Remember the movie Rocky? Sure, Rocky Balboa may have been the greatest fighter of his generation. He had dedication, follow-through, and a reason to fight. Still, would Rocky have reached his ultimate potential without his coach Mickey?
A coach can view someone objectively to assess their strengths and help them work through their shortcomings. A coach is someone there for you, in your corner, when you're feeling beat up and dazed or triumphant.
Jon White of JW's Financial Coaching is there in your corner with you as you battle your debt. He gives his clients that objective stance that we all need to create a clear financial strategy.
Jon took a moment to tell us about financial coaching and to share some of the insight he's learned along the way.
For starters, could you introduce yourself? How did you get into financial coaching? What made you start the website?
My name is Jon White and I'm from Columbus, Ohio. I live there with my wife and two young sons. I got into financial coaching about 5 years ago because I kept seeing the need for people in my age group to get a handle on their finances and how this need was negatively impacting other areas of their life. I started the website mainly as a way to share my thoughts on money, and it quickly grew to a place where I would share my podcast, webinars, videos, and other thoughts on giving people a new perspective on their money.
For people who don't know, what is financial coaching, and what do they stand to gain from the process?
I think a lot of times, people see that I'm a financial coach and they assume that's the same as a financial planner, when in reality it's not. Financial coaching is part teaching and part encouraging. When it comes to money, a lot of us know what we need to do; we just don't know how to go about it. So a coach helps you walk through the process and empowers you to take control of your money.
You were born and raised in Ohio. What's the economy out there like right now? Are things improving? Are many people taking advantage of your services? What are a few of the biggest industries in your region at the moment?
Where I live, in central Ohio, the economy is great. Unemployment is under the national average and small business is thriving. During the heights of the Great Recession, Columbus wasn't hit as hard as other parts of the country, mostly due to the major employers being Ohio State University and the state government. There is also a growing underground of young entrepreneurs who are doing incredible things, so the future is very bright.
In the bio section of your website, you talked about saving with your then-fiancee to pay for your wedding and honeymoon in cash. Why is this a good idea, and how can this set the tone for the relationship to come? What kind of effect can personal finances have on relationships?
I could go on forever on how that's a great idea, but I'll try and keep it short. Paying for our wedding and honeymoon in cash was great because it allowed our marriage to get off to a great start without being burdened with debt. The first year of marriage is difficult enough, and when you add debt to that it multiplies the difficulty. I've seen so many young marriages being impacted by credit card and student loan debt that we decided to do our wedding without it.
This forced us to communicate and work together on money before our marriage even began! What a blessing that was. It also forced us to talk about our dreams and goals after our wedding day, and that got the discussion going on how we would handle our money after we got back from the honeymoon. What I always tell young couples is that when you have agreed on your spending, you have in essence agreed on your life; because that will set the stage for how you are going to communicate about money, how much you are going to give, and how much you are going to invest in your future.
You wrote a blog post recently about "The Latte Factor". What is the latte factor? How can little expenses add up to become major over time, and how much do people stand to save by looking at things like this in their daily lives?
The Latte Factor is a metaphor from personal finance author David Bach. The metaphor is that by watching and eliminating the small daily purchases - in this case a latte - over time, that small daily expense will become a lot of money. I like the metaphor because it gives people hope and encouragement to start to invest in their future. With that being said, I'm also for eliminating the big stuff so to speak. You could call it the car payment or student loan factor. Eliminating those common debts can go a long way as well to start to create some wealth.
You also wrote an e-book called The Major Components Of A Financial Plan. What are the major components, and how can someone tell if their financial plan is healthy or not?
The major components of a healthy financial plan to me include having a clue where your money is going each month, eliminating debt from your life, and giving money to causes that you have a passion for. There are other things that are important as well, such as having the proper insurance, investing for the long term, and having enough in emergency savings. But if you have a plan with your money, you're debt free; and when you are giving your time and money away, you are living a rich life.
I think you know when you have a healthy financial plan when you don't worry about money. If money is a sore subject in your home and it's something that's keeping you up at night, that's not healthy. But if you have peace with where your money is going each month, no matter how small or large your income is, that's not only going to lead to a healthy financial plan, but an overall healthy life as well.
You feature a section of free financial resources on your website. What are a few apps or websites that people who are serious about getting and staying out of debt should be using?
There are so many personal finance apps out there that it is definitely hard to keep up with all of them. I don't have a personal favorite or one I recommend. Whatever works best for you for tracking how much debt you have, when your payments are due, and keeps you motivated to pay it off is what you should use. With that being said, I'm also not against keeping track of it on Excel or a piece of paper.
Do you have any advice on people who want to live rich lives without spending every dime that they have?
Living a rich life to me does not mean spending money. I view money in our lives like a pie. We have a slice for our family, faith, career, physical life, mental health, hobbies, and leisure in addition to one for money. Now each slice will be a different size for everybody, but I've seen how not having control of our money impacts the other areas of the pie. But I've also seen how getting control of our money can impact other areas of our lives for the better. So living a rich life isn't about what we do or don't spend your money on. Rather, it is living our lives in the way we want to without money being an issue.
Getting on a healthy financial track is not an event; it doesn't happen overnight. Your financial coaching plan is a three month process. How does working with a client over an extended period of time help you help them? What are some of the areas that you go over during that time?
Like I always tell my clients, I don't offer a magic pill. It usually took a while to get yourself into a hole financially, and it's going to take some time to get out of it. Working with a client for the three months allows me to coach them through the whole process of finding out where they stand financially, identifying short- and long-term goals for their finances, developing a plan to reach those goals, and walking them through the process of setting up a monthly budget that works for their income if they aren't doing that already. It also allows me to help them through the down times; and when you start to do something new or different, there are always going to be some rough spots in the beginning. But it also allows me to be there with my clients when they first experience some positive momentum, and to encourage them to keep going.
The final paragraph of your mission statement reads, "Personal finance is only 20% head knowledge and 80% behavior." What are some examples of bad financial habits that people get into? What about good ones? How should people practice making good decisions with their money?
Well, everyone has their own bad and good habits with money. I think some of the more common bad habits I see include eating out way too much, spending their money on frivolous things that they don't even use in a month, and turning to debt in a time of crisis. A few of the positive habits I encourage include automation of your investing and giving, developing a monthly spending plan, and talking with your spouse about money on a consistent basis.
Making good decisions with our money takes time, and a lot of times it takes making bad decisions first. But it's like any other habit, you just need to do it; and after a while, it becomes second nature. No one is born a financial wiz; we all have to work at it. Some might have to work harder than others;but just like bad habits are easy to fall into, good habits happen after making them a priority and going through lots of repetition.