that comes us quite a bit among doctors…Financial Advisers.

Financial Advisers – Do We Need Them?

There’s been a lot of talk among some of the main doctor finance sites regarding Financial Advisers and whether or not we need them.

The White Coat Investor addresses this in, “What You Need To Know About Financial Advisers.”

Some of the topics he covers are:

The Physician On Fire has an entire resource page to use when attempting to choose an adviser – Recommended Financial Advisors

Passive Income MD also has a list of Recommended Financial Advisors on his site as well.

My Dilemma

As this site as grown to thousands of monthly visitors, occasionally many of you reach out and ask questions regarding a financial situation or need.

To be honest, I felt a bit guilty giving out advice (not financial services), especially since I didn’t have any type of “designation” behind my name. I’m a periodontist and the only letters after my name is DDS. So, in a sense, it worried me a bit without having CFP, CPA or EA after my name.

It was at that point that I started looking into something that I could do (besides using what I’ve learned through the School of Hard Knocks) that could make myself a bit more reputable when answering questions.

For me, it came down to two choices:

Financial Professional/Advisor or Financial Coach

What Is A Financial Coach?

I like Garrett Philbin’s definition of what a financial coach is on his site, Be Awesome Not Broke.

He states that “the goal of a financial coach is to educate clients on the basics of personal finance and, as a team, create a spending plan that reflects the values and goals of the client.”

“The coach then empowers clients to take responsibility for their decisions, supports their continual learning and growth, and serves as an accountability partner throughout the process.”


personal-trainerOne of the most valuable aids a financial coach provides is that they empower or motivate others to make smart financial changes.

It seems that most people could use a little motivation according to recent research:

One of Dave Ramsey’s team members, Chris Hogan, does a great job of motivating the “average American” to become a millionaire in his book, “Everyday Millionaires.”

When you think about it, a financial coach isn’t much different than a personal trainer that motivates others to push through the pain for the reward of having a healthier body.

Both of these people will:

  • figure out where you’re at
  • determine your goals
  • decide the best course of action to accomplish goals

Financial Plan

Another goal of the financial coach has to do with long term success. They help create healthy money habits by establishing a financial plan that reflects their client’s goals (i.e. asset allocation, estate planning, etc.).

After developing the plan, they provide accountability because too many people fail to accomplish their goals due to lack of implementation. The financial coach is there for support.

3 Coaching Steps

You’ve probably heard the phrase, “different strokes for different folks.” No two people are the same, so it doesn’t make sense to try to force every client into a “cookie cutter” program.

With that being said, some may only need a few coaching sessions over a period of a few weeks whereas others may need more.

No matter the length of time, the entire process usually revolves around three steps:

  1. Budget – Most people don’t know how much money is coming and going each month so it only makes sense to set up a budget. This helps to define the financial situation and makes tracking the spending much easier.
  2. Goals – The next step is setting financial goals. Again, each person is different. For yours truly, my goals once I completed my residency was to start an emergency fund, begin the process of getting out of debt, become a millionaire and eventually become financially free.
  3. Accountability – The last step is to determine the length of time that accountability should be built into the plan. Some clients may feel that they only need a few sessions while others may need to set up a longer schedule. It could also involve a 6 or 12 month check in period.

What Is A Financial Advisor?

Financial advisors have gotten a bad rap lately in the doctor-finance world. I decided to take a test drive with one to see what all of the noise was about.

A good friend of mine is an advisor in my area and he allowed me to go through the new client experience that they offer.

I was under the impression, like many of you, that advisors strictly manage money to get the best return for their clients. Yes, this is something that they shoot for, but NOT the only thing.

To be honest, I was pleasantly surprised to see how much detail goes into the process on the front end to determine the needs BEFORE any type of investments are recommended.

This is extremely important to start with before funding any accounts. For instance, it wouldn’t make sense for someone to fund 529 plans for kids’ college when they haven’t started saving for retirement.

There are certain steps to take regarding the investment process and the advisor can assist with that process.


