The public’s trust in banks tanked after the 2008 financial crisis and has yet to make more than a small recovery, Gallup polling data compiled by the American Enterprise Institute shows. Indeed, a decade after the crisis, only 30% of Americans said they had a great deal of confidence in banks, while 22% said they had very little or no confidence at all. Maybe that’s not so surprising, when you consider the misbehavior of banking giants like Wells Fargo, which opened more than a million fraudulent checking and credit card accounts for bank branch customers, and Capital One’s recent security snafu where 100 million credit card applications and accounts were accessed by a hacker.
Still, the local bank was once a place where ordinary people went for help. (Think Frank Capra’s Christmas classic, It’s A Wonderful Life.) And even in these days of fintech, direct deposit, and on-line bill pay, branches can still be an asset when it comes to winning over customers.
Capital One, the nation’s seventh largest bank in the U.S. based on consolidated assets, is trying to turn the bank branch into a consumer (and Millennial friendly) hangout. Since 2015, it has opened several branch cafes and has been offering free “money coaching” at these outposts.
That raises the question: would you trust a bank to coach you on your finances? My initial suspicion was the program must be a wedge to sell products to consumers — by getting face-time in a relaxed environment, it might be easier to sell me a new credit card to “fix” my money woes. Curious (and skeptical), I decided to go through Capital One’s money coaching program to see for myself what these sessions were about and how much help they might provide.
Background on Money Coaching at Capital One
In 2015, Capital One created its cafe concept at local branches. They are open to anyone, not only customers, and are equipped with free amenities such as coworking space and conference rooms. In a time where banks must compete with more fintech startups, it’s a back-to-the-future sort of strategy—a way to make the most of the brick-and-mortar expense of a real bank by gaining face time with customers.
Capital One started its independent life in 1994 as a credit card issuer spun off from a bank. It gathered deposits by phone, mail and on the web and didn’t have any branches until it started acquiring existing banks in 2005.
Located in major metropolitan areas, the cafes are community centers complete with free Wi-Fi, areas to sit and work, free conference rooms for nonprofits, ATMs and an in-house Peet’s Coffee franchise. You don’t need to be a Capital One customer to enter the cafe, but customers get half off their Peet’s purchases.
Lia Dean, head of bank retail/cafes and marketing, and a member of Capital One’s executive committee, describes the cafe as a new way to reimagine the traditional banking experience, while also helping consumers foster more positive relationships with their money.
“We just felt like there was an opportunity to take a clean sheet of paper and reimagine that in-person experience and that conversation around money,” Dean says. “It’s a little bit more of a relaxed setting so that this topic that is a little stressful to talk about, we’re trying to create an environment that actually supports people in improving their relationship with money.”
There are currently more than 30 cafes in the country with additional openings planned, including one in Atlanta. Capital One’s money coaching programs also began in 2015 as a complement to the cafes. The company describes the sessions as “judgment-free” and says they are designed to help people align their spending and financial management with their own values, beliefs and goals.
Since the program’s inception, Capital One says over 5,000 individual money coaching sessions have taken place all over the country, adding that number is the result of zero marketing push from Capital One.
“To date, it’s been very much a grassroots movement,” says Mira Megs Lathrop, co-founder of the money coaching program at Capital One. “But it’s still a very much untapped resource.”
Day One of My Coaching
Capital One knew I was working on a story for Forbes, so I was given white-glove treatment. My personal money coach was the program’s co-creator, Mira Megs Lathrop. Before joining Capital One in 2015, she worked as a life and money coach, had a brief stint at Merrill Lynch as an investment advisor and served as a certified financial planner (CFP) at Morgan Stanley. While she still occasionally serves as a money coach in the Capital One Cafe in New York City, she now spends most of her time working to develop other money coaches.
My first money coaching session involved a lot of background information: what the sessions are and how they’ll work. The most important aspect of these sessions was brought up immediately before we even dove into the work: This isn’t financial advising. You won’t be asked to share bank statements or credit card balances, and you won’t be told how to invest your money. This is simply guidance to: A) make you conscious about your relationship with money, and B) identify your goals and how to achieve them.
Since this was our first session, we spoke in detail about where I “want to be” with my money and what’s holding me back from getting there. My main focus, I decided, would be to figure out how to develop a more positive relationship with my finances and to come up with a solid plan to pay off my debt. Then, Lathrop suggested four lessons for me to choose from; I chose digging into my “inner guide.”
After identifying my “inner critic,” which says things like “You don’t make enough money, you’re an imposter, and you’re bad with money,” I was asked to channel my “inner navigator.” What would someone who cares about me say in response to my inner critic? Those thoughts included much more positive terminology toward myself. The exercise sounds cheesy, but it shifted my perspective profoundly. Still, I took this as an “in the moment” feeling and was dubious about how long it would last.
Today’s overall takeaway
Day one left me with a heightened awareness of how I interact with my own finances. I also walked away with things to work on during my own time, including categorizing all my debt on a spreadsheet.
One thing that surprised me the most: There was zero discussion of any Capital One product, which I appreciated. I also mentioned that I don’t follow a budget, and Lathrop explained how they generally use the term “money plan” instead of budget, because it eliminates the context of constraining yourself and limiting yourself. I left the session feeling positive, but I did have one lingering thought in my head: So, what’s the catch?
