Basic Counseling Principles PDF

BOOK ONE:
BASIC COUNSELING PRINCIPLES

NFCC Counselor Certification 2005V1
2005 Copyright by the National Foundation for Credit Counseling.

All rights reserved.
Book 1 - Basic Counseling Principles
Book One - Basic Counseling Principles

Table of Contents
Page Number
Chapter 1: Basic Counseling Principals

NFCC Member Quality Standards
NFCC Counselor Code of Ethics
Roles of the Counselor
Distinguishing Financial Counseling from Financial Planning
Conflict of Interest
Confidentiality
The Counseling Process
3
3
4
6
6
6
6
Chapter 2: Communicating Effectively

The Communication Process
Overcoming Barriers to Effective Communication
Verbal and Nonverbal Communication
Listening
Questioning Techniques
Pacing as a Response Technique
Four Steps to Communicating with Clients
Facilitating Client Communication During a Session
10
10
10
11
13
16
17
20
Chapter 3: The Counseling Relationship

The Building Blocks of Counseling
Establishing Rapport and Trust
Making Referrals
21
22
22
Chapter 4: Diagnosing Problems and Understanding Client Values

Diagnosing Financial Problems
Understanding Client Values
Cultural Values
24
26
27
Chapter 5: Crisis Intervention and the Need for Change

The Sequence of a Crisis
Counseling Intervention to Diffuse a Crisis
Special Counseling Circumstances-Suicidal Threats from Clients
Dealing with Barriers to Change
29
30
30
31
Chapter 6: Life Events, Family Structure, and Financial Management

Life Events
Counseling Clients at All Income Levels
Government Programs for Clients with Income Problems
Employment Issues
Non-Traditional Households
35
36
39
40
41
Counseling the Transition from Marriage to Divorce

Financial Concerns About Divorce
Financial Considerations During Divorce
The Aftermath of Divorce
Gambling Addictions
42
43
45
45
46
Chapter 7: Counseling Effectiveness

Analyzing Counseling Effectiveness
Characteristics of an Effective Counselor
48
48
Appendix
Community Resources, Agencies, and Organizations for Referring Clients
NFCC Member Code of Ethics
50
55
56
CHAPTER 1
BASIC COUNSELING PRINCIPLES
As a counselor you will work within the framework of the standards of the National Foundation
for Credit Counseling (NFCC). NFCC member agencies and employees must abide by the
NFCCs Member Code of Ethics and Member Quality Standards which assure that clients
seeking to achieve financial health are treated fairly and ethically. See Appendix: NFCC
Member Quality Standards.
NFCC Counselor Code of Ethics

As a counselor, you are also expected to act professionally and with the highest standards. The
NFCC Counselor Code of Ethics, listed below, outlines proper ethical behavior and standards for
counselors. See Appendix: NFCC Member Code of Ethics.
Counselors will maintain high standards of ethical conduct and behavior in accordance with the
objectives of the National Foundation for Credit Counseling, Inc. . Such standards include,
but are not limited to, the following:
Integrity
Honest.
Fair.
Fiscally responsible in dealing with clients funds.
Consistent in word and deed.
Respect for the integrity of the client.
Promotion of the clients best long-term interests.
Avoids situations leading to potential conflict of interest.
Maintains professional counselor/client relationship.
Conducts oneself in a professional manner at all times.

Competence
Strives for continuous improvement in oneself and the profession.
Acknowledges personal limitations.
Empathizes without being enabling.
Refrains from giving legal advice.
Refers to others when clients problem is beyond the scope of ones

expertise.
Stays abreast of economic changes, creditor policies, etc. which will affect
clients and the counseling process.
Provide proper documentation of cases.
Works toward and maintains certification.
Contributes to the professionalism of the field.
Holds the respect and cooperation of the colleagues.
Confidentiality
Respects Clients privacy.
Provides information to those outside of the agency on a need-to-know

basis with the clients permission.
Handles clients files with due diligence for safekeeping.
Takes considerable care in internal discussions to maintain clients privacy

regarding their situation and possible outcomes.
Fairness and Objectivity
Unbiased and non-judgmental.
Serves as a reliable third party in the relationship between client and

creditor.
Establishes Debt Management Plans when necessary based on the equitable

treatment of creditors.
Provides clients information with which to make informed choices.
Recognizes and respects differences in clients value systems, culture, and

decision-making processes.
Non-discriminatory with regard to age, gender, race, creed, national origin,

sexual orientation, social position or financial status.
Forthright in discussions pertaining to agency funding, policies and

