Clients Build Crucial Life Skills in Financial Coaching Program

At one time or another, many of us have told ourselves, “I need to take better control of my finances,” only to continue managing our money the very same way. But Kevin isn’t like many of us. When he recognized he could do a better job budgeting and paying his bills, he decided to make a change. He also realized that he was more likely to achieve these goals with the help of a financial coach.

“For years, I wasn’t able to get my spending and the amount of debt I owed under control. In 2007, I even enrolled in a debt management program with Guidewell Financial Solutions. They were CCCS back then. I stayed for about a year, and it really did help. But after I left, I still had problems paying bills on time and spending on things I didn’t need. After attending personal finance seminars at my church and researching and reading, I decided to take the bull by the horns once and for all. When I called the agency this time, they told me about their new financial coaching program and suggested it might give me the support and resources I needed to succeed.”

• The Client – Coach Interaction

Kevin’s financial coach Pam Wilson says program candidates like Kevin are the reason she looks forward to coming to work. “One of the things I like best is seeing clients grow and experience a series of ‘ah ha’ moments. For this to happen, they really have to have a strong willingness to change and be open to trying different things.”

Financial coach Shirley Benning agrees. “From the beginning, we talk about the 90 – 10 principle: Once clients are in the program, we listen, we help them set up realistic goals, and provide encouragement and resources, but they do 90 percent of the work.”

Benning, who worked as a budget and credit counselor at Guidewell Financial before joining its coaching staff this summer, says this is one of the biggest differences between the two programs: “As a financial counselor, it was my job to provide clients with a solution to their problems. I listened, but I also did a lot more of the talking. As a financial coach, I take the backseat. Instead of giving clients a ready answer, I’m here to help them gain awareness and build better habits. We do this by asking the right questions and helping them brainstorm. We also supply them with tools like MyBudget Coach, which makes it easier to track your finances.”

• How Financial Coaching Works

Financial coaching clients who enroll with Guidewell Financial generally stay in the program for up to a year. During this time, they may set and achieve anywhere from one to three personal finance goals. Wilson says these vary depending on what each client hopes to accomplish. “Sometimes they come to us hoping to simply learn to budget or begin to save. Other times they have bigger dreams. Maybe they want to put away enough money to make a down payment on a new home. Whatever goal they select, the first step is to see if it’s doable. The SMART worksheet helps us evaluate their goal choice: Is it specific, measurable, achievable, realistic, and timely? If it is, then the next step is to brainstorm what strategies they plan to follow to achieve it.”

• Goal Setting and Achieving

Over the course of Kevin’s program, he accomplished three major goals. One of the first things he wanted to do is develop an emergency savings plan. He says, “I was always good at saving change, but when I tried saving dollars, I always ended up spending them before very long. During coaching, we talked about what I could do to change this outcome. My solution was to open a savings account at a bank branch a distance from my home.” This approach helped him avoid dipping into his savings as it accumulated.

Kevin also looked for ways to increase the amount he could contribute to savings. “At the start of each session, Ms. Pam would ask me, ‘How much income did you have coming in this month? Where did it go? What do you have left to put into saving?’ This made me realize I am responsible for my own finances. I started keeping a list of everything I paid for, and before long, I was a lot more aware of where my money was going. When I went to the store, I also visualized her asking me, ‘Do you really need that or just want it?’ This made it easier to avoid overspending on things I didn’t really need.”

Coffee was one item where Kevin learned to save big. When he entered the program, he’d been stopping by a convenience store to buy a cup of coffee every morning before work. By the end of the program, he was purchasing bulk containers of coffee from the grocery store and making his own coffee to bring from home. This ended up saving him about $30 per month.

The second goal Kevin set for himself dovetailed with the first: He wanted to get a handle on his monthly expenses so he could pay his bills on time. He says, “For many years, I paid bills when I thought of them, but it was hit or miss. I didn’t always send in what I owed when it was due. This led to late fees, and in some cases banks even threatened to close my accounts. Before I knew it, my credit rating was shot.”

Financial coaching gave Kevin a means for reversing this trend. After strategizing with Wilson, he went home and organized his finances. “At our next session, she applauded my efforts and asked, ‘Now how can you make reviewing your bills a habit?’ After some discussion, we came up with a workable plan.” The solution? Every Monday Kevin now sits and reviews what’s due. “Having things organized makes it easier to see when things need to be paid, and having the same review day each week helps me make sure nothing is ignored.”

Kevin’s final financial coaching goal was to get his credit card debt under control. When Wilson asked how much he felt he could pay off, he decided it was possible to reduce his credit card balance by $1,700 in the time left. To attain this goal, he made payments to his creditors each time he received a paycheck and limited further unnecessary charges. He says, “That’s probably one of the most important skills I have gained. I learned how to say, ‘NO.’”

§ The Final Result

While participating in financial coaching, Kevin clearly developed better financial habits. But this isn’t his only reward. Five years ago, his credit score hovered around 460; his score today is 710. “Knowing that, I feel freedom and relief. I used to worry where I was going to get enough money to repay my debts. Now I know from day-to-day where I stand. It’s still a work in progress – I’m sometimes tempted to overspend – but when that happens I remind myself how far I’ve come. It feels good to be on track.”

To learn more about Guidewell Financial Solutions’ financial coaching program, please visit the agency website at www.guidewellfs.org or contact Pam Wilson or Shirley Benning at 1-800-642-2227. This program welcome packet may also help you decide if it’s a good fit for you.

####

Guidewell Financial Solutions (also known as Consumer Credit Counseling Service of Maryland and Delaware) is an accredited 501(c)(3) nonprofit agency that helps stabilize communities by creating hope and promoting economic self-sufficiency to individuals and families through financial education and counseling. To learn more about the agency, visit its website or call 1-800-642-2227 for financial counseling or coaching. Maryland License #14-01 / Delaware License #07-01.