It Takes a Financial Village
Making financial coaching available to those who need it benefits us all.
One in two households in Louisiana is unable to afford basic expenses or save for emergencies, according to the 2020 United Way ALICE Report for Louisiana. With financial shocks more prevalent due to increasing natural disasters and the cost of living rising because of inflation, expanding financial services and coaching strategies is essential to strengthen the financial health of Louisianans.
Financial coaching presents our neighbors, and more specifically, communities most vulnerable to financial hardship, an opportunity to achieve better financial health.
Financial coaching is a proven strategy.
The approach helps clients who receive financial coaching services develop the financial understanding and awareness to reach their financial goals. As indicated in our Asset Funders Network Brief, financial coaching “creates measurable gains for low- and moderate-income clients in the areas of money management, savings, debt levels, credit scores, financial confidence and financial well-being.” As a result, pairing coaching with a client’s ability to build financial know-how improves client financial health overall.
Of course, those who seek to improve their financial health are not monolithic in experiences and needs. Our financial health is dependent on our medical health, work status, housing needs, education attainment goals and family priorities, for example. These intersecting factors shift without notice, and many of our neighbors may experience financial hardships at various moments throughout their lives. From the young leader balancing child care and student loan debt to the baby boomer planning for retirement to the formerly incarcerated managing reentry into the workforce, each person should have the opportunity to work with a financial coach to address their needs. The “coach” provides one-on-one support to meet individuals and families where they are.
One major access point to financial coaching is employer financial wellness programs. Often, employer wellness programs are an avenue for employees to access financial coaching services. Eighty-six percent of employees are somewhat or very likely to participate in an employer financial wellness program if offered. Unfortunately, employees are often not aware of financial coaching benefits and are more likely to only seek these programs in times of financial hardship. Increasing employer wellness programs and improving the delivery of those programs will serve to grow access to financial coaching services.
As employers seek to provide access to financial coaching, nonprofits and philanthropic organizations are vital in supporting the financial coaching ecosystem. Asset funders, including philanthropies, Community Development Financial Institutions, and banks can invest needed funding for nonprofit organizations to plan, implement, and expand financial services for employees and individuals.
In October 2022, the Louisiana Asset Funders Network announced $1 million to invest in nonprofit organizations to boost financial coaching in the region. Our corporations and philanthropies share a responsibility to invest in resources and to partner with nonprofit organizations that expand financial coaching access to those who are seeking these services.
As access to financial coaching scales, funders, employers and nprofits must consider racial equity in its approach. For people of color — who are impacted by structural racism as demonstrated by the existing wealth gap and income inequities in the United States — a racial equity lens is integral in explaining root causes of one’s financial health, especially for people of color. AFN defines structural racism as the institutional, interpersonal, and historical dynamics across systems that disproportionately advantage White individuals and create adverse outcomes for people of color. Employer wellness programs and funders can invest in racial equity training for coaches to increase equitable outcomes for all.
Louisiana asset funders and philanthropies, employers, and nonprofits are key stakeholders to support the investment that will make financial coaching accessible. Our neighbors — especially those from minority and low-income communities — deserve an opportunity to access financial coaching and to be on a pathway to attain financial freedom. The payoff for Louisianans is increased productivity, lower financial stress, and improved financial health for our neighbors and for those who need it most.
Brandon Rapp is the Louisiana program officer at the Asset Funders Network, the leading grantmaker membership organization focused on advancing equitable wealth building. For more information, visit AssetFunders.org. Brandon can be reached at Brandon@assetfunders.org.