procedures, the services provided and fees charged.
Roles of the Counselor

As a counselor, you play many roles in working with clients. Depending on each client's unique
needs, you may be:
a change agent;
a source of support;
an educator;
a resource consultant; and/or
a preventive counselor.
Change Agent
In this role, you help clients work toward changing their income, expenditures, investments,
methods of solving problems, and patterns of communication. You also help clients make
changes to develop a positive self-concept as they deal with financial crises, establish financial
priorities, make changes in plans for developing an economically secure future, make changes in
debt management and make changes in the household budgeting system to improve control over
family finances.
In your role as change agent, you can help clients identify, acquire, and manage resources more
effectively during times of transition. When clients are changing from one stage of life to
another, or experiencing other transitions, you can work with them to clarify the resources
needed and the decisions to be made. For example, clients experience transitions when financing
a college education, going through a divorce, changing a job, or caring for elderly parents.
In addition, you can help clients think about changing their resources, attitudes, lifestyles, and
behaviors as they wean themselves away from credit or begin to reestablish credit at a prudent
level. You may provide information for generating and evaluating alternatives as your clients
make decisions and plan for handling changes that will lead to economic security.
Source of Support
Clients look to you for support and understanding during difficult times or crises. You can
empathize with a client's feelings about losing a job, being sued, not knowing how to handle
finances, or being denied credit because of past mistakes. With your help and support, clients can
learn to overcome fears, real or perceived, that would prevent meeting their financial goals. This
requires that you have integrity, compassion, and good interpersonal relations, and show an
urgent concern for the client's well-being.
Clients in crisis can feel reassured by your assistance and your ability to help them relieve
immediate stress. Some clients need the reinforcement and encouragement you can provide as
they make decisions, implement plans, and work toward resolving problems or achieving goals.
Because you are available to help and not to ridicule or make judgments, clients can feel more
confident about disclosing personal information and discussing mistakes.
Educator
Many clients have problems because they do not understand the complexities of credit, the credit
process, or the consequences of mismanaging financial resources. You can educate clients about
how to budget, how to manage money and credit, and how to develop a workable system of
household financial organization. Often, clients need to be shown that what they decide today
affects their tomorrow.
In your role as educator, you can also offer tips about consumer shopping skills and practices,
including buying household goods, housing and transportation. Many clients need education
about consumer rights and responsibilities as well as education about saving for short- and longterm goals. Some clients will also need to be educated about various financial services offerings,
such as investments and insurance. Education can be informal or formal, through one-to-one
counseling, group programs, media, internet, or volunteer programs.
Resource Consultant
Because of your experience working with clients who face a variety of challenges, you can offer
many creative ideas and specific insights about finding and managing resources. In addition to
assessing each client's available income, employee benefits, credit, and other financial resources,
you can assist in identifying and drawing on the client's personal resources -- such as inner
strength and special skills.
Furthering your contacts within the community and referring to your organization's Community
Resource Guide will enable you to suggest additional resources available to clients.
Preventive Counselor
Preventive counseling is used to guard against future financial difficulties and may take two
distinct forms: immediate and long-range. Immediate help is required when an unexpected event
occurs, such as an auto accident, illness, or death in the family. Preventive counseling helps to
keep an individual from getting into excessive debt or helps by creating a realistic savings plan.
This type of counseling focuses on preventing pitfalls and maximizing the chances to achieve
financial goals. The counselor can look for ways to encourage clients to save for emergencies
and difficult times such as a layoff or an unexpected illness. Long range counseling can also
help clients learn to set aside funds for regular future expenses such as car or home repairs, gift
giving or vacation planning.
Distinguishing Financial Counseling from Financial Planning

The process and outcome of financial counseling is not the same as financial planning. Financial
counseling through credit counseling organizations is primarily geared toward helping clients
learn to effectively plan and manage current financial resources through budgeting, appropriate
use of cash and credit, and disciplined credit repayment. Many financial counseling clients are
already in a crisis when they seek agency help. The goal is to help clients resolve problems,
become self-reliant, and make their own decisions without continuing counseling assistance.
In contrast, financial planning helps clients evaluate their financial resources and set up a money
management plan for reaching long-range life goals. According to the Certified Financial
Planner website (www.cfp.net/learn/) the process involves assisting clients in gathering relevant
information to help come up with a savings and investment strategy given the current financial
situation and future financial needs of the client.
Conflict of Interest
A conflict of interest is a situation in which a counselor might jeopardize the rights or interests of
a client through involvement or contact with someone else. It is important to avoid any potential
conflicts of interest that may arise in a counseling session caused by your personal or
professional relationships. If such instances occur, it is a best practice to refer such individuals
to another counselor or a different agency. If you are unsure if a conflict of interest exists,
discuss the situation with your supervisor.
Confidentiality
One of your most important professional responsibilities is to safeguard client confidentiality.
You must never release any client information without written authorization from the client.
Also, never discuss clients or specifics of cases outside of the agency environment.
The Counseling Process

