Financial coaching
I’ve always enjoyed driving north into the Highlands of Scotland. In a previous supervisory role, I covered an area the size of Belgium with offices based in Dundee, Aberdeen and Inverness. I sometimes made trips as far as Orkney and the Outer Hebrides too.
Outside of work, I’ve holidayed in the far northwest coast of Scotland all of my life and I never get bored of the drive. Mind you, it’s a fair old trek, usually taking 7 or 8 hours, with breaks.
To attempt the journey all in one go feels overwhelming. It isn’t much fun and certainly wouldn’t be safe to drive that distance non-stop. I really like breaking it down into stages, or milestones, along the way. A breakfast stop-over in Perth, lunch in Inverness, sometimes an overnight stay in beautiful Ullapool.
It reminds me of the journey through life in general, peppered with milestones. Your first full-time job, buying your first home, relationships, children, career changes, retirement and so on.
Milestones are also a vital component of a personal development journey, such as financial coaching. Getting into a position where you feel financially secure for life can feel overwhelming because it’s such a long-term goal and there are so many aspects to it. This is where identifying milestones can help you create a roadmap for your financial journey. It breaks the overwhelm down into manageable chunks, helping you to prioritise and focus on one thing at a time.
Why milestones matter
If you think about the question “What must you do to achieve financial freedom?” what comes to mind?
In my experience, it takes a fair bit of thought before people feel able to answer this question. And, of course, everyone has a different answer.
There can be some practical elements like:
- Gaining clarity on pensions
- Building confidence with investing
- Reassurance that your money is safe
- Being as tax efficient as possible
- Knowing how much you can spend safely, without running out of money one day
But there are also likely to be some ‘best guess’ assumptions that need to be made:
- What’s a reasonable guess at life expectancy?
- What about interest rates and investment returns?
- What future lifestyle might you hope to live?
- How long will you stay fit and healthy enough to enjoy travel?
- What help might you wish to offer family or causes that you care about?
And often, there can be emotional elements of money to consider too:
- How do you feel about the balance between spending now and saving for the future?
- How intentional is your spending and do you allow spontaneity to help live in the present?
- How do you feel about investment risk and reward?
- What’s your relationship with money?
Discussing life holistically, through the lens of money, can lead to big insights and clarity of goals. But that can also generate a long ‘to do’ list when you start to realise what actions must be taken.
This type of work can be transformative for many individuals and couples, but the scale of change can be challenging. Financial coaching milestones can help break it all down into something manageable.
What this looks like in financial coaching
It’s important to recognise that whilst the context of financial coaching is money, the experience is really more about you as a person, or a couple.
When working with a trained and experienced financial coach, don’t expect immediate “quick-fix” answers to your questions. And don’t expect to enter a one-size-fits-all process either.
Financial coaching milestones should be personal to you, reflecting a journey towards an outcome that’s unique to you.
That means you should expect to do most of the talking, not your coach. Insightful questions and a safe space to think, reflect and get really clear on your goals is the starting point.
Working back from there, you can identify the milestones that need to be reached along the way. The sequence and priority of these are unique to everyone, but some of the most common milestones people create include:
- Find a better system of money management or budgeting
- Get really clear on my pensions
- Reduce debt and improve my credit score
- Learn how to invest
- Work out what income I need to retire on
- Understand my relationship with money
There are many others, but a combination of milestones like this will lead towards a bigger goal, such as knowing when you can retire, whether you can afford a career change or to set up a business, or the extent to which you can gift or spend more money.
My first session with new clients is usually a 90-minute Life Balance Consultation. This is not so much about the finer details of your finances, but rather, gaining real clarity on the bigger picture.
At the end of this session, individuals and couples leave with a clearly defined outcome, broken down into tangible milestones. Basically, we co-create a bespoke coaching pathway for your unique situation and goals.
Small steps create momentum
One of the biggest barriers to achieving any meaningful goal is overwhelm. When everything seems important, it sometimes feels easiest to do nothing at all.
You put off logging into your pension portal, delay making financial decisions or keep meaning to review your spending, but never quite manage.
Breaking a larger goal into milestones changes that. Rather than trying to solve your entire financial future in one go, you only focus on the next meaningful step.
Each milestone you reach builds confidence as well as progress. You gain clarity, tick something off the list and begin to trust yourself to keep moving forward. Momentum replaces procrastination.
A few well-chosen milestones, tackled one at a time, can be far more powerful than an ambitious plan that never gets started.
What are the milestones towards your financial goals?
You need to start by having a reasonable understanding of where you’re headed, before identifying the milestones along the way.
Ask yourself what would you like to be different in the future, whether it be 6 months, a year, 5 years or longer. When it comes to money, examples of desired outcomes that I’ve seen include:
- Feel less stressed and overwhelmed about money
- Get rid of debt or at least have a plan with a debt-free target date
- Build an emergency fund and start investing
- Gain confidence about when to retire
- Have a plan to leave employment and start a business
- Switch from full-time to part-time work
- Create a pathway to sell up and move abroad
- Get ready to start working with a financial adviser
Once you know what you’re aiming for, write down 4 to 6 key tasks that will help get you there. Don’t worry too much about detail at this stage, just note down themes, like better budgeting or pensions clarity. These are your milestones.
Then arrange the milestones in a sequence that feels right to you. What does it make most sense to begin with? Is it something small to build momentum, or do you need to achieve one task before starting another? This becomes your roadmap.
For each milestone, you can then break things down into small, manageable tasks. For example, if one of your milestones is better budgeting, a good starting point is to get really clear on where the money goes right now. That might involve tracking your spending for a while, or looking back at previous bank statements.
Summary
Just like a long drive to the Highlands, you don’t need to know every bend in the road before you set off. You simply need to know where you’re heading and what the next milestone is.
Whatever your financial goals, you don’t have to figure everything out on your own. A clear destination and some meaningful milestones can help, but you may also feel the need for additional guidance and accountability. A co-driver, if you like – someone to help you navigate, but you’re still in the driving seat.
If you’d like to explore what the journey could look like for you, I’d love to chat. Book a free 30-minute introductory call and we’ll discuss your goals, your current situation and whether financial coaching is the right fit for you.
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