Question

How can an understanding of each of these disciplines (financial planning, financial coaching, and financial therapy) contribute to an improved financial planning process?

Answer 1

An understanding of the disciplines of financial planning, financial coaching and financial therapy can significantly contribute to an improved financial planning process.

The understanding of discipline of financial planning will give an individual direction as well as structural meaning to the financial decisions that are being taken by him/her. An understanding of this discipline will make the individual aware of the need as well as the importance of managing money in such a manner that it will enable the individual to reach life goals and provide finances for milestones like education of children, marriage of children, buying a house, saving for retirement etc.

Understanding of financial coaching will lead to improved financial planning process as well. Financial coaching is the integration of financial concepts with theories of coaching psychology. Through an understanding of financial coaching one will be able to achieve their goals by focusing on performance improvements as well as on behavior change. Thus through an understanding of the discipline of financial coaching one will be able to appreciate and then develop skills as well as behaviors that are needed for achieving financial goals. This will streamline the financial planning process.

Financial therapy involves integration of different aspects of financial well-being. These aspects are cognitive, emotional, relational and behavioral. An understanding of the disciplines of financial therapy can help to identify and then eliminate patterns of financial behaviors that are not proper and that can lead to distress and anxiety. Financial and money related disorders can be identified easily and this will improve financial planning process.