10 Reasons You Need a Financial Coach - Part 1

We delegate lots of things for lots of reasons.  Do you have someone wash your car, mow your lawn or repair your cars?  You’ve probably said yes to many of these.  Here’s the deal, we are not masters of all. We know just a little about a lot of things. Does someone cut and style your hair?  Think about it.  Why do we pay someone for this service?  Simply put, I can’t get my hair to look anything close to what a professional stylist can do.  She is trained to cut, yes color J, and style my hair to keep it looking good.  I wouldn’t even try to bring scissors to my own head!

Sure I can wash blow dry and style my hair but I leave the cut and color to professionals.  Yes I can wash my car but it would take me half the day, a load of towels to wash, and an additional workout when I can simply pay $15 for someone else to do it in less than 30 minutes.

Listen, we outsource lots of things in our lives for various reasons.  And guess what?  If all of us weren’t such great delegators then we would all be out of work!  Isn’t it time you thought about outsourcing your financial management as well?

Here are 10 Reasons you need a financial coach

1.      You don’t like numbers or numbers don’t like you…

Many of us were never taught how to pay bills, manage our cash, or build a savings.  We were thrown out into the world, told to get a job, and never shown how to make it all work.  At the end of the day, we had debt, bills coming out of our ears, and now we can’t find our life vest to save our financial lives.  A financial coach can help you get organized, create a plan of action for your bills, and teach you how to create the future you desire.

2.      Managing money isn’t your strong suit.

All of us are capable of writing checks, paying bills online, or setting up automatic payments.  After all we are smart… J However, most of us don’t do it accurately, we don’t understand proper timing with cash in and out, or we are unmotivated to figure it all out on our own.  Face it, we need each other.  If you didn’t go to school for money management chances are you aren’t that interested in doing this work full time.  But your home requires full time attention just like your job.

Check back each week to get the rest of the tips!

 

Is it worth it?

Paying off debt is exhilarating!  Getting free of the bondage of debt gets me excited!  How you go about doing that may not be quite as exciting though if taxes get involved.  Read on if you settled debt in 2011.  Tax Day is coming April 16th and you need to be sure you are ready. Typically if you have old debt that hasn’t been paid on for more than 6 months I recommend you settle them.  But you must know that there can be consequences to doing that.  I believe the freedom of being debt-free is worth it though.  Let me explain…

Let’s say you have a $1000 debt that hasn’t been paid on for a year.  When you have the cash on hand you could settle that debt for $200 which means the creditor took a loss and you only paid $200.  You never have to deal with them again!  However, you may be responsible for reporting the $800 savings on your taxes as debt forgiven.  Which means your income for that year just went up by $800 and you now have to pay taxes on it.  If your tax bracket is 25% then you now owe the government $200 additional.  Therefore, in total for that debt you have paid $400.

It sounds unfair and some may wonder if the process is worth it.  I believe it is still worth it to pay off the debt.  You must protect your online reputation, pay the debts you owe, and make good on your commitments.  This is just a different way of going about it. The finish line is still there.  You just took a different route.  Knowing how the process works helps you develop your strategy for getting free.  Don’t allow the tax implication to stop you from your freedom.  Now go pay off that debt!