Urban Wire Financial Coaching Emerges as a Vital Support during the Pandemic
Benny Docter, Daniel Teles, Brett Theodos
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Last week, the US Department of Labor reported its 28th consecutive week of seasonally adjusted initial jobless claims that were higher than at any point before the COVID-19 crisis. This is just one indicator of the financial hardships caused by COVID-19. During the first few months of the crisis, the Coronavirus Aid, Relief, and Economic Security (CARES) Act and other federal polices government provided new forms of support, including expanded delivery of unemployment aid, stimulus checks, and loan deferrals. Many of these supports have since ended, and new policies, such as the eviction moratorium order from the Centers for Disease Control and Prevention, continue to be developed.

A tool for navigating financial uncertainty

Financial coaches collaborate with clients one-on-one to establish and reach personal financial goals and navigate periods of financial uncertainty. Over the past two decades, financial coaching programs have grown and diversified their services. In 2007, there were approximately 40 active financial coaching programs in the US (PDF). As of 2016, the Asset Funders Network estimates 2,265 coaches deliver services through 453 coaching organizations to approximately 18,120 clients monthly (PDF).

Research suggests financial coaching can help people build and sustain access to credit, and our recent evaluation of  the Stand By Me program in Delaware adds to this growing evidence base. We found that clients took active steps to improve their financial well-being, such as reducing debt in collections and lowering credit card utilization rates.

Building on this research, we sought to understand how financial coaching has adapted to the current crisis. We spoke with leaders of coaching organizations across the country to find out how their organizations, coaches, and clients were responding. What they told us suggests that well-supported coaches can offer people vital guidance in response to shifting economic conditions. 

During a crisis, clients benefit from the adaptability of financial coaching

Service providers told us that although clients’ goals might change during a crisis, the core mission of coaching does not. Coaches still strive to support client-identified goals. As Saundra Davis, executive director of Sage Financial Solutions said, “This is what we've been preparing for. If people are doing real coaching with deep and broad financial knowledge, they can be responsive to a range of client needs.… If you are truly a coach, this is what you've been training for.”

Several experts reported that the COVID-19 crisis has led to a shift in their clients’ priorities. Clients and coaches have had to multitask crisis management with multiple overlapping financial challenges. As Haidee Cabusora, Change Machine’s chief program officer told us, “Managing multiple shocks in a relatively short time is the new normal. We need to reshuffle the action steps to form a layered, rather than sequential, response.” Karen Murrell, a program officer with the Asset Funders Network, noted that coaches are “shifting to be focused on helping people make ends meet. [It’s] less what are your long-term goals and more negotiating with creditors, connecting clients to families to food banks, and discussing which bills to prioritize.” And coaches are pivoting to help clients make difficult decisions about when or whether to take advantage of forbearance and wavier opportunities.

Having a trusted source of information is more important than ever

Financial coaches are helping their clients vet and validate new financial interactions. Some clients have needed help determining whether emails from their banks and creditors are spam and which are helpful. Others have needed help finding and connecting with new services. Others still have simply found value in knowing they aren't facing this crisis alone.

To become a knowledgeable and trusted source of information in this changing environment, financial coaching organizations had to quickly educate themselves about evolving policies. As unemployment insurance grew and shrank again under the temporary provisions in the CARES Act, many coaches consulted with unemployment experts about these changes. Networks like the Foundation for Financial Planning have paired planners and coaches with issue experts who specialize in specific benefits. Other organizations have focused on ensuring their coaches have the most current and accurate information available. For example, United Way of Delaware, as operator of the local 211 service referral hotline, is quickly disseminating information it receives to Stand by Me financial coaches.

Coaching isn’t the solution to the financial crisis, but it can help

Of course, financial coaching cannot solve a global pandemic or its related economic fallout. And it has not been well positioned to address the racial wealth divide that persists after generations of racist policies. But with the proper supports, financial coaches are working with clients to help lessen the pandemic’s threats to their well-being.


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Tags COVID-19 Community and economic development Finance
Policy Centers Metropolitan Housing and Communities Policy Center
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