What is Financial Counseling?

Posted on 0 Comments 7 min read 46 views

Everywhere you turn, you’ll find service providers ready and willing to help you reach a certain life goal. Want to get in shape? Work with a personal trainer. Need a little help organizing your life? Enlist a life coach. Want to work on your batting average? Call up your neighbor who coaches Little League! Every industry you can think of has someone there willing to coach and encourage you to reach your goals and develop strong habits and routines along the way. But what about personal finance? Yes, there are financial advisors, investment agents, and accountants, but what about someone to help you learn the basics of how to better manage your money? Is there a budget coach out there?! Does that even exist?! Actually, YES!! Those budget coaches are called financial counselors — Accredited Financial Counselors® to be exact — and they are ready to help you reach your personal finance goals. 

What is financial counseling?

Financial counseling is an educational service provided in a group or one-on-one setting by a personal finance professional. Financial counselors use their experience and knowledge to help you build a strong financial foundation. They will work with you to identify your goals and act as your personal money coach and cheerleader as you embark on a new money management journey. 

Financial counselors can work with you to:

  • Develop a plan to reach financial goals
  • Understand how to manage your monthly finances
  • Create a plan to pay off debt or build credit
  • Understand your options for student loan repayment
  • Provide accountability as you work toward your goals
  • Offer support through financial transitions and challenges
  • Help identify areas of growth and strengthen positive financial habits
  • Navigate past and present money mindsets 
  • Understand how your environment and cultural background may influence money behaviors
  • Connect you to community resources and referrals

…and so much more!

How are financial counselors trained?

A personal finance professional who uses the Accredited Financial Counselor® (AFC®) designation is certified through the Association for Financial Planning and Counseling Education® (AFCPE®). Currently, the AFCPE has 3,600 Accredited Financial Counselors® (I am one of them!) across the U.S. and has been the standard for financial counseling and education services for the past 30 years. 

To become an AFC®, one must complete the following requirements:

  • Obtain proficiency in 9 core competencies that range from counseling methodology to basic money management, to educating clients about risk management and everything in between
  • Pass the 165-question certification exam
  • Complete 1,000 hours of experience
  • Abide by a strict code of ethics and 51 standards of practice
  • Once fully certified, complete 30 hours of continuing education every two years

Does that sound like a lot? That’s because it is! 

“Rooted in research, practice, and academia, the AFC® certification mark represents the highest standard of excellence in the field of financial counseling and education” (AFCPE®).

To maintain the highest standard, certification must be comprehensive. Not only are financial counselors trained in a variety of money topics and counseling frameworks, but they are also trained with a lens of cultural competency and perspective. This helps create a holistic financial counselor who is skilled at helping you build a financial foundation that seamlessly integrates into your unique lifestyle.

Financial counselors go through strenuous training because they are passionate and committed champions of financial capability. It’s no secret that financial education, confidence, and skillsets are often lacking in the U.S. Financial counselors are proud to stand in the gaps and provide a helping hand that creates lasting financial well-being in the lives of their clients.

Accredited Financial Counselors® vs. Certified Financial Planners®

Maybe you’re thinking, Financial counseling sounds great, but isn’t my investment advisor a financial counselor? Although some topics may overlap, and many professionals hold both certifications, there are a few distinct differences between these designations. 

Certified Financial Planners (CFP®) are extensively trained to help you create and develop a financial plan that ideally leads to wealth accumulation. Think of goals like saving for a child’s education, preparing for retirement, and strategic tax planning. CFPs are fiduciaries, meaning they must act in their client’s best financial interest when providing financial planning and investment advice. CFPs are registered financial advisors, but not all financial advisors who provide investment advice are Certified Financial Planners. Financial planners primarily manage investable assets. They might help you do some budgeting along the way, but they are mainly focused on growing your assets. 

Accredited Financial Counselors® (AFC®) on the other hand are more concerned with your day-to-day money management and improving your overall financial well-being. Financial counselors are also fiduciaries who are helping you create financial goals, like paying off debt or building credit, and work with you to manage your income responsibly each month. AFCs may educate you on understanding certain terms and topics related to investing or estate planning, but AFCs are not licensed to provide any kind of investment, tax, or estate planning advice or strategies. This is an important distinction!

