April is Financial Capability Month, a time when schools, credit unions, nonprofits – even the government – try to raise awareness about the importance of financial capability. It's also spring. And what better way to join the two than by doing some financial spring cleaning?
It's been a difficult year for many people, with lost hours and jobs due to COVID-19. And it's been an uneven year, too. Stimulus payments have helped some but haven't reached others. Some residents are getting tax returns. Others are finding them diminished. It's a lot to sort through.
Financial coaching can help. NeighborWorks America's own financial capability department recommends one-on-one coaching for those trying to sort through the last year and plan for the coming one. NeighborWorks also offers training that helps financial capability programs move forward, says Molly Barackman-Eder, NeighborWorks senior manager of financial capability.
"The most powerful thing you can do for your finances is have a one-on-one conversation with a coach to help you navigate your situation," she says.
When COVID-19 first hit last March, many people came up with patchwork solutions to help gain control of their finances, Barackman-Eder says. "They had to put things together in a hurry." Some had to leave jobs, either because the jobs disappeared or because they had caregiving responsibilities at home. Some saved money on childcare because their childcare facility closed. Some managed to pay rent, but others owe large amounts of back rent. Some have saved. Some have spent.
"Financial coaching is one way to get on track financially," Barackman-Eder says. "And one-on-one financial coaching, like the kind many of our network organizations provide, can have a such big impact. Financial capability is not 'one size fits all.'"
Barackman-Eder says that while courses in financial capability are helpful, many people have specific questions about their own situation. The one-on-one coaching is a good supplement, she says. "A one-on-one coach can help you organize your thoughts and help you find programs and resources you should be taking advantage of."
With the spread of COVID-19 over the past year, organizations are now offering this service by internet or by phone, which has made it even more accessible. "I think it helps people to really have intention with their money and have a plan, especially right now," says Jeff Belzer, a HUD-certified housing counselor at NeighborImpact in Oregon. "That means creating a plan before you start spending or before you start paying off debt and having a plan in place to start working toward goals."
Belzer says the counselors at NeighborImpact have been working virtually since February 2020. One counselor with the organization had been working virtually for years and was able to train the rest of them, so the turnover came quickly.
Housing Counselor Victoria Vale moved from central Oregon to the coast in 2018 – seven miles away from the home office. To continue doing her job, the organization allowed her to do video conferencing with clients. "It's fantastic," she says. "The only difference between working remotely and face to face is that I can't shake their hands, which I couldn't do right now anyway."
Vale showed them how to share screens and advised them to keep backgrounds and clothing professional. Virtually, it's easy to highlight items that require a client's attention, Vale says.
"Everybody's personal situation is different," she says, enumerating the reasons that one-on-one counseling is essential – for spring financial cleaning or any other time during the year. "When you're having a coach work with you, you can talk about your particular problems and your particular loan product, whether you're buying, threatened with foreclosure or working on a reverse mortgage. We help give you information so you can make an informed decision."
The coaches, who provide the work to clients at no charge, are impartial, Vale says, which is different from lenders or realtors who are selling a product. "It's really important to have that."
Belzer says that since the organization went virtual, "there hasn't been a missed opportunity. And it's been easier to schedule [coaching sessions], easier for people to find the time." 
There are spots in Oregon where the internet isn't always reliable, so at times counselors have to reach out to clients by phone. Clients can also make the virtual visit from one of NeighborImpact's offices. Regardless, Belzer has still spoken with 130 clients over the past 12 months, many about homeownership, and about a third on other financial capability issues.
Early on in the pandemic, he says, callers were in emergency budget mode. "It's important to be intentional about that," he says. "We started talking about emergency savings and paying down debt." Now, he says, he's talking with people who have received tax returns or stimulus checks or both. Some have more savings than they've had in a long time, and it's important to be intentional about that, too.
"That's what financial capability is," says Belzer. "It's the knowledge of how to plan with your money. Before you even get a paycheck, you should know: How much are you putting in savings? How much to pay off your debt? And how much ‘play' money do you have? You can still have fun while reaching your goals."
To see what financial coaching opportunities are available in your area, contact a NeighborWorks organization near you.
04/05/2021