I was still feeling more positive about my relationship with money when I walked into my second session. Before this session, I created a spreadsheet with my debt along with dates when each amount will be paid off — I didn’t feel comfortable sharing it with Lathrop, and she didn’t push me to do so.
I chose to tackle my debt using the snowball method, which pays off the smallest debt first and then works its way to the biggest, most weighty debt. I’m not sure if a “regular” person going to money coaching (as in, someone who isn’t familiar with the personal finance space) would know to choose a payoff method like this.
Today felt much more informal than the first day, maybe because I knew what to expect. Lathrop and I spent time talking about my plans for the future. I’ve always considering going to graduate school at some point and one day I’d like to move overseas. We decided to explore these options and what they would look like.
We wrote out three scenarios on an iPad: Move overseas and work, move overseas and go to school, or stay here and continue on my current career path. We discussed what each scenario could bring to my life, including the good and bad. Today was much more conversational.
Lathrop reiterated that money coaches don’t have all the answers, but they have the resources that can help people figure out their own journeys. I appreciated someone not telling me that quitting a great job and going to graduate school (and taking on more student loan debt) is a “bad” idea.
Today felt more like a life coaching session than a money coaching session. I did walk away with a clearer picture of what my future could look like, but it didn’t feel as effective as the first session. There were a lot of unknowns — which is the best decision? When do I want to make a decision? How will I come up with the money? Am I just being impulsive? These are questions I have to mull over on my own, obviously. But I didn’t exactly leave with any solid plan or vision.
After my session, I did create a spreadsheet to entertain the pros, cons and costs of graduate school, but I didn’t come up with any solid plans or action steps. It still felt like a whimsical dream.
This was my last session. Walking in, I wasn’t sure if there was much more for me to “discover” about my relationship with money; I was skeptical about how helpful today could be.
Together, Lathrop and I chose to focus on my spending. I wasn’t asked to pull out any credit card statements or reveal how much I spend each month. Instead, I grouped together things I need to spend money on and things I want to spend money on. I also identified what I’m not currently spending on, but would like to, which included sending my mom some extra cash each month.
I was able to identify something I spend money on that doesn’t align with my values: Ride shares. I pay over $100 a month (pre-tax) to use the New York public transportation system. Forsaking the subway and indulging in an Uber or Revel scooter is what I identify as “leakage” in my budget. Instead of doing this, I could spend the money on something more meaningful, like my mother’s rent. I also calculated I could save a good chunk of money by being more mindful about how often I grab a coffee before work or eat out for lunch.
These small changes, such as not getting a coffee every day and taking my lunch to work, are obvious—so obvious they’re almost a cliché. Yet it felt rewarding to imagine that money going somewhere more meaningful to me. We completed our session and Lathrop gave me the option to keep in touch with any questions or updates about my relationship with money.
I wasn’t asked to sign up for anything after today’s session, either. There was no discussion about putting my debt on a Capital One balance transfer card to save on interest, which I thought might be the way to reel me in and make me a customer.
Can These Sessions Really Help?
Overall, I felt like Capital One’s money coaching sessions did a great job of making me more at ease when discussing my own finances. There were still things I didn’t want to share, including my total debt figure, but as Lathrop told me, this isn’t meant to be financial advising. Regardless, I felt that pang of distrust in the process.
My overall experience, however, was positive. I have never been through money coaching before, though, so I have nothing to compare these sessions with. When I reached out to Deborah Price, CEO and founder of the Money Coaching Institute (from where Lathrop received her own money coaching credentials), she said Capital One’s program “barely scratches the surface” of true money coaching.
“What they’re really doing is a version of life coaching,” Price says. “It’s about an inch of what we do.”
According to Price, the creator of real money coaching, Capital One’s money coaching sessions don’t cut it. They don’t get to the heart of true behaviors behind interactions with money, which often stem from childhood observations of how our parents interact with money. But she does give Capital One credit for doing its part to end what she describes as “the last taboo” — talking about our finances. “They’re at least opening the conversation up, which is good,” Price says.
I agree. I didn’t walk out of the cafe with an epiphany about my finances. My behavior with money hasn’t completely changed. I’m more aware, but still chose to take a scooter ride the weekend after my last session instead of taking the subway, and I won’t be sending my mom money this month.
Lathrop, who disagrees with Price’s characterization of Capital One’s program not being true money coaching, adds that it’s intentionally a blend of life and money talk.
“What we’re offering in the Capital One money coaching is what’s possible in offering these three free sessions,” Lathrop says. “Real in-depth money therapy, the much deeper stuff, is similar to therapy where you would meet with someone for six months. That deeper work definitely requires further levels of training and time. This is like life coaching for your money, and it’s the level most people coming in are imagining they will receive.”
I don’t know what’s next for me, but I do know I’ve already paid off two lingering credit card balances since my last money coaching session. Some critics might say Capital One isn’t digging deep enough into redefining our interactions with money, but is it fair to criticize it for helping 5,000-plus people take the first step?