Context

This is a dissertation paper produced as part of a Doctor of Education degree at Ball State University, Muncie, Indiana, USA. The aim of the study was to provide empirical evidence for the emerging field of financial coaching, investigating whether participants improved their credit scores after participating.

The study

The design of this study is quantitative, non-experimental, descriptive research to examine the extent to which financial coaching did or did not improve the credit scores of the participants. Data about 869 participants from six different financial coaching sites was used to test four hypotheses that had been generated through a literature review. These hypotheses were:

• Financial coaching improves the credit scores of its participants·
• Financial coaching has a greater impact on improving credit scores for women compared to men·
• Financial coaching has a greater impact on improving credit scores for young participants compared to the older ones·
• Financial coaching has a greater impact on improving credit scores for minorities compared to non-minorities.

Data was available for each participant on: coaching site location, gender, age, race, credit score prior to receiving financial coaching, and after the financial coaching had started. Methods that were used for analysis included a paired sample t-test and a hierarchical regression analysis. Data was analysed at both the collective and the site level.

Key findings

Information was available for each participant on: coaching site location, gender, age, race, credit score prior to receiving financial coaching, and after the financial coaching had started. Methods used included a paired sample t-test and a hierarchical regression analysis. Findings for the four hypotheses examined are as follows:

• When the six sites were combined, the last credit score was significantly higher than the first credit score, supporting this hypothesis.

• There was no gender difference in average credit scores. However, when comparing the average increase in credit scores, the females had a slightly higher increase than males.

• This hypothesis was not supported.

• This hypothesis was not supported.

The study concludes that:

Financial coaching may help participants to bridge the gap between financial knowledge and financial behaviour. By incorporating the coaching process, holding clients accountable, and aiding clients in setting Specific, Measurable, Attainable, Relevant and Time-bound (S.M.A.R.T) goals, financial coaches may develop trust and build a better rapport with their clients and as a result, may help adults build their family’s financial security.

When financial coaches incorporate adult education theory into their practice, more autonomous and social responsible thinkers may result, helping build an efficient economy.

Points to consider

• For those interested in financial coaching, the study includes a useful summary of existing research literature in this area.
• The report notes that the researcher was unable to determine the level of financial knowledge the participants have prior to receiving financial coaching services meaning there was no baseline measure. In addition, the researcher was unable to identify the participants who may have received any other advice (from friends and families) during the time they were receiving financial coaching services from one of the six sites.

Full report

Financial coaching: bridging the gap between financial knowledge and financial behaviour - full report