Mark Twain once said, “The difference between the almost right word and the right word is . . . the difference between the lightning bug and the lightning.”
Take the words coaching and counseling. Some people use those words interchangeably when they’re talking about finances. But a financial coach and a financial counselor are not the same. There are lots of differences between them.
Coaching Versus Counseling: Which Do You Need?
One big difference between coaching and counseling is your financial status. Financial coaches help you build wealth by using solid money principles like budgeting, investing, saving, and debt reduction. On the other hand, financial counselors help you manage your wealth. They know the ins and outs of mutual funds, bonds, balancing portfolios, and other investing topics. They know how to help you keep and grow the wealth you’ve already built.
Here are some other differences between coaching and counseling:
Training. In the world of therapy, becoming a counselor requires years of classroom study plus years of supervised practice and a licensing exam. The same goes for financial counselors. They take classes, undergo supervised interaction with clients, and take certification testing. Lots of them have a degree in finance, too.
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Financial coaching doesn’t require this high level of education or testing. That’s because financial coaches don’t dive as deeply into financial matters, like individual stocks or the trends in overseas markets. Their interest is in giving you the education, confidence and tools you need to turn your finances around.
Time frame. Typically, you’ll meet with your financial counselor on a short-term basis. You meet regularly at first. After all, you need to make sure they are right for you. You’ll look at your investments and make adjustments based on your age and risk tolerance. After those initial meetings, you will touch base with your financial counselor a couple of times a year (or more) to check on your investments and other assets.
On the other hand, you may meet with a financial coach a lot more—even weekly over the course of several months. You might talk on the phone, email back and forth, and text each other, too. You’ll establish goals, create action steps to meet those goals, and evaluate your progress. You’ll have more interaction with a coach because the accountability is higher.
Accountability. If you need someone to hold you accountable for making a budget or getting rid of your debt, then a financial coach is your best bet. Coaches follow up with you on a regular basis to make sure you’re moving forward. They’ll also give you a swift kick in the right direction if you need it! Financial counselors assume you’ll follow through with the plans you’ve made.
Whether you work with a financial coach or counselor, you need to remember one thing: You are responsible for your money. You are in charge of whether you stay in debt or get out of debt. When you retire, you won’t be spending their money—you’ll be spending yours. So be wise when you choose who will help you, but always stay in the driver’s seat.