Some Thoughts on Personal Finance Coaching

Several people have written to me recently asking questions about programs such as Dave Ramsey’s Financial Peace University and other such personal finance coaching programs.

What You Get
Financial Peace University (and other programs like it) collect together a lot of useful pieces of personal finance information into one place. Usually, these programs provide a step-by-step plan for recovering from a poor financial situation (intense debt, bankruptcy, etc.) and offers pointers towards building a strong financial situation once you’ve recovered.

Usually, these packages are delivered as a large package, containing books, workbooks, CDs (sometimes), DVDs (sometimes), and seminars with live speakers. These packages try to reach out to all types of learners - those who learn from reading, those who learn from watching, and those who learn from listening to speakers (and asking questions). I tend to be a reading-oriented learner, for example, so I’m usually content to see the written materials.

Quite often, such coaching packages revolve around a series of seminars which function a lot like college classes: there are “assignments” of reading (or DVD watching) outside of class, as well as other personal finance tasks. The “classes” themselves usually reiterate the material but focus on cheerleading and positive thinking - encouraging you and reinforcing the idea that you can do this, even if it seems overwhelming.

Although I’ve not investigated many of the packages out there, the mainstream programs (like Dave’s Financial Peace University) do package worthwhile information with motivational techniques. It can have much the same impact as a trainer at the gym, providing good basic techniques along with motivation and encouragement.

The Drawbacks
Given that, there are several drawbacks to any such package.

First, it’s expensive, and if you’re already in financial trouble, another three-figure outlay of money is often not helpful at all. For example, the Financial Peace University package costs $149 - you get worksheets, books, a journal, and some software, as well as the opportunity to attend any FPU seminars you want. The version with DVD materials is even more - $249.

For a lot of people, that’s prohibitively expensive. If you’re working a minimum wage job, that’s a week’s pay - even if you’re earning more, that’s more cash than you can probably easily pinch out.

Second, most of the information you’ll get from such courses is already out there. Such courses rarely provide any significant new information that can’t be found for free on the internet by searching for “debt help” or reading through the “debt” category at a good personal finance blog.

In fact, you can often get the same materials from such classes at your library for free (without the seminars, of course). I was able to check out Dave Ramsey’s Financial Peace Revisited and the associated workbook from my local library, which contains a lot of the material in the course.

My Take
If you’re simply seeking out the information from these courses, I recommend looking for other sources, such as the library or the internet. You can find all the information you need for getting out of debt without the cost.

The value of such programs comes from the coaching itself. Many people simply thrive on having a person motivate them to make better choices - dietitians and personal trainers are two examples of this.

Of course, you also have the option of seeking out your own motivation. Find a “money buddy,” for example, who can serve as a watchful eye and a cheerleader for you (as you do the same for him/her). Alternately, talk about your situation with the people in your life who do the best job of inspiring you to better things - and you’ll feel driven by their knowledge of your situation to improve things.

Of course, for some, good old fashioned direct coaching is the best option, and if you’re in that boat, programs like Ramsey’s can be a godsend.