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UNITED STATES DEPARTMENT OF LABOR

An evaluation of the impacts and implementation approaches of financial coaching programs (Theodos et al., 2015)

Review Guidelines

Causal Evidence Guidelines

Absence of conflict of interest.

Citation

Theodos, B., Simms, M., Treskon, M., Stacy, C P., Brash, R., Emam, D., Daniels, R., & Collazos, J. (2015). An evaluation of the impacts and implementation approaches of financial coaching programs. Washington, D.C.: Urban Institute. [Miami]

Highlights

  • The study's objective was to examine the impact of financial coaching on financial behaviors. This profile focuses on the intervention based in Miami, Florida. The authors investigated similar research questions for an additional contrast, the profile can be found here.  
  • The study was a randomized controlled trial. The data sources included baseline and follow-up surveys and credit report data. The authors used statistical models to analyze differences in outcomes between treatment and control group members.  
  • The study found that a significantly higher proportion of treatment group participants had emergency funds and less total debt than control group participants.  
  • This study receives a high evidence rating. This means we are confident that the estimated effects are attributable to financial coaching, and not to other factors. 

Intervention Examined

Financial Coaching

Features of the Intervention

Financial coaching is a strength-based approach focused on behavior change that is tailored to an individual's financial goals. Financial coaching was provided by Branches, a faith-based social services organization in Miami, Florida. Participants met with a coach for an average of 2.7 sessions at Branches. Many participants only attended an initial session, which lasted 60-90 minutes. Initial sessions typically included a discussion of client goals and motivations, the development of a plan to reach a financial goal, and an agreement for the coach to check in with the participant at a future date. The target population was the Miami-Dade County community. There were no eligibility requirements. Individuals who participated in activities or services at Branches were asked if they were interested in financial coaching services.  

Features of the Study

The study was a randomized controlled trial. Recruitment took place between January 2013 and March 2014. A total of 514 people participated in the study, with 257 individuals each in the treatment and control group. The study sample were 53% male, 44% married, 61% Black and 35% Hispanic/Latino, with 89% employed. The average age was 44. The treatment group was eligible to receive financial coaching sessions, whereas the control group was not able to participate in financial coaching sessions until the study was over. The data sources included baseline and follow-up surveys and credit report data. The authors used a statistical model to compare the outcomes of treatment and control group members. The analysis included all members assigned to the treatment and control groups, which included participants assigned to the treatment group that did not participate in coaching.

Findings

Knowledge and skills for money management 

  • The study found that a significantly higher proportion of participants in the treatment group had emergency funds than participants in the control group. 
  • The study also found that treatment group participants had significantly less total debt than participants in the control group. 
  • The study found no significant differences between the groups in number of deposits into savings, total account balances, paying bills on time, having a budget, borrowing money from family/friends, or credit score. 

Considerations for Interpreting the Findings

The study reports a less stringent statistical significance level, considering p-values of less than 0.10 to be significant, though it is standard practice to consider statistical significance if the p-value is less than 0.05. Only results that demonstrate a p-value of less than 0.05 are considered statistically significant in this profile. Also, the authors used multiple imputation to impute income because 32 percent of applicants failed to report their income in the baseline survey. All models were robust to the inclusion or exclusion of imputed income.  

Causal Evidence Rating

The quality of causal evidence reported in this study is high because it was based on a well-implemented randomized controlled trial. This means we are confident that the estimated effects are attributable to financial coaching, and not to other factors.  

Reviewed by CLEAR

April 2024

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