By Adria Schmidt, Neighborhood Trust Financial Partners
September 17, 2019
Three steps that have proven effective for helping people alleviate their financial stress.
I always knew I wanted a career that would help people, but never imagined that would lead me to financial coaching.
Here’s how it happened:
After I graduated college and joined the Peace Corps, I kept hearing from my friends back home who were really struggling financially due to the recession.
They were unable to find jobs, were moving back in with their parents, and were struggling with their high student loan and credit card debt. So many of them had been enticed by the credit card companies that had been promoting and giving away cards to students with no knowledge of how credit worked.
I saw time and again that financial problems were holding people back, causing stress, exacerbating health problems, and sometimes leading to homelessness.
It seemed like everyone was struggling financially and had nowhere to turn.
After the Peace Corps, I worked at a domestic violence organization where I assisted survivors in achieving financial stability.
It was there that I really saw the impact financial coaching could have on people’s lives.
Through my work I was able to help families get out of the shelter system, create emergency savings, establish credit, and build the financial stability and independence that allowed them to live free of violence.
Then I joined a nonprofit financial coaching organization in New York City—Neighborhood Trust Financial Partners. I became a financial coach, and my life was about helping people feel comfortable talking about money. Every day, I helped people navigate tough issues that can suddenly turn their lives upside down—like wage garnishments, debt collections, identity theft, loans, and eviction courts—alleviating stress and helping them feel in control of their money.
The key lesson I learned?
Talking to someone you trust can make all the difference in alleviating financial stress.
Today, after years in this job (I’m now a director in the organization), my wish is that every hard-working person in America could experience the same clarity, peace, and control of their finances that our clients feel. So a lack of resources or support around money never holds anyone back from their life goals again.
If you’re looking to help your loved ones or your employees, here are 3 steps that have proven effective for helping 50,000+ people and counting alleviate their financial stress:
1. LISTEN. Meet them where they are.
Over the years at Neighborhood Trust, I’ve watched hundreds of people walk into our office, reluctantly pull up a chair, and then be expected to open up to a complete stranger about a topic that’s so private—their finances.
But our approach surprises people.
We listen. We empathetically listen to their story and what is stressing them out, without passing any judgment.
We ask questions like:
- What brought you here to speak with me today?
- What are your goals—not just financial but also life goals?
- What do you think is stopping you from achieving your goals?
We also make it a point to remind them that 78% of American workers are struggling with financial stress. So they’re far from alone.
After a meeting, people would ask me, “Why are your clients crying?”
The reason was simple. They finally felt safe to talk to someone about something they never thought they could.
Establishing trust is always #1 in our process.
Many times, people just need someone they can talk to, who can be a guide in a stressful financial situation. And many times, that person can’t be family members because they’re so intimately tied to the financial picture and talking about it with them could just bring even more stress.
When people realize they finally have unbiased, outside support they can rely on in their financial journey—they leave feeling relieved.
2. GUIDE. Allow them to make their own decisions.
From the big life goals to the smaller budget tweaks—every part of a person’s financial life should be under their own control.
Our process is to walk through their financial snapshot with them, shedding light on specific areas to look at and potentially make decisions around.
Some questions we ask to guide people include:
- “OK, so you want to save X amount of dollars a week. Where in your budget do you think you would like to reduce expenses? Or where do you think you would like to increase expenses?”
- “I hear that you want to improve your credit. What specifically are you looking to increase your credit for? Are you looking to buy a car, a home, or move apartments? Let’s anchor this in a tangible and motivational goal.”
- “What factors are important to you for your checking account to have? Is it easy access to an ATM, a bank teller, low or no fees, proximity to home or work? Let’s examine all of the factors that are important to you and find the right checking account for your needs.”
We believe that everyone would make the right decision for themselves given the same knowledge and abilities. People don’t intentionally make bad decisions. They just haven’t been given the resources or the support to be able to move forward.
3. REMIND. Help them stay on track with their decisions.
The last step sounds obvious, but people underestimate how difficult it can be.
It’s all about following up. Help them stay on track, consistently. So they keep budgeting top of mind.
When done right—in this phase, new habits are formed and solidified.
At our nonprofit, we accomplish this with scheduled check-ins, automatic reminders, and easy tools and resources where they can track progress and keep the goals they set for themselves visible.
The goal is simple: cement core money management habits as way of life—and a way to empower one faster to their life goals.
And as a bonus, if you got to this point, hopefully the person you’ve been helping now feels they have someone they can trust and talk to.
Know someone struggling with their finances?
We can help. Our team at Neighborhood Trust Financial Partners has worked with 50,000+ workers across the country to conquer their finances and get out of debt for good. Learn more about our offering TrustPlus.