CFEE Guidebook

15 BUILDING FINANCIAL CAPABILITY THROUGH FINANCIAL COACHING members in their home countries. For most of these students, the coaching process involves identifying their goals, developing a budget, finding ways to save, and creating a plan to build credit. However, for many students, their economic circumstances are more complex. Students may be facing an array of life challenges that affect their finances and threaten their ability to stay in college, such as housing, cost of childcare, lack of healthcare, or legal problems. Some students may be homeless, have addiction issues, or may be victims of domestic violence. In this respect, a coach can play a critical role in introduc- ing students to resources and social services that are available on campus or in the community. The Important and Varied Role of Coaches Financial coaching touches on myriad financial challenges that students face, and coaches must be prepared to respond to these challenges by wearing many hats, from advisor to cheerleader to mentor. Many financial professionals make excellent coaches, but not all financial coaches need to have a financial background. A signifi- cant number of organizations have staffed their coaching programs with individuals who have been specifically trained to work with their client population. In creating a financial coaching program, it is important to define the parameters of what financial coaching is and what it is not. For example, a financial coach should not be confused with a financial advisor. Financial advisors are licensed professionals working for banks or broker dealers who provide investment advice for a fee. Ideally, financial coaches do not give advice to students about what financial decisions they should make, in terms of where they should bank or where they should invest. Instead, coaches introduce resources in the coaching process that help students make their own decisions. Financial coaching is also differ- ent from credit counseling, which is a specialized service, usually offered by nonprofit organiza- tions, to assist individuals with a variety of money issues such as credit and debt management. Some credit counselors offer the same types of services as financial coaches, in terms of helping to de- velop budgets or improve credit. However, credit counseling agencies are set up to assist customers with more complex debt management issues, such as a need to obtain debt relief, file for bankruptcy, or repair credit that has been affected by bankruptcy or de- fault. Credit counseling organizations typically charge a fee for their services, while coaching is often provided free in the nonprofit setting. The distinction between credit counselors and financial coaches is that credit counselors will intervene on a client’s behalf to negotiate directly with creditors and, in some cases, manage their payments. Financial coaches, in contrast, will work with clients to give them the capacity to address their financial issues and gain skills to advocate for themselves. Many colleges, including Westchester Community College, have specialized resources to help students with emergency situations and to provide short-termmonetary assistance. This may include helping them to pay rent, make a utilities payment, or obtain medical treatment, if there has been a genuine crisis beyond the control of the student. My former habits caused me to spend, spend, and spend, but now I have a working budget. My coach helped me to get my expenses under control and focus on what matters to me. Abel, 2018 graduate