Improving your Financial Well-Being with Finance Coaching

Looking to improve your financial well-being? Finding the right help to improve your financial well-being can seem very confusing and complicated, but it doesn’t have to be.

Working with a financial coach is a great option for improving your financial well-being by helping you learn and develop the skills you need to manage your finances successfully.

A financial wellness coach can help you:

• Set and achieve personal financial goals
• Develop good money habits and financial management skills for lifelong success
• Develop and help you maintain a budget
• Identify a path to financial freedom

If you’re skeptical of the benefits of working with a financial coach, consider the work of the Consumer Financial Protection Bureau (CFPB). They ensure that banks, lenders, and other financial companies treat clients honestly and fairly. Their rigorous study of financial coaching programs determined that “financial coaching provides clear benefits for clients seeking to improve their financial well-being.”

How is a financial coach different from other financial educators?

According to the study by the CFPB on financial coaching, “By emphasizing support for behavior change, financial coaching is distinguished from other financial education programs that focus on teaching concepts.”

So, what does that mean? Financial coaches will focus more on your needs, strengths, and personal financial goals instead of just teaching hard to use concepts that don’t apply to your personal financial situation or recommending investments. For example, if one of your main setbacks to financial wellness is that you struggle to keep a monthly budget, a financial coach can help you determine the cause of your struggle, set a budget, and teach you strategies to better manage your finances.

Other financial professionals may focus only on specific areas of finance. For example, a financial advisor may only make recommendations to clients on specific investments, or focus solely on finance related to retirement and only educate their clients on financial goals for retirement. A financial coach is better able to customize the assistance they offer to meet your specific needs.

What exactly is a financial coach and how can they help?

A financial coach is someone who can serve as a sounding board or trainer for your financial well-being. They can help you determine your goals, utilize tactics to reach those goals, teach you to understand and develop good money habits, and help with budgeting.

A financial coach will not do the work for you. Instead, they will teach you how to do the work to improve your financial health yourself. This approach equips you with lifelong skills to help you achieve your financial goals when you’re no longer working closely with a financial coach.

According to research by the CFPB, “Financial coaching was associated with increases in clients’ scores on a financial capability scale, with 57 percent seeing their scores increase during coaching, 32 percent experiencing no change and 11 seeing a decrease. These associations do not prove causality since factors aside from coaching may also affect clients’ scores. However, the CFPB’s previous rigorous evaluation of financial coaching services found meaningful and statistically significant increases in clients’ money management; objective financial health metrics like savings balances, debt levels, and credit score; and subjective feelings of financial confidence and financial well-being."

How do I find a financial coach and where can I research financial coaching?

Before working with a financial coach, you should get a basic understanding of where you stand financially, where you want to go, and any specific objectives you have in mind, so they can better help you.

A great place to start is by using free online resources. The CFPB offers a financial well-being quiz, and OppU is a great resource for learning about your finances.

Once you have exhausted all free and easily accessible resources, reach out to a financial coach or find a coaching program to get started.

Before reaching out to a finance coach you should know your:

• Credit Score
• Bank account balance(s)
• Total amount of debt
• Overall financial goals – for example, is your goal of working with a finance coach to improve your credit score, increase your savings, or create a usable budget you can stick with?

Knowing these four things about your financial health will allow a financial coach to better assist with improving your financial wellness. If you need help finding or accessing this information, a financial coach may be a good starting point.

The next step is to learn more about financial coaching and research financial coaches to find the best match for you. The CFPB has numerous studies and a wealth of information on financial coaching, including how some programs are set up and what you can hope to achieve.

Where can you access a financial coach or financial coaching program?

Many community programs offer financial coaching for free as part of their programming; check with your local library and community center to learn more. Some churches and religious organizations may also offer financial coaching programs. Make sure to review your employee benefits as some employers offer financial coaching or provide access to these programs. Finally, contact the bank or credit company where you hold an account to see if they offer a financial coaching program.

You can locate a financial coach online via the search option on the National Financial Educators Council website or through a Google search.

The bottom line

If you’re looking to improve your financial well-being, financial coaching is a great place to start. Whether you aim to achieve financial freedom, save for a specific goal, or just improve your own overall financial health, financial coaching can work for you.