Five financial goals a financial coach can help you with
8 Nov, 2021
Having financial goals can be incredibly helpful. It means you can focus on the things you really want to do with your money, and avoid getting distracted.
Growing your savings and investments and managing spending involves some short term sacrifice – but that is a whole lot easier to do when you know you’re doing so in the pursuit of a long-term goal.
We spoke to Claro Money, the financial coaching experts, to look at five financial goals that a financial coach could help you reach.
1. Save for an emergency fund
One of the most popular goals people have is to build up an emergency fund.
What’s it for? Well, it could be anything from your car or boiler breaking down, a veterinary bill, or even (another) smashed phone screen.
Without an emergency fund to dip into, you might need to borrow from friends, family or the bank if something happens. If they can’t lend you the money, or you can’t repay the bank and the interest starts building, you can be left in a sticky situation.
An emergency fund is like a buffer, helping to protect you from life’s bumps and scrapes, and it can give you peace of mind.
Claro estimates the average 3-month emergency fund for a single adult is £3000*. A financial coach will look into your outgoings to help you decide how much you’d like to save in total, the monthly amount you’ll put away, and what sort of savings account you’ll use. They can also help you to balance competing priorities and goals.
2. Buy your first home
Lots of financial coaching clients aspire to buy their own home, and are looking to save up for their deposit.
However, when you’re confronted with rent, travel costs and everything else on top, it can feel overwhelming trying to build a pot worth tens of thousands of pounds.
Where do you even start? How much do you need? Is there any help you can get?
Those are the sorts of questions a financial coach can help you figure out. They can help you work out how much you’ll need to save for your home, where you should save your money and how long it will take to get there. They can explain stamp duty, legal fees and the house buying process in detail.
They can also clearly explain the different types of savings accounts and government schemes that are available to you, so you’re confident in making your decisions.
3. Start investing
Gulp. Investing? That sounds risky. Is it for people like me?
One of our guiding principles at Boring Money is that we want to make investing possible for everyone. It doesn’t just have to be for those with a PhD in maths.
Anyone can invest, as long as they’ve got their emergency fund in place, and they understand how much risk they’re willing to take.
Investing comes with risk, as the value of your investments can rise and fall. However, over the long term, investing can be a smart way to grow your money, as the stock market generally outperforms cash savings over long periods of time. Investing also protects your money against the impact of inflation.
A financial coach will introduce you to investing, help you understand your risk profile and support you in finding investment themes and portfolios that might align with your goals and risk level. They’ll guide you step-by-step on how to get started, so you feel empowered and confident if you do decide to invest.
4. Save for a big event
Whatever’s coming your way in the future, a financial coach can help you prepare. This could be getting married, travelling the world, having a baby, or starting a business.
A financial coach will ask you about your timelines and priorities, and from there will help you create a realistic savings goal that fits into your budget. They’ll help you develop healthy financial habits that make saving that bit easier, and explain your savings account options to help you put your money in the right place.
5. Plan for retirement
Planning for retirement can feel daunting, and for a lot of people it seems so far away that it becomes easy to put off until another day. But if you keep doing that, then ‘another day’ ends up being too late, and you’re out of time to build up a decent pension pot.
A lot of people aren’t even sure where all their pension pots are. There’s a lot of paperwork and jargon, and pension providers are often difficult to deal with. Even those people that do know where their money is often struggle to figure out what to do with it and calculate how much is enough to retire on.
In fact, how much is ‘enough’ anyway?
There is no set definition, but there are ways to begin working out how much you might need. It will depend on the standard of living you aspire to, when you want to retire and what you invest in.
A financial coach can help you understand how to consolidate your pensions together to make them more manageable, figure out how much you actually have and whether you need to be saving more to enjoy the kind of retirement you want. They can also talk to you about your workplace pension, and explore if you want to take out a private pension alongside this.
If you find your pensions need a pick-me-up, then they should also be able to help you figure out a plan to start investing more and balance today’s financial needs versus those you’ll have in the future.
*Based on calculations using figures from 2020 Family Spending in the UK &
2016 Living Costs & Survey.
This article is supported by Claro, a financial coaching provider - more information on our financial coaching pages.
