What is Financial Counseling? (And Do You Need it?)

Do you struggle with your finances? Do you find yourself spending too much, not saving enough, or simply lacking a long-term financial plan? 

Money is a major source of stress for many people. And it’s one of those things that is often really difficult for people to talk about. If you feel like you could use some help to get your financial life in order then you might want to check out financial counseling. 

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What is financial counseling? 

Financial counseling typically occurs in one-to-one client sessions where the purpose is to help guide clients toward making financial improvements that meet individualized goals outlined by the client and counselor, according to the National Financial Educators Council. 

A financial counselor will usually begin with an analysis of their clients’ current financial situation. They will inquire about their clients’ financial habits, behaviors, and attitudes. Then, working together, the counselor and client will set clear and achievable objectives to improve the clients’ overall financial health. 

Why should you consider financial counseling?

There are a number of reasons that you might want to connect with a financial counselor, including:

• Participating in unhealthy financial behaviors (shopaholic, gambling, hoarding money)
• Difficulty dealing with your finances (avoiding opening bills, struggling to pay off debt) 
• Money is causing relationship issues with your partner (you are hiding money issues, lying about money, being too controlling with money, etc.)
• Financial issues are causing you to feel especially stressed out or depressed 
• You just need help getting your financial life in order or you feel like you would benefit from speaking to someone 

The bottom line, if you feel like you need help getting your financial life in order and could benefit from speaking with someone knowledgeable in this area, then try it out. We all need someone to talk to when we are feeling stressed or anxious about something. Money is no different. However, a lot of people feel very uncomfortable talking about their finances with their family or friends. 

A financial counselor is a great choice for people who want an objective person to help them set financial goals and provide counseling and education that will improve their financial life.

What are the benefits of financial counseling? 

Anyone who is struggling with their finances in some capacity is a good candidate for financial counseling. You don’t have to wait until you’re experiencing bankruptcy or foreclosure before you reach out. The benefits of getting financial counseling can include: 

• Getting to the bottom of your financial behaviors, emotions, and actions. Understanding the root cause will allow you to address your money problems and make more positive changes.
• You can work with a qualified counselor to set up a financial plan that will help you to achieve your financial goals (debt repayment, increase savings, etc.) 
• A financial counselor provides a non-judgmental ear to listen to all of your financial troubles. 
• The right financial counselor can help you and your partner work through some of your money issues together. 

Financial counseling options

When it comes to finding the right financial counselor for you the process might require some interviewing. The first counselor you meet with might not be the right fit, that’s normal. 

It’s also important that you are aware of the qualifications that are necessary to be considered a financial therapist/counselor. 

According to the Financial Therapy Association, to be a certified financial therapist the individual must meet specific educational and experience requirements in three areas: 

1. Financial therapy
2. Financial planning and financial counseling
3. Therapeutic competencies

Certified financial therapists also adhere to fiduciary standards, which means they put your interest ahead of theirs. This is an important designation to look for as it helps to avoid any potential abuse of the client/therapist relationship. 

When you start your search for a financial counselor you may find that financial professionals are offering counseling services that lack the therapeutic education and experience. Similarly, there will be therapeutic counselors that lack the financial education and experience. It’s important that you ask a lot of questions and find a counselor with the qualifications that you are comfortable with. 

If you want a certified financial therapist, you can use the Financial Therapy Associations website to search in your area. 

You can also decide on how you want to receive financial counselling. Do you prefer in-person financial counseling or a distance option (telephone or online video chat)? Distance options are great for people who live far away from in-person financial counseling services but would still benefit from talking to a qualified counselor in order to reduce their financial stress. 

Cost of financial counseling

If money management is an issue for you then finding affordable financial counseling is obviously important. The cost of counseling varies widely based on location and individual providers. You will need to do some research to find a provider that works best for you. 

You should also contact your insurance provider to see if your plan covers the cost of a financial therapy session. For people with low incomes, there are providers who offer a sliding scale method of payment.

Finally, you might be able to find some free options by reaching out to some not-for-profit counseling agencies. Many of these agencies offer assistance with everything from credit counseling to help with debt consolidation and student loan counseling.  

How financial counseling can help you manage debt

If you are feeling dragged down due to the emotional effects of debt or other money issues, financial counseling might be the answer you’re looking for. 

A qualified financial counselor can work with you to create a budget and financial plan that will help you to manage your debt. They can provide advice and recommendations to help you get your head above water. 

They can also help you to deal with the emotional side of your money. Debt can be extremely stressful and can bring up a lot of negative feelings and emotions. The right financial therapist can help you to deal with both the financial planning side of your money as well as the emotional side. They can help you to develop a healthier money mindset and work toward changing negative financial behaviors. 

Will you seek financial counseling?

Money is emotional, there is no debating it. Money is also one of those topics that many people find difficult to talk about. If you don’t feel comfortable discussing your money issues with a family member or friend, consider seeking the advice of a financial counselor. Not only will they offer a non-judgmental ear to listen, but a certified financial counselor can also offer personalized financial advice that can help you achieve your money goals.

–By Jessica Martel