CRM for Financial Coaching

We all want to live a life free from financial stress. The key to financial peace of mind is to live within your means, which is very easy to say and very difficult to follow. From unexpected expenses to gifts for the holidays, money always leaks out, making it challenging to stay within a budget.

Yet, there is one known secret to living within your means: spending less on what you earn. There are excellent tools to create and track a budget, from YNAB to Everydollar. The challenge is not how to create a budget. The biggest challenge is how to stick to a budget. We created a Savings Jar to help people to tackle the challenge of how to stick to a financial plan.

If we compare budgeting in money and budgeting in calories, both types of budgeting are challenging to accomplish. It’s challenging to resist a warn pizza late at night, like fighting an iPhone upgrade. The most significant difference between weight loss and sticking to a financial budget is that others notice when you lose weight while losing debt is a private thing. That public display of change keeps people on a diet motivated to continue on their journey to their desired weight.

The public of change display opens the door to extrinsic motivation. Extrinsic motivation is a reward-driven behavior. Each compliment about the weight loss provides an external award to keep on track.

One of the most significant challenges with responsible financial behavior is that it lacks extrinsic motivation for most people. People on their journey to financial peace of mind don’t receive envy looks from their neighbors as they will get by parking a new luxury car. It’s the opposite. We get awarded for displays of spending money, not saving it, regardless of the actual financial situation.

The primary motivation for being financially responsible is intrinsic motivation, driven by internal awards, which requires a higher level of engagement than extrinsic motivation. The challenge with getting people to stick to a financial plan is to keep them motivated to stay on track, knowing that it is complex to reach intrinsic motivation. Given the challenge of building intrinsic motivation, the challenge becomes how to generate extrinsic motivation to build momentum until intrinsic motivation kicks in.

People now use various tools to generate extrinsic motivation to stick to a financial place, such as social media and financial coaches. There are communities on social media where people share their progress towards their financial goals. Each post generates engagement in the form of likes and comments. Those likes and comments provide the extrinsic motivation needed to stay on track. The other form of extrinsic motivation is from financial coaches. Financial coaches are professionals that help people to build and stick to a financial plan. The process of opening up about finance to others increases accountability and provides a layer of extrinsic motivation.

We know that financial coaches play a significant role in getting people to stick to a financial plan. Then Savings Jar’s opportunity is to build a platform for financial coaches so they can serve more clients.

From interviewing financial coaches, we learned that one of the most significant challenges financial coaches face is that the process of financial coaching is mainly manual. There is no tool for the average financial coach to access and review their client’s finance in a secure way. Hence, the coach needs to waste time collecting the progress updates before the meeting rather than being able to log into a coaching app and see the progress proactively. For financial coaches, seeing the progress proactively in a financial coaching client management software will allow the financial coach to better prepare for a meeting and come up ready with suggestions on how to stick to a financial plan.

Savings Jar’s first product provides a secure way for financial coaches to keep track of their clients’ progress towards meeting their financial goals. With Savings Jar’s CRM for financial coaches, the financial coach logs in and invites the client to share their financial information. Once the client enters the data, the coach can proactively review the client's financial information, providing on-time financial coaching services.