Many people are unsure as to what financial coaching involves. In this post, I interview one of my recent clients, who shares her expectations and experiences.
Emma Mills-Sheffield has recently become a self-employed coach and facilitator. Using skills from the business world and real-life experiences of rebuilding a life after grief, Emma works with people who want to do more – those who want to grow more, to give back and live a life of true purpose. You can find out more about her work at www.mindsetup.co.uk.
What attracted you to the idea of financial coaching?
I wanted to understand the relationship between business and personal finances. They’re so intertwined. It’s a case of needing to know how much money from the business we can transfer to the household budget. What’s the most sensible way of doing it? I’m very logical – I like a spreadsheet – so I was looking for a structure to help me think about what needed to happen.
I also needed to confront some of the previously unspoken issues: saving for a pension, putting aside money for tax, and building an emergency fund in case my laptop explodes.
Also, it was an opportunity to talk through big decisions such as whether I should be a sole trader or form a limited company.
So, it was about exploring all these areas to help me decide the right way to go. I needed a good grounding.
What did you expect from financial coaching?
I expected it to be very focussed on pensions and savings. What I hadn’t expected was the tools that can help me right now – for instance how to think about cashflow. I got a toolkit of stuff that I could use right away. I’d imagined that financial coaching might be more theoretical, but it was actually very practical.
I had expected to look at the past to examine my relationship with money, and that was very helpful in understanding my attitudes now.
What aspects were most useful?
As I mentioned, the toolkit was really useful, but it was also your experience in having used these tools yourself. You knew what would be useful, and when. You were aware of what would be happening in the future. There was a strong mentoring element, as well as the coaching. You got me to consider things I hadn’t thought of.
Were there any surprises?
I realised that I need to crack on with my pension! Ideally tomorrow.
Also, talking through the ‘limited company’ versus ‘sole trader’ issue and looking at dividend calculations made me realise I could earn more than I’d thought. I could earn more than I do currently, but pay less tax. And I can put a bit more in my pension.
After talking this through, it gave me the confidence to speak to an accountant and say “This is what I want to do, can you help me?” rather than just handing everything over to them. That made me feel that I’d get the right support for the next steps I was taking.
Did you find any aspect of the process challenging?
Considering the future and the long-term stuff. We tend to brush it under the carpet. But it’s important to be honest with ourselves and think about what’s going to happen when we’re old and grey. It was a constructive push and the right thing for me. There was no prying or judgement, so I felt completely comfortable – it was a safe space.
What are you doing differently as a result of financial coaching?
Planning better for cashflow, and also thinking carefully about what I need to put away for the future. So that’s definitely progress for me.
Do you have any tips for others on how to make the most of financial coaching?
Have a long, hard talk with yourself: “What about the future?” “What are my expectations, in terms of pension etc?”. Be really granular with your cashflow so you know exactly what you’re spending. Then you can start challenging it. You have to be honest with yourself first to get the most out of it.