If you’ve thought that financial planning is for the wealthy, we’re here to make you think again.
Hi, my name’s Anna and I recently started as the Product Marketing Manager here at Claro Money. As part of the onboarding process, I received a session with our Claro financial coach. I have never done anything like this before and was a bit sceptical of the outcome. My friends asked how the experience was, and so I wanted to share my journey with you.
If you have ever considered a financial coach but wanted to find out what it’s like, then keep reading.
A bit about my background
Before starting at Claro I was working for a corporate bank for 5 years. And for whatever reason, I wasn’t that interested in investing my money. I was too wrapped up in working and spending my money socialising and going on holidays. I had an excellent benefits package and didn’t pay much attention to the details of it. Thinking about long-term financial goals was not on my mind.
Fast forward to today working at Claro. I have some savings but no investments and have yet to set up any personal benefit schemes. So this financial coaching session came at the perfect time. I was excited to find out what my options could be.
So let’s dig into my experience.
How to prepare for a financial plan?
Before the session, I had to provide my financial details for the coach to analyse. This information can be broken down into 2 key areas: existing finances and future goals.
Listing out my financial history
For the coach to understand my current financial situation, I needed to list out my financial history. The more in-depth data you provide, the clearer it is for the coach to build a picture of you. The type of information I had to provide including the following items:
- Any debts or loans
This proved pretty challenging. It was a bit of a shock to the system to see the total amount of money that I spend every month. It shines a light on expenses you might not think about are large but add up over time. This is why checking your spending regularly is useful.
Defining my life goals and events
The second part of the session was to list out any goals and life events I was planning for. This was the hardest part for me. Unless you are someone who has clear goals in mind for your future, then it can be difficult to think of everything. Goals can include:
- Children and childcare
- Saving for a house
- Starting a business
The list is endless and is unique to each individual. So what I found useful was to brainstorm ideas on a piece of paper. No one has the same route in life and so there is no clear cut way to answer this.
My goals included saving for travelling and buying a house. Goals don’t have to be huge events in your life. They can be things you want to work towards that might be smaller or more rewarding. You can have as many goals as you want, however they should be prioritised. Focusing on the top 3 initially is a good place to start and show what you need to save and by when.
What was my experience of working with a financial coach?
I’m not one to talk about my finances openly. But my experience with the financial coach was very comfortable. I felt at ease and so was happy to share my financial details with them as I trusted them.
We went through the information that I put into the system. This was to check my current financial situation was clear and understood. It helped to bring the numbers to life and ensure that the coach understood what I had and what I wanted. There was some information that I didn’t add correctly and so they guided me through why it needed to change. After I had finished putting my goals and into the platform I was shown some charts of my current spending and future planning that was really useful and easy to understand. It made it simple to see my current situation and what my financial landscape could look like in the future. Once we went through the graph together we talked about options to help me achieve my goals and life events.
We looked at different saving and investing options that would suit my lifestyle. On top of this, we discussed various protection schemes and the importance of setting up a will. This was the most eye-opening part of the session. We discussed options that are rarely discussed amongst me and my friends. So it gave me a new perspective on my finances. One of the most important things I learnt was how valuable it is to set up different insurances from a younger age. We also took a look at what my financial landscape would look like at retirement. This was interesting as it solidified the need to start making changes to put myself in a better position at retirement.
Before the session, I thought that I would be persuaded to buy certain products. My experience was completely different. The coach only provided information on the different options available. It will be up to me to choose whether I take action myself.
What actions am I going to take from the session?
Once I completed the session, I received a report. This highlighted what I discussed with the financial coach and what my goals I was working towards. It also listed out the key items that I could action if I so wished. There was no information on particular products to buy, so the report was not trying to sell me anything. I felt like I had been given the tools to make changes to my financial situation.
For me my main action items were:
- Putting money aside each month to save for a house
- Make sure there is a minimum of 3 months salary in an emergency fund
- To buy life insurance, income protection and critical illness cover
- Set up a will
Before this session, these action items would have been unheard of to me.
Would I recommend financial coaching?
Absolutely. There is a stigma that financial coaching is only for the wealthy. I say that idea needs to be challenged and changed. I learnt a lot about my current situation. But more importantly, the steps I needed to take in the short-term and for retirement. And the financial coach made it so simple to follow. I now have clear and easy steps to making positive changes for my future. Reading articles online or watching tutorials about finances isn’t as beneficial as speaking with an expert directly.
- Financial coaching isn’t as scary as it sounds and was actually useful for me and I think it can be for others.
- You don’t have to have a lot of money to do financial planning or talk to someone about financial coaching.
- The sooner you start this process the more beneficial it will be for you in the long term.
Remember, when investing, your capital is at risk.Tags: Coaching