The counseling process has six components which proceed sequentially. These are:
1) Diagnosing problems
2) Setting appropriate goals
3) Specifying Objectives
4) Generating and deciding among alternatives
5) Preparing action plans
6) Implementing and evaluating plans
For your agencys specific counseling process, see your Statement of Counseling Services.
The counseling process usually follows a circular rather than a linear path. This is because the
sixth step, implementing and evaluating plans, can lead back to earlier steps if a progress check
shows that the results are not as expected. Then the counselor and client may decide to revise
the diagnosis, reexamine goals and objectives, find new alternatives, change the action plan, or
change the implementation.
1. Diagnosing Problems
Before you can help your clients, you have to understand their financial circumstances and
diagnose the problems that concern them. Gathering information about your clients' finances and
problems is accomplished using questioning techniques, imperative statements, and other
communication techniques. Each individual counseling organization has its own procedures
regarding the information gathering process as a guide to summarize data about each client's
financial situation. You also prepare a budget/spending plan to analyze the client's income and
expenditures.
As you continue to build rapport and trust during the counseling interview, clients will gain
confidence and be encouraged to disclose sensitive concerns they may initially be reluctant to
reveal. Without applying excessive pressure, you should probe for more details so you can get an
accurate picture of what your clients face.
2. Setting Appropriate Goals
Now that you and your client understand the situation and the problems at hand, you can move
on to set goals that will lead to resolving those problems. There are two types of goals: process
goals and outcome goals.
The counselor is responsible for process goals, targets for building a productive relationship that
will support the client in resolving problems and achieving desired goals. Clients are responsible
for outcome goals, targets for getting out of problems and moving toward results they want to
achieve.
To be effective in guiding client actions and decisions, outcome goals should be specific,
achievable, and measurable. Vague goals don't help clients plan decisions and actions. In
contrast, a specific goal says exactly what a client expects to be able to do. If the goal is
achievable, it will encourage the client to take action. However, if the goal is unrealistic, it will
wind up discouraging the client. By setting goals that are measurable, the client can monitor
progress and determine when the goal has been achieved.
Goals, objectives, and alternatives should be developed in the context of a client's individual
values. At times, your personal values may differ from those of your clients. Nonetheless, bear in
mind that clients will be most strongly motivated to work toward goals and objectives and to
select alternatives that fit with their values and life experiences.
3. Specifying Objectives
Few people can achieve their goals right away, especially if the goals relate to long-range issues
such as saving for a comfortable retirement or planning to fund a child's college education. For
this reason, clients need to set interim objectives that will guide their behavior in the days,
weeks, and months leading up to the time when they expect to achieve their goals. As with goals,
objectives must be precise, achievable, and measurable.

