How a money tracking app helps you manage your money with live coaching
Note from the editor: We have money coaches standing by to walk you through making confident money moves. Simply head to the home screen and select “Chat with a coach” to get started. What can a money coach do for you? Nav.it founder is here to help.
by Erin Papworth
Financial Coaching is a beautiful hybrid between therapy and financial literacy training. It’s not a highly regulated world so there aren’t perfect standards between coaches. However, the best coaches help their clients see themselves in the big picture of their money management, then break down their high level financial goals into micro-behaviors. They help clients identify their personal relationship to money, their blocks, triggers and general behavior.
They then craft the financial literacy training program (monthly) around the key areas where a person needs growth.
So here’s how a money coach inside the nav.it app can help you:
Mindset and Mentality
Gotta get your head right. We all have inherited money beliefs, triggers and habits from our parents, from our childhood and from society. Assessing what you want from your money and then what you actually do with your money is the first stage of greatness.
Do you want to grow your money into millions of dollars, do you want your money to sustain a comfortable lifestyle that includes travel, do you want to become a real estate mogul and own rental properties around your hometown?
What is actually happening now?
How can we train you mentally to get from your starting point to where you want your money to end up?
You have to know where to start before focusing on the end goal, even if the end goal has to be defined from the beginning. Do you want to feel more confident in your ability to generate money? Or do you need to reduce spending and live within your means? Pay off their debt? Buy a house?
Once you have the larger goals, we work backwards to break down the behaviors needed to get there.
All of people’s larger goals are affected by the small behaviors each day or week, and really the lifestyle they create for themselves. Just like physical training when you want to run a marathon but you have to start with running 3 miles in a row first, you have to start small to grow large.
If your goal is to live within your means but you tend to leave $500 on your credit card each month, then you have to start with the micro-activity of looking hard at your expenses and your relationship to those expenses each day.
Analyzing How You Spend and Save Can Help You Improve
And sometimes that takes just reviewing your transactions. Reviewing transactions and deciding which ones serve you or really drain you is a powerful way to identify WHY you are spending money the way you do. That facilitates deeper conversations about what lifestyle you want versus what lifestyle you are living.
Once you have the basics down and know what money is coming in and going out, the next step is taking some time to practice whatever habit change you’ve identified. Is it not allowing your kid to whine their way into extra toys at the store? Is it turning all the lights off at night before bed and reducing the heat to save on your electricity bill? Whatever you’ve identified as a micro habit you can build, if you give yourself even two weeks to try them, you start to reprogram your brain waves and feel like you can make a change.
Measuring Improvement and Tracking
The best part about money is that it’s really easy to set goals and measure your progress. If you said this month you want to eliminate 10% of your non-fixed expenses, it’s an easy calculation to see if you did it, especially with aggregator apps like Nav.it, where you can see all your transactions in one place.
If your goal is to save $100, you can set up an automated transfer throughout the month and then look at the balance at the end of the month to see if it’s in there. We are a species that function based on reward (positive or negative). When you see that money and are happy it’s in there, you literally get endorphins rushing through your brain rewarding you for your behavior and compelling you to do it again.
When it’s NOT in there, that is the true test of resilience. That’s when your brain wants to trick you into thinking the situation is hopeless and you can’t achieve your goals. That’s when a financial coach is there to help you recover and readjust.
Measurement and tracking is a key part of the positive reinforcement.
Seeing your savings accounts grow or your high interest debt reduce month over month reinforces the behavior that gets you there. The key is to realize you’re playing the long game with your habits and goals so setting realistic expectations is key as is allowing yourself to miss the mark sometimes. You’re not going to pay off $5000 of credit card debt in one month, but if you have a solid plan for each month, you could in 6 or 8.
Half of the job of the financial coach is to be there when the person ‘fails’, and help them see they can still keep moving towards their end goal. Just like life, you’ll have bumps and bruises on the road to happiness, resilience training is to know what to do in the bad times as much as the good.