All financial advisors are not the same. They get different degrees and certifications.

Some of the designations are:

  • CFP – Certified Financial Planner
  • CPA – Certified Public Accountant
  • EA – Enrolled Agent
  • CFA – Chartered Financial Analyst

Advisor Planning

Advisors help develop a game plan that puts you on track to achieve your goals by creating strategies for building wealth over the long term.

This is especially important for the non-DIY investor. Honestly, even if you invest yourself, I encourage you to meet with a few advisors to see what they could offer you regarding your particular situation.

During my planning experience, we discussed several topics such as:

  • amount of money needed to save to accomplish goals
  • different types of accounts that should be funded
  • insurance options (life, long-term care, etc)
  • estate and tax planning

I never recommend investing in something that you don’t understand. It’s for this reason that your advisor should have the heart of a teacher. Their job is to both recommend and educate at the same time.

This is no different when I see patients for the first time. My job is to give them the knowledge they need to make the best educated decision.

The Difference Between a Financial Coach and a Financial Advisor

A financial coach does not manage your investments for you. Instead, they focus on educating and helping you make financial decisions so that you can build the skills you need to manage your own money.

You always remain in control of your money, but you learn how to make better financial decisions and manage your money in a way that works best for you.

A financial coach does not sell investment products such as:

  • mutual funds
  • stocks
  • bonds
  • retirement accounts

They also don’t give specific investing advice – such as buy this mutual fund or stock, as they are not licensed to do so.

Financial coaches educate clients on how investing works and the best time to incorporate it into their financial planning.

A financial advisor, on the other hand, is licensed to provide specific advice for your investments. You give them control of your assets and they manage the money you already have.

The Coaching Process

One of the first things I learned during my coaching training was that most clients are initially nervous. The thought of not knowing what to expect can make anyone nervous in any situation.

In order to break the ice, I find that it’s best to send information that can reduce their fears which covers “what to expect” during the initial appointment.


During the initial coaching process, most coaches will ask for a few forms to be completed before the first appointment.

One form is a money snapshot that tells the coach:

  • income earned
  • debt owed
  • concerns and questions for the session

The other form is a basic budget sheet. A budget is simply a list of everything you spent last month. Because most people don’t budget, many times these forms are filled out only because the coach asks for it.


The fee structure varies between the advisor and coach as well. Advisors typically charge their fees based on a percentage of asset under management (AUM), as opposed to coaches who typically charge a flat retainer fee.

There are some fee-for-service advisors as these tend to be more popular in the white coat investing space.


Another important difference has to do with the licensing process. Again, coaches are not licensed to provide financial advice like advisors are.

What they can do instead is provide basic advice on the concept of investing. For instance, they can suggest starting an emergency fund in a high-interest savings account, but they can’t recommend a particular account.


How long do you need a coach for? What about an advisor?

The final difference between the two is the time arrangement. Most clients hire a financial coach on a limited time arrangement. Again, everyone is different.

Some may need a coach for only 2-3 sessions, whereas others may need several months or longer. Remember, the coach’s job is to help educate and provide enough knowledge that the client can then manage their own finances in the future.

Advising, on the other hand, is typically set up as an ongoing relationship. In many cases, the advisor meets with clients once or twice a year and continually manages their financial portfolio for them.

Do You Need A Financial Coach?

When I started this blog in March of 2018, my goal was to help other docs and white collar professionals not make the same financial mistakes I’d made in the past. Providing articles on a weekly basis, to me, is a form of financial coaching.

Becoming a financial advisor is something that may turn out into a second career for me in the future, but for now, financial coaching allows me to continue with my practice while helping others with money problems.

Take a long hard look at your current situation.

If you need help with budgeting, getting out of debt and/or setting up a financial plan so you can retire in style, then consider hiring a financial coach.

If you think you can do it on your own, more power to you.

Need More Information?

Interested in Financial Coaching?

email jeff(at)debtfree.com for more information