The following examples are clearly stated objectives that clients might set:
"I will decrease my living expenses by January 15th." (Ideally, client specifies a target
amount for the decrease.)
"I will adjust my debt payments so that by March 15th my payments will be $100 less
per month than they are now."
Such objectives act as milestones that show the client how far he or she has come toward the
ultimate goal. Every time clients meet their interim objectives, they are that much closer to
accomplishing their longer-range goals. This encourages them to believe in themselves and
continue working toward their goals.
4. Generating And Deciding Among Alternatives
Now that your clients know what they want to achieve and have set interim objectives for
moving toward those goals, it's time to think about how they can accomplish the desired results.
First, ask clients about possible alternatives they have been considering and about alternatives
they have already tried. Wait to suggest additional alternatives until after clients have mentioned
a number of ideas. In this way, clients begin to feel that they are regaining control and have the
ability to resolve their own problems.
At times, clients may seem resistant or offer objections to potential solutions. Under these
conditions, you can only offer ideas and suggestions and allow the client to decide what course
should be taken. You will want to stress to clients that no one solution is right for a particular
problem. By coming up with a number of options, clients can consider a wider range of choices
as possible solutions. Some research may be needed to help clients identify additional options.
Also remind clients to consider the short- and long-term consequences of the various alternatives
they generate.
Although you will want to offer suggestions, ask pertinent questions, and mention the
consequences of specific alternatives, remember that the decision is the client's alone to make.
The goal in counseling is to help clients learn to handle financial decisions on their own. Only by
learning to choose among alternatives, make sound decisions, and evaluate the results can your
clients develop the skills they need to manage their financial matters without help.
5. Preparing Action Plans
A written Action Plan based on the clients particular needs is imperative to successful resolution
of the clients needs. Per the Council on Accreditation FMDC standards, an action plan will
contain:
Evaluation of the clients need for services
Summary of the clients financial situation including income, living expenses, debt, and
housing issues
Client goals and responsibilities
List of the array of potential options available to the client, including bankruptcy as
applicable.
Developed with the clients participation and a copy given to the client
Focused on timely resolution of the clients needs and based on the urgency of the
problem and the length of time needed to achieve appropriate results
To create a plan with the characteristics listed above, help clients determine the real cause of the
problem and identify the resources that can be applied to solving it, including personal, family,
and community resources. Next, work with clients to clarify their goals, their alternative
solutions, and the criteria for deciding among their alternatives. Examples of general alternatives
for clients to look at include options for increasing income, decreasing expenses, looking for
ways to reallocate how debts are paid and identifying what assets are available to resolve
financial concerns.
After they have decided on a course of action, you can help clients plan action steps and set a
schedule for taking those actions. Writing the action steps down with the client will help
strengthen the proposed plan. Urge clients to take the lead in preparing action plans, so that they
gain confidence and feel more commitment to carrying out plans.
6. Implementing and Evaluating Plans
Positive and negative feedback come into play during implementation and evaluation. You can
use positive, constructive feedback to reinforce continuation of client actions that lead toward
goals. Even if a client has not taken every action in the plan, you can show support for the
actions that were taken. You will also want to tactfully point out actions that move clients away
from their goals.
In this way, you can maintain a productive relationship with clients. Clients may need additional
counseling at a later date to help them return to an earlier part of the process to revise the
diagnosis, change goals or objectives, come up with other alternatives, revise the plans or change
the way the plans are being implemented.
CHAPTER 2
COMMUNICATING EFFECTIVELY
The Communication Process
The counseling process depends on clear, effective communication between counselor and client.
Communication is the exchange of information to share meaning. In exchanging ideas, you and
your clients can use both verbal and nonverbal communication. Verbal communication is the use
of language, such as the words in a conversation or a letter, to share meaning. In contrast, sharing
meaning through nonverbal communication involves the use of body language, voice qualities,
and other methods, rather than words.
The communication process has five basic steps:
1) The sender has an idea.
2) The sender formulates a message -- including information and/or emotions -to share the idea with a receiver.
3) The message is sent through a medium, such as a spoken sentence or a written letter.
4) The receiver gets the message and understands its meaning.
5) The receiver responds to the sender by indicating that the meaning has been
understood or by reacting to the content with a message sent in return.
Overcoming Barriers to Effective Communication

There is more to sending and receiving a message than the mere exchange of words or gestures.
As each individual comes from a different background, experience, or culture, different
meanings are placed on the words expressed. A certain word used by the sender may arouse
strong emotions in the receiver, preventing the receiver from grasping the sender's true message.
"Debt," "budget," "bankruptcy," "welfare" and of course "deadbeat" are examples of such
emotionally charged words. Be aware of your client's possible reaction to such words and be
careful to select words that will express your meaning without triggering an emotional response
that gets in the way of sharing ideas.
A common difficulty with verbal communication is that most people can listen much faster than
someone can speak. A person speaks at an average of 125 words per minute. Since listening
occurs at roughly 400 words per minute, there is a strong tendency to think ahead of the person
who is speaking.
In a counseling situation, the counselor may wrongly assume that he or she knows what the
client is going to say, or may think ahead, lose track, and then fill in with his or her own
assumptions.
Verbal and Nonverbal Communication

Facts, figures, and information are easily expressed through verbal communication. On the other
hand, feelings, emotions, attitudes, biases, and prejudices are often conveyed without words,
using nonverbal communication. Nonverbal communication takes place through posture and
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body position, facial expressions, voice inflection and tone, rate of speech, gestures and
mannerisms, and body movement.
Some elements of body language are used consciously and deliberately, including gestures such
as handshakes, waves, and smiles. But often counselors and clients are not aware of other actions
that communicate a message nonverbally, such as tight muscles, raised eyebrows, clenched fists,
faster breathing rate, and the space or distance between themselves and others. Even when
people are not consciously aware of these signals, they may still be receiving and responding to
the nonverbal messages from the sender.
You will also want to keep the steps of the communication process in mind as you work with
clients. Avoid the barriers that prevent sharing of meaning by making a special effort to be
accurate and consistent in conveying your message. Also train yourself to be more perceptive
and alert to the subtle messages that your clients are sending during an interview.
Listening
Listening is the process that links the sender and the receiver in the communication process. Both
client and counselor need good listening skills, because a real exchange of ideas can occur only
when each listens to the other. Effective listening helps forge a closer relationship between the
counselor and the client, allowing them to work together successfully.
When you actively listen, you do more than simply hear someone else's words. Active listening
is actually a five-step process:
Step 1. Attend to the person who is speaking by focusing on his or her words and nonverbal
signals -- and screening out any other sounds. You can use posture, eye contact, and other
nonverbal signals to show the speