Financial coaching helps break the cycle of living paycheck to paycheck

Sep 26, 2019 | Financial Coaching | 0 comments

Financial coaching services help you simplify your financial plan and break the cycle of living paycheck to paycheck.

“If I lost my job today, I would not be able to cover basic expenses in the immediate future.” 

Does the above sentence describe your current situation? If so, you are not alone. According to the most recent study conducted by CareerBuilder, 78% of all American households are living paycheck- to-paycheck. You likely heard this statistic a lot around the time of the 35 – day Government Shutdown of 2018-2019 concerning it’s overwhelming impact on the roughly 624,000 government employee households that were negatively affected by a disruption to their flow of income. So we’ll put the question to you in another way:

“If I were a government employee at the time of a government shutdown, could I weather the storm?”

According to the research, you likely answered Question 1: TRUE and Question 2: NO. Here are a few other facts they also discovered:

  • Every month more than 25% of Americans are spending every hard earned dollar they earn, saving nothing for an unexpected expense, emergency or retirement.

  • Approximately 75% of employed persons are in debt, many of whom feel defeated and convinced there is no other way to live their life.

  • More than 50% of workers making minimum wage claim that they have to work more than one job to cover their expenses.

  • Yet, despite all of this turmoil, the same survey found that only 32% of the full-time workers surveyed use a budget, only 56% save $100 or less a month.

These statistics speak for themselves and should force us to take a hard look at our bank accounts and do a deep dive in to our personal finances. But not too fast. Sadly, these statistics can’t just be chalked up to low income or a lack of discipline. As the concern for financial stability increases, the need for improved financial education and guidance has risen along with it. Our society continues to grow more complicated and expensive, yet the financial literacy of the average American is stagnant. According to the Council for Economic Education’s 2018 Survey of the States Only 7 out of 50 states require students to be taught personal finance in the classroom accompanied by standardized testing to ensure comprehension. Not only that, but the topics of financial planning and decision making are rarely a part of discussions with parents or family members in preparation for adult life.

This lack of knowledge in personal finances leaves Americans ill prepared for getting out of the situations they have stumbled their way into. Studies have shown a myriad of associated negative effects from financial stress. While it may only seem like an issue of monetary concern, the stress of making it from one paycheck to the next is negatively impacting our behavior, physical health, family relationships and career. Schools, banks, committees, councils, organizations, etc. are all aware of this trend and are starting to do something about it. One new trend is the rise of Financial Coaches/Counselors. These professionals serve their communities by helping each of their clients navigate their specific financial situation and assist them in reaching their financial goals. Thus decreasing the negative impact of financial stress on the rest of their lives.

Financial Coaches offer services such as:

  • Increasing financial IQ

  • Creating effective budgets

  • Setting financial goals

  • Developing a comprehensive financial plan

  • Getting out of Debt

  • Saving for large life events like having children or buying a car or home

  • Planning for retirement

Similar to a fitness trainer, a nutritionist or a guide on an expedition, financial coaches keep you focused, hold you accountable and encourage you to meet your goals.

“Let’s say you want to lose some weight but you need help creating a fitness plan and accountability to stay focused and disciplined. You would hire a Personal Trainer.

Your doctor instructed you to improve your diet, but you know nothing about nutrition. You would hire a Nutritionist.

You want to go on an expedition, but you lack some of the wilderness experience and the skills needed for route finding. You’d hire a Guide. 

Now let’s say you have dreams of being out of debt, owning a home (or a few) and retiring early but you don’t know where to start. You’d hire a Financial Coach!”

Through their services, financial coaches have a strong positive impact on local communities by improving participants overall quality of life. By ending the cycle of living paycheck to paycheck, clients are more likely to be able to cover emergency expenses, get out of debt and save for retirement. Allowing us to focus on the more important things in life.


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