Life coaching The meaning of money What is life coaching? Life coaching is the newest, fastest and most effective way to reassess and rework any area of your life. What a personal trainer does for your body, a life coach does for the rest of your life. Your coach will meet you, get to know you, discover what areas of your life you feel dissatisfied or confused about, then help you develop a strategy for improving them. After an initial meeting, most coaching is done by telephone, with your coach pushing you, encouraging you, and generally watching over you and making sure that you turn your plans into action. Coaching is not therapy. 'Coaching is more pragmatic and goal-orientated,' says Eileen Mulligan, our life coach for this series. 'We don't focus on the roots of problems, but on their solutions.' Whatever your problems, the techniques of life coaching can help you become your own life coach, and give you new and effective ways to deal with them. Eileen Mulligan shows you how to sort out your financial life Many people have a problem stripping down finances. By that, I don't mean reducing your finances, but simply taking a close look at what they are, and how far you expect them to go. Like every other area of your life chart, there is no universal scale as to how much money is enough. Most people go through life convinced that no matter how much they've got, it's never enough. I say this with some confidence, because I've coached several millionaires, and their issues are no different to everyone else's. Before you begin Forgive me for going back to basics, but I'm often amazed at the number of people who seem determined not to get the simple things right. Draw up some columns showing how much you have coming in, and what you have going out . Do the same with bank statements. Is your overdraft going up? Are you managing to save? Divide your outgoings into necessary expenditure (mortgage/rent; essential bills, food, loan and hire purchase repayments, standing orders, etc). In the next list, put things that aren't essential (clothes, entertainment, recreational habits like drinking, smoking, CDs, etc). Be honest about how crucial some outgoings are, because if you're looking for ways to reduce your outgoings, you need to know what is really essential. This way, you can see how much disposable income you have left. There's no point chasing your tail every month, juggling with money coming in and going out. If you're in control of your existing finances, you can start to set some goals. If you're not, you need to get them in order before you can progress. If your finances are seriously out of control, get some help - from your bank manager, financial adviser or Citizens Advice Bureau. How much is enough No matter how much you earn, money can remain an issue, and you may still be stuck in the cycle of not thinking you earn enough. If you live in a bedsit, your goal might be a one-bedroom flat. Once you've got that, you might want a small house, then a bigger one, then a garage, then a pool might be nice… On and on it goes, and if you're not careful, you won't even enjoy the latest upgrade - you'll be too busy going after what you think you haven't got. If you want to have control of your finances, it makes sense to have your priorities in place. Attitude affects a lot of the issues you have with finances. It helps to get a few ground rules in place and some clear ideas about what you are going to do with your money. Try answering these questions: • How much money would be enough? • What are the major problems I face? • What am I doing to change/improve my situation? • Do I work to a monthly budget? • Am I planning for the future, eg pension schemes, life assurance and savings? • Can I see any patterns in my financial status? • Do I enjoy my money? After looking at these questions, and before you fill in your list (below), you need to make sure that your current finances are in order. Knowing your value Being well-off is often high on people's value list. To a lot of people, it is the most tangible expression of a person's security. It's an obvious link, and yet, regardless of financial status, you might not experience or enjoy that security. The question you may not have asked yourself is: What would it take for me to feel secure? Leave finances aside for a moment. Instead, examine the other key areas of your life chart: • Health: Would an annual check-up make you feel secure about your health? • Spiritual life: Would a strong belief make you feel secure in your faith? • Work and career: Would a supportive boss make you feel secure in your work? • Personal relationships: Would a loving partner make you feel secure? • Family: Would a supportive family make you feel secure? • Friends/social life: Would a good social life and loyal friends make you feel secure? The point of asking these questions is to make you think about your relationship to money. Just as money can allow you to enjoy the finer things in life, it can also stop you when it dictates every decision you make. When you value all the key areas of your life chart, it will affect the financial decisions you make and goals you set. When you appreciate that your life is worth more than just your financial value, it gives you the courage to move forward. The list If you've been following this life-coaching course, you'll know that the List is at the centre of each lesson. On a piece of paper, write down these five headings: goals; personal strengths; immediate challenges/ blocks/problems; development skills; achievements. Now begin to fill in your list under each heading using these guidelines. Goals: This is the time to return to the question 'What would make me feel financially secure'. Be specific, as it will help you set appropriate goals. Your goals are the things you want - so don't be tempted to make a list of the things you don't want. Don't list things like 'Stop overspending', or 'Stop feeling under pressure to keep up with other people' - those are for your problems area. Under this section, list the things you do want, eg start a pension plan; save for a holiday; work to a budget; increase my income; put aside £100 a month. Personal strengths: It's important to get a rounded picture of your financial situation, and of your attitude to your finances. Certainly, you'll have some problems or blocks, but it's important to see that this is only part of the picture. List the strengths that will be most useful in achieving your goals. For example: 'I'm good at saving'; 'I'm a generous person'; 'I am in a pension scheme'; 'I don't spend beyond my means'. Immediate challenges/blocks/problems: These are the things that stand between you and your goals. Some examples include: 'I overspend, and have debts'; 'My overheads are too high'; 'I don't earn enough'; 'Clients never pay me on time'; 'My work situation is very insecure'. Break your problems down as you work through them. So if you feel that you don't earn enough, consider how much would be enough, then ask questions, such as: How can I change things? What can I do to improve this situation? Development skills: This is where you identify areas which will help you achieve your goals. For example: 'Learn to monitor my finances on an ongoing basis'; 'Get some financial advice'; 'Be less concerned about keeping up with others'; 'Find out what training I need to increase my value at work'. Achievements: I always stress how important it is to list your achievements. Focus on achievements that are consistent with the goals you have set. You're looking for strengths to support your goals, skills to achieve them, and achievements to help boost your confidence. Some examples of achievements in your financial life might be: 'I've shown that I can repay my debts'; 'I've learnt to be less worried about money'. Setting a value How much is your time worth? When it comes to placing a financial value on yourself, you are worth exactly what you will accept. You have to feel comfortable with the value you set for yourself. The first thing I tell prospective clients is my fee. If it's a problem, I'll let them know about other coaches, who are considerably cheaper, so they can choose. I was once consulted by a barrister, and at the end of our conversation he said, 'I must say, I think you're very expensive.' I replied, 'I must say, I don't. I'm completely comfortable with the fee that I charge, and the value I place on my time.' The issue of the fee wasn't my issue, but his. He called me back and became a client. Final checklist • Take a close look at your finances. • Watch out for patterns - eg your income has increased yet you still have an overdraft. • Your finances are your responsibility. • How much is enough? • You are worth what you think you are worth.