Why You Need a Personal Finance Coach – Benefits & Is It Worth It?

Imagine Rajesh, a 35-year-old IT professional from Bengaluru, who recently realised that despite earning a handsome salary, he had little to show regarding savings or investments. 

Like many, he had been making financial decisions on the fly without a structured plan. This scenario is common in India, where financial literacy remains a challenge.

A 2024 survey revealed that only 39% of Indians felt well-informed about their financial situation. Given these statistics, it's evident that many could benefit from professional guidance. 

Engaging a personal finance coach, whose fees typically range between ₹3,500 and ₹7,500 per session, could be a worthwhile investment to handle the complexities of financial planning. 

1. Helps You Set and Achieve Clear Financial Goals

Ravi, a 28-year-old marketing professional in Mumbai, was earning ₹12,00,000 per year but had no savings. He wanted to buy a house but didn’t know how to start saving for it. 

A personal finance coach helped him set clear financial goals, like saving ₹5,00,000 in 2 years for a down payment.

• Defines your short-term and long-term goals: Whether you’re saving for a house, children’s education, or early retirement, a coach helps you break it down into achievable steps.
  
  
• Keeps you accountable: Just like a gym trainer keeps you focused on fitness, a financial coach ensures you stay on track with your money goals.
  
  
• Helps you overcome spending habits: If you often spend on impulse purchases like gadgets, expensive restaurants, or unnecessary subscriptions, a coach can help you identify and fix these habits.
  
  
• Ensures progress tracking: Regular financial check-ins help measure your success and adjust plans if needed.

For example, if you want to build an emergency fund of ₹1,50,000 in one year, a coach will guide you to save ₹12,500 monthly and suggest the best accounts to keep your money safe.

2. Provides a Customized Financial Roadmap

Each person’s financial journey is different. A finance coach does not give the same advice to everyone. Instead, they create a plan based on your income, expenses, debts, and financial goals.

Example of a Customized Financial Plan:

• Debt Management: If you have a home loan or education loan, the coach will guide you on how to reduce your EMIs smartly without affecting your savings.
  
  
• Investment Planning: Whether it’s SIPs in mutual funds, PPF, or stocks, they help you choose the right investment based on your risk level.
  
  
• Retirement Planning: They help young professionals start retirement savings early so they don’t struggle later in life.

3. Improves Your Savings and Investment Strategies

Saving money is the first step towards financial stability, but it does not stop there. Smart investments can help your money grow over time. Inflation will reduce its value if you keep all your money in a savings account. 

Instead, putting some of your savings into fixed deposits, mutual funds, or stocks can help beat inflation and give you better returns. For example, if you save ₹1,00,000 in a bank with a 4% interest rate will grow to ₹1,48,024 in 10 years. 

However, investing the same amount in a mutual fund with an 8% return will grow to ₱2,15,892 in the same period. That is why diversifying your savings is essential. Investing wisely also helps you prepare for significant expenses like buying a house, children’s education, or retirement.

4. Helps You Manage Debt Wisely

Debt is a tool that can help you buy things like a house or a car, but it can also trap you if not managed well. Understanding the difference between good debt and bad debt is essential. Good debt, like a home loan, builds your future. 

Bad debt, like unnecessary credit card purchases, can lead to financial stress. Managing debt wisely ensures you do not pay more than necessary interest and helps you stay financially secure.

1. Avoid Unnecessary Loans

Not all loans are helpful. Taking a loan for things that do not increase in value, such as luxury vacations or expensive gadgets, can lead to unnecessary financial burdens. 

Before borrowing, ask yourself if the loan is essential or if you can save and buy later. For example, buying a mobile phone on EMI may seem easy, but you pay more due to interest.

2. Pay More Than the Minimum Amount

If you have a credit card or loan, always try to pay more than the minimum due amount. Credit card companies charge high interest, sometimes up to 36% annually. If you only pay the minimum, your debt will keep growing. 

For example, if you owe ₹1,00,000 on a credit card with 36% interest and only pay the minimum, you may take years to clear it, paying double the amount in interest.

3. Use the Snowball or Avalanche Method

The snowball method suggests paying off the smallest debt first while making minimum payments on larger debts. This method motivates you as small debts disappear quickly. 

The avalanche method focuses on clearing high-interest loans first, saving you more money in the long run. Choose the one that suits you best.

4. Compare Loan Interest Rates Before Borrowing

Before taking a loan, always compare interest rates from different banks or financial institutions. A slight difference in interest rates can lead to big savings. 

For example, a ₹5,00,000 home loan at 8% for 20 years will have an EMI of ₹4,182, whereas the same loan at 9% will have an EMI of ₹4,496. That extra ₹314 per month adds up to ₹75,360 over 20 years!

5. Use a Loan Repayment Table for Planning

Here is a simple comparison of loan repayment for different loan amounts:

A small difference in interest rates makes a big difference in EMIs. Always plan before taking a loan!

5. Enhances Your Financial Literacy

Being financially literate means understanding how to manage your money wisely. It helps you make better financial decisions and avoid common money mistakes.

• Set a Budget: Always track income and expenses. You have no savings if you earn ₹50,000 and spend ₹45,000 monthly. Adjust your spending to save at least 20% of your income.
  
  
• Understand Taxes: Knowing how taxes work can help you save money. For example, investing in PPF or ELSS can reduce taxable income.
  
  
• Know Your Credit Score: A high credit score gets you loans at lower interest rates. Pay bills on time to maintain a good score.
  
  
• Emergency Fund is a Must: Keep at least 6 months’ expenses in an emergency fund to handle job loss or medical emergencies.
  
  
• Start Retirement Planning Early: If you invest ₹5,000 per month at a 10% return from age 25, you will have ₹1.9 crore by 60. If you start at 35, you will only have ₹0.7 crore.
  
  
• Be Aware of Hidden Charges: Many loans, bank accounts, and credit cards have hidden charges like processing fees or annual fees. Always read the terms carefully.
  
  
• Use Digital Tools: Apps like Google Sheets or budgeting apps help track expenses, investments, and goals easily.

6. Prepares You for Unexpected Financial Emergencies

Life is full of surprises. Sometimes, those surprises come as unexpected expenses—a sudden hospital bill, a car repair, or even job loss. If you do not have savings, these situations can create financial stress. 

An emergency fund acts as a safety net. It helps you handle sudden expenses without taking loans or using credit cards with high interest rates
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• Set aside a fixed percentage of your income every month. Even saving 10% of your salary can make a difference over time.
• Keep at least 6 months' worth of expenses in an emergency fund. If your monthly expenses are ₹50,000, aim for ₹3,00,000.
• Use a separate savings account for emergencies. This prevents you from spending it unnecessarily.
• Avoid investing emergency funds in stocks or mutual funds. These carry risks and may not be liquid when needed.
  
  

7. Keeps You Accountable and Disciplined

Financial discipline ensures you do not overspend or make poor money choices. It helps you stay within budget and reach long-term financial goals without stress.

1. Set a Monthly Budget

Budgeting helps you control expenses. Write down your income and list all necessary expenses like rent, groceries, and bills. Keep a fixed amount for savings and entertainment. For example, if your monthly income is ₹80,000, you can allocate ₹40,000 for expenses, ₹20,000 for savings, and ₹20,000 for leisure and investments.

2. Track Your Expenses Daily

Many people do not realise how small expenses add up. A ₹200 coffee daily costs ₹6,000 per month. A ₹3,000 monthly subscription you do not use is ₹36,000 wasted in a year. Keep a simple expense tracker or use an app to note down every rupee you spend.

3. Avoid Unnecessary Debt

Loans and credit cards should be used wisely. Buying things on EMI may seem easy, but interest payments increase your cost. If you buy a phone for ₹1,00,000 on EMI at 12% interest, you may pay ₹1,12,000 over a year. Instead, save for major purchases and buy them in full.

4. Invest for the Future

Savings alone will not grow your wealth. Investing in fixed deposits, PPF, and mutual funds can help. If you invest ₹5,000 per month in a mutual fund with 12% annual returns, you will have about ₹11,00,000 in 10 years. Start early to benefit from compounding.

5. Reward Yourself for Discipline

Financial discipline does not mean sacrificing all enjoyment. Set rewards for achieving savings goals. If you save ₹1,00,000 in 6 months, treat yourself to a short trip or a nice meal. These small rewards keep you motivated to continue good financial habits.

By following these simple steps, you can build financial security, avoid debt traps, and comfortably achieve your goals

Conclusion

A personal finance coach can be a game-changer in 2025, helping individuals like Rajesh, Ravi, and Anita take control of their money. From setting clear financial goals to smart budgeting, investment planning, and debt management, expert guidance ensures financial stability and long-term growth. 

You can secure a financially stress-free future by staying disciplined, tracking expenses, and making proper financial decisions. Investing in a coach is not just about managing money, it’s about building financial confidence and achieving life goals.

FAQs

1. What does a personal finance coach do?
 A personal finance coach helps you plan savings, manage investments, reduce debt, and achieve financial goals with a structured approach.

2. Is hiring a personal finance coach expensive?
 Coaching fees range between ₹3,500 to ₹7,500 per session, but the long-term financial benefits outweigh the cost.

3. Can a finance coach help with loan repayments?
 Yes, they guide you on smart repayment strategies like the snowball or avalanche method to clear debt faster.

4. How can I start saving if I have no extra money?
 A coach helps you track expenses, cut unnecessary spending, and set realistic savings goals, like the 50-30-20 rule.

5. When should I start planning for retirement?
 The earlier, the better! Starting in your 20s or 30s helps you build a bigger retirement fund with compound interest.

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About the Author

LoansJagat Team

We are a team of writers, editors, and proofreaders with 15+ years of experience in the finance field. We are your personal finance gurus! But, we will explain everything in simplified language. Our aim is to make personal and business finance easier for you. While we help you upgrade your financial knowledge, why don't you read some of our blogs?