“Where can I receive help with my money management?” is a question that I hear regularly. Many financial professionals, with different credentials and approaches, assist people with investing decisions but historically not many help with personal financial goals related to managing daily spending, saving for personal goals, and managing debt. A relatively new trend, financial coaching, is changing that.
The field of financial coaching is only about a decade old, and is growing in popularity. Financial coaching is different from traditional financial education in that it is focused on helping people reach their financial goals, rather than providing prescriptive information (or telling people what to do). For example, a financial coach starts the coaching process by exploring the participant’s goals and then providing appropriate education and encouragement around these goals. This means that all participants do not hear the same education from the coach – it’s much more personalized.
A good financial coach provides:
- accountability,
- helps develop action plans,
- keeps the focus upon the participant’s goals, and
- provides timely education and referral to other services as needed.
Does financial coaching make a difference in people’s lives? Research studies indicates that it does. University of Wisconsin Extension’s Center for Financial Security is one of the leaders in the field. Their report, Financial Coaching: Review of Existing Research, documents increased budgeting and savings of financial coaching participants, as well as a reduction in debt for those participants with these goals. Financial coaching helps people form and achieve their goals.
Financial coaching is happening in our communities as well as nationwide. University of Illinois Extension is one of the organizations that provide financial coaching; our program is called Money Mentors. Since the Money Mentors program began in 2013, over 130 community members have become mentors.
Money Mentor volunteers help community members develop financial goals, create budgets, build savings, manage credit and organize finances. In 2017, 145 participants were helped by the mentor volunteers in our local communities, and over 60 more participants have joined the program so far in 2018. United Way of Champaign County provides important funding support for this program.
All types of people have received financial coaching through Money Mentors – different ages, income levels, and occupations. For example, participants range in age from under 25 to over 60 years old, with most participants between the ages of 25-35 years old.
The Money Mentor participants’ goals vary. Common goals include short-term goals such as creating a budget and paying down debt. Long-term goals such as saving to buy a home or for retirement are common too. Evaluation results show that our local program is having similar success to national financial coaching programs: many participants do increase their savings and decrease debt while a part of Money Mentors.
Money Mentors makes a difference in the lives of community members. When mentor volunteers were asked, “Why does our program matter?” these were some of their answers:
- Many of the young people I have talked with have no family to help them with money matters.
- With financial literacy, people are empowered to help themselves.
- It’s a no judgement resource that anyone can utilize.
- The biggest benefit to the mentees is just knowing that someone in the community cares … it seems to give them the incentive to put their financial lives in order.
Are you interested in becoming a Money Mentor and helping our community conquer their finances? The next training class begins in early October and will be held weekly, in the afternoon Training consists of 30 hours of training, including online-based training and six, three-hour in-person sessions. In-person training features games and role-plays using financial content knowledge, plus developing coaching and communications skills. There is a $40 fee to cover training materials; partial scholarships are available.
If you would like to join the Money Mentor volunteer group, visit University of Illinois Extension’s website to register for the next training.
Additionally, if you would like to meet with a Money Mentor, you can apply online at go.illinois.edu/moneymentors. Money Mentors now has office hours as well if you only have a few questions that can be answered within an hour. Call 217.333.7672 to schedule a walk-in appointment.
Source: Kathy Sweedler, Extension Educator, Consumer Economics, sweedler@illinois.edu