I don’t know about you guys, but when I first started coaching clients, this is how I assumed my sessions would go. I would sit with a client, explain how money works or why this way of doing things was the smart way to do, they would understand exactly what I was saying, and then viola they would go take action. They’d experience a transformation. It’d be amazing! And instantaneous! They’d love me. I’d smile. We’d hug, BOOM! Another life changed through “financial coaching.”

It sounds amazing right? But the thing is, that’s not actually financial coaching.

What I imagined in my brain was more or less teaching. I didn’t know what coaching was, not in real life practical application.

And listen, if that sounds like you – it’s OK. I was certainly able to help a lot of people even with that approach. 

But once I embraced more of a coaching approach, I was able to help a lot more people. That help looked more like transformation and growth versus gaining more knowledge and deeper understanding. As coaches we know that knowledge without application and action doesn’t do a whole lot of good. It’s the application, the coaching part, that truly matters.

Let’s talk about how you can begin to flex your coaching muscles and turn away from teaching approach.

But first, if you’re a new coach, I want you to take some caution with this approach. I want to be careful with overwhelming new coaches right out the gate. If we’re not careful, even for our new clients, we can make the process of growth so overwhelming and daunting, they don’t take action. 

I want to give you the next steps in growing as a coach, but not all the steps.  This is where you start flexing your coaching muscle and we’ll refine it and grow from here.

The Financial Coaching Process

When you are financial coaching, you need to focus on education, application and commitment. Let’s break down what each of these mean and why they’re necessary to getting better results for your coaching clients.

• Education – We start with education because your clients are learning things about their money. They’re gaining new knowledge, learning new ways of doing things, and seeing their money very differently. So the first step has to be education.

• Application – Once they’ve gained knowledge, they then have to apply it. There’s only so much our clients can learn through the consumption of more information. At some point they have to apply it, and that’s where your coaching skills will really start to shine. This is where your clients will really lean on you. They can learn about money on their own. The coaching part is where we help them apply that knowledge.

Before we move onto the next step, let me note this. You will likely toggle back and forth with clients between education and application before moving onto the third step. The dance between education and application is really continuous learning, growth, learning and growth. 

You want your clients to APPLY what they’re learning. And each time they apply something, it will have both intended and unintended effects, which will bring them back to learning and so on. Eventually though, they reach the third stage.

• Commitment – They’ve learned something new. They’ve discovered what it means for them, and now they figure out what they want to do about it. They commitment to the knowledge and the action and really start to see results.

Coaching is helping a client navigate the development needed to reach a certain outcome. You are facilitating this process of education, application and commitment. You are guiding them and supporting them through the process. You are not controlling the process.

There are a couple of traps coaches often fall into that lead them back to a teaching mindset. Here’s what they are and how to move on.

Trap 1: Over explaining

Early on in your relationship with a client, you might do a lot of education. You might be teaching them how to budget, educating them on their net worth and savings rate, or helping them to understand student loan repayment options. You’ll be figure out what foundational knowledge a person needs to have.

But the trap here is getting stuck explaining and not moving on. You can fill their head with knowledge but at some point it’s too much. Action has to play a role. If not, you’ve fallen into teaching, not coaching, mode.

Trap 2: Controlling how the client applies the knowledge and/or the commitment they want to make.

In other words, controlling the application and commitment phase. This can look like thinking you need to determine their results. It can also be you telling them HOW they should do something, instead of leading them to what’s best for them.

You need to be not so rigid in your teaching. Even if you’ve thought of the perfect plan, it will fall apart if your client isn’t bought into it. If they don’t like the strategy you picked, they won’t commit to it. Being a good coaching is asking yourself, “Can I be flexible in giving them different strategies to deliver the same outcomes?” It’s picking the path that’s right for them. Not whatever appears to be the best. 

First, you need to commit to focusing on the “application” phase yourself. Commit to continuing to grow in this area of financial coaching. Even today, after more than a decade of financial coaching, I am still growing and learning. Coaching is all about growth so you want to fall in love with the journey of growth. 

Second, you want to practice asking really good questions. Here’s the thing- start in everyday conversations. When a friend says something, ask questions about it. If you work a day job right now and you’re having a conversation with a coworker, practice asking questions instead of sharing or telling your side of things. See how this transforms the conversation. This leads to the next commitment. 

The third thing I want you to challenge yourself with is this image. Instead of focusing on covering a wide array of topics in a session or in a program, I want you to think of the DEPTH at which you cover each topic. Answering the question flat out for you might be easier and faster. But we’re not going for the easy approach, we’re going for the BEST approach. We’re going for the transformative approach. That’s what financial coaching is.