Jack is proud of the college degree he earned a few years ago, but it’s been hard to find a well-paying job, even with his BA.
He’s able to cover his share of the rent for the apartment he shares with two friends, but he can’t afford the monthly payment on his large student loan, and at this point it’s at risk of going into default.
Jack is worried about his financial future, and he’s not sure what to do.
He wants to save for the future but, forced as he is between paying his monthly bills and paying down his debt, he’s worried he may soon not even be able to keep a roof over his head.
For someone like Jack, achieving financial security can feel next to impossible.
How can you save when your job barely pays enough to cover basic expenses, and a considerable chunk of your income is claimed by creditors? Does it even make sense to save while you have outstanding debt?
Is there any other way to build financial stability — or even opportunity — while carrying debt? There’s so much to consider in these questions, and the intricacies of interest rates and other finance mechanisms are so complex that a lot of us could benefit from a little expert help.
Most of us are familiar with financial advisors, but these professionals primarily assist clients who have already achieved financial security. Financial advisors help people with means to safeguard, grow, and eventually pass on their wealth; they don’t have much to offer those who are still working to build a solid financial footing for themselves.
But for people in that position, luckily, there are financial coaches.
A financial coach guides clients in developing healthy money habits that can help build economic stability.
A coach supports clients with such things as creating a workable household budget, reducing debt, building savings, and making a plan to work toward long-term goals like homeownership.
If a financial advisor’s role is to manage wealth that’s already there, a financial coach helps build the foundation of habits and behavior that wealth can grow from.
A financial coach is typically more affordable than an advisor, but their services can still be prohibitively expensive for someone on a modest income. In other words, those who might most benefit from the assistance of a coach are often least able to access this kind of expert service, further reinforcing the systemic inequalities that can make it so hard to escape the cycle of poverty and financial insecurity.
That’s why financial coaching has become a core component of the UpValley Family Centers’ long-term effort to help low-income families build financial stability.
Since the 2017 wildfires, UVFC has been working towards a just recovery for the Upvalley community: a recovery that recognizes how systemic inequalities left low-income households uniquely vulnerable to the impact of disaster in the first place, and that aims not just to get families back on their feet, but to create a more stable foundation for those feet to stand on, so that families are less vulnerable when the next disaster hits. This work continued through subsequent fires, and has now gained even further urgent momentum as we face the consequences of a pandemic and the two most recent wildfire incidents.
Two years ago, five UVFC case managers began an extensive training process through the Association for Financial Counseling and Planning Education, in partnership with Sage Financial Solutions, to become certified Financial Fitness Coaches.
Since then, they’ve helped hundreds of clients create a household budget, make a workable plan to reduce debt or build savings, strategize ways to pursue larger financial goals — like buying a car or paying for higher education — or simply to open a bank account and better understand U.S. financial systems.
Financial coaching at UVFC is client-centered, which means that the process is driven by the goals that clients themselves identify.
The role of the Case Manager is then to deploy their financial knowledge, combined with their understanding of the individual or family they’re working with, to guide clients in developing a personalized, actionable plan for reaching those goals.
The coach acts as a motivator, and thereby aims to foster clients’ sense of ownership and control over their financial status, and their economic future.
Jack came to the Family Centers with his financial concerns, and a case manager helped him work with his lender to arrange a payment plan that was based on his actual debt-to-income ratio. She also helped him establish a feasible monthly budget, and guided him in opening three separate savings accounts to build a rainy day fund, pay some outstanding taxes, and help further reduce his debt.
Jack was relieved to realize that he could start saving despite facing considerable debt, and these days feels more in control of his financial life.
Because coaching focuses on building healthy habits and a strong foundation for financial health, it prompts a long view, encouraging clients to assess their financial present as it relates to their longer-term economic future. That kind of long-term perspective became difficult to maintain as the events of this past year steeped many of our clients into an immediate financial crisis. At the same time, though, the devastating financial impact of the pandemic and recent wildfires on low-income families demonstrates precisely why a service like financial coaching is so valuable in helping households achieve the kind of security they need to better weather these kinds of crises. And, in fact, financial coaching services have helped to maximize the impact of other disaster relief resources provided by the Family Centers. Every family who received Emergency Financial Assistance, for example, also received a case manager’s help in assessing their monthly budget, identifying expenses that could be reduced or eliminated, working out ways to lower or suspend debt payments, and connect with free resources in the area, allowing households to stretch their aid payments further.
UpValley Family Centers is committed to continue providing financial coaching as a core component of its long-term just recovery work. Financial coaching is made possible by the Rose Foundation for Communities and the Environment, Auction Napa Valley, and the Napa Valley Community Foundation. To learn more about the UVFC’s Financial Coaching program, please call Joleen Cantera, Economic Success Program Manager, at (707) 965-5010.
WATCH NOW: CALISTOGA COMMUNITY AWARDS 2020
MEET OUTSTANDING MEMBERS OF THE NAPA COUNTY COMMUNITY
Heart of the Valley: Meet outstanding members of the Napa County community
Each year the Napa Valley Register runs a series of community profiles to shine a spotlight on unsung individuals whose actions have made a difference in the lives of others in Napa County.
A cold call to Gordon Huether gave barber, Giancarlo Fradella, a lifeline to weather the pandemic.
During the COVID-19 pandemic Janet Nottley's work has extended beyond the normal tasks of establishing and enforcing child support orders for parents.
Parents on tight budgets told Shelley Lopez they were choosing between food and masks for their children. She set out to make sure families had what they needed.
After lockdowns threatened to spell doom for Napa Valley's vibrant culinary scene, one local stepped in to offer his help. Soon so did 15,000 others.
Check out the free snack station this Napa family made for delivery drivers and other essential workers.
Growing up in a small town taught David Busby a few golden rules that have inspired him as a retiree: Treat others as you would want to be treated, and love your neighbor.
Robert Morey of the nonprofit The Napa School of Martial Arts offers free Zoom classes to his students during the pandemic.
Lydia Mondavi worked with others to help bring widespread COVID-19 testing to Napa Valley.
Young Farmers spent 2020 helping those in need.
Erika Pusey credits the people she has met in her numerous volunteer efforts for changing her life and widening her horizons.