I heard an analogy one time that makes comparing the two easy to understand. Think of financial services as a spectrum on a scale of 1–10. In the upper levels, like levels 6–10, you will have CFPs, tax, and estate planners helping you build wealth. However, to get to a place where you can start thinking about building wealth, you must first succeed at items like managing income and expenses, leveraging debt responsibly, and saving. These financial habits live in the 1–5 levels of our scale. This is where financial counselors help you develop lifelong financial cornerstones and — once you are ready — will help you find a licensed financial professional who can assist you in wealth accumulation strategies. 

There can be a lot of overlap between our two professions, and we often work together as one big financial network, referring you to the service provider who will best meet your needs. 

Industry variations

Financial Coach

A synonym you often hear related to financial counseling is the term “financial coach.” These are individuals who provide much of the same services as financial counselors, except they typically do not carry the AFC® designation and their conversation approach varies slightly from financial counselors. 

Financial Counseling

Financial counseling is more directive meaning financial counselors will guide you in conversation with certain frameworks to outline steps to reach a goal. Whereas financial coaching is more indirect, allowing for deeper self-exploration and reflection when creating unique action items. You might come end with the same action items from both conversations, but the route you took to get there is different. These are very similar approaches that are not mutually exclusive. In personal experience, although I carry the AFC® designation, I often switch between directive and indirective approaches when counseling my clients. It just depends on the conversation at hand and the larger goal my client is working toward. 

Financial Fitness Coach

The AFCPE® does partner with Sage Financial Solutions to provide certification as a Financial Fitness Coach. In addition, other entities certify financial coaches. 

Credit Counselor

Another term you might hear is “credit counselor.” These are personal finance professionals who specialize in debt and credit-related matters such as building credit and helping dispute errors on your credit report. Credit counselors are often employed by non-profit agencies. 

Where can you find financial counselors?

Financial counselors work in all kinds of fields! Most commonly, you can find financial counselors in academia, non-profit agencies, on military bases assisting families in the armed forces, or running their own financial counseling practices. 

The easiest way to find a financial counselor is to search on findanafc.org. Simply type in your zip code and connect with the counselor of your choice. 

You can also just ask around! Chances are your accountant, attorney, local non-profit, or other connections have a financial counselor in their network. As mentioned earlier, your CFP® might also hold the AFC® certification. 

What can I expect from working with a financial counselor?

Each counselor has a niche and unique process, but in general, your financial counselor will:

  • Help you assess your financial situation and develop goals to work toward
  • Educate on personal finance topics from money management basics to organizing business finances
  • Provide encouragement, resources, and accountability as you work toward your goals
  • Unless licensed in these areas, your AFC® will connect you with other professionals to assist you with your investment, tax, or estate planning needs

Budget Blueprints financial counseling

Now that you’ve read all about financial counselors, I’d like to introduce financial counseling with Budget Blueprints. Budget Blueprints provides 1:1 financial counseling services by an Accredited Financial Counselor® (spoiler: it’s me!). As an AFC®, I am passionate about helping individuals build the financial future they dream of. 

By specializing in financial fundamentals, I help you establish a solid financial foundation to effectively create that ideal financial life. I will work with you one-on-one on topics like:

  • Identifying financial goals
  • Creating a budget that works for your lifestyle
  • Building credit or paying down debt
  • Reviewing money behaviors, mindsets, and patterns 

Once we chat, you’ll walk away with a comprehensive, personalized Budget Blueprint that includes notes, resources, and tools that guide you as you introduce new money habits into your life. 

You’ll find that my services are priced at an affordable rate, with short program durations. If you are unsure about asking for financial help, I hope that my program makes you feel confident and in control of the amount of time that we work together, while still receiving the most value for money spent. Plus, the first meeting is free! If you feel like you may benefit from financial counseling, I’d love to get to know you. Please head over to the financial counseling page and fill out an inquiry form. I’ll be happy to answer your questions and help you begin to find clarity in your own financial life!

What do you think?

Your email address will not be published. Required fields are marked *

No Comments Yet.

DISCLAIMER: Although I do have experience in the personal finance field as an Accredited Financial Counselor® professional, I am not a registered financial planner, advisor, or investment agent. Budget Blueprints and any content or resources made available on this site is for informational and entertainment purposes only. I am sharing my personal experience which may not be applicable to others. I am not liable for any losses or damages related to actions or results related to the content in this website. If you need specific financial advice, consult with a licensed professional financial advisor/planner who specializes in your specific need area.