Insights on Financial Coaching

Financial coaching is an intervention using a coach-client model of regular, one-on-one sessions to set and manage financial goals and design concrete plans of action. It has emerged in recent years as a potential complement to financial counseling and education as a way to improve personal financial outcomes.

Like counseling (and unlike financial education classes), coaching focuses on a one-on-one relationship, but unlike counseling it is more client-driven. The coach works with a client to set goals and take concrete steps to meet those goals, rather than prescribing a set of tasks designed to respond to a particular issue.

The Urban Institute has been at the fore of research into coaching, helping to inform policymakers, researchers, and practitioners in the field.

Program Evaluation of $tand By Me

Urban performed a mixed-methods evaluation of the $tand By Me financial coaching program ($BM) in Delaware. The research findings show that $BM clients are seeing improvements in their financial well-being. Although elements of the program could be strengthened, its structure and approach offer lessons for other states and localities interested in offering similar financial coaching programs.

We presented findings from this research project in a number of formats, including:

  • A new research report on the structure and impact of Delaware’s coaching program $tand By Me.
  • A new fact sheet summarizing the causal analysis in the above report.
  • blog post building off those findings, and discussing adaptations coaches around the country have implemented as a result of COVID-19.

CFPB Financial Coaching Initiative

The Urban Institute examined coaching efforts as a part of the CFPB’s Financial Coaching Initiative, which ran between April 2015 and March 2019 (CFPB overview here). This initiative was designed to integrate coaching into service delivery for transitioning veterans and economically vulnerable consumers nationwide. The Urban Institute examined coaching efforts across the coaching sites, documenting how coaching services were implemented, who was served, what services were provided, and whether expected outcomes were achieved.

Evaluating Financial Coaching using RCTs

In October 2015, the Urban Institute released the field’s first randomized study of financial coaching: An Evaluation of the Impacts and Implementation Approaches of Financial Coaching Programs. This study presents findings from a Randomized Control Trial (RCT) of two financial coaching programs that serve low-and moderate-income populations: Branches in Miami, Florida, and Change Machine (formerly The Financial Clinic) in New York City. Study findings suggest that a well-implemented coaching program with engaged clients can produce important improvements in certain financial outcomes.

We presented findings from this research project in a number of formats, including:

  • A blog post that introduces financial coaching as a new method for improving financial well-being.
  • A blog post that overviews of the report and discusses findings.
  • A brief reporting on lessons learned from a roundtable discussion Urban hosted with the CFPB in 2013. In that convening, participants shared insights into the successes and challenges associated with rigorous evaluations of financial capability interventions.
  • The full study report.
  • A journal article of the findings.
  • A webinar coinciding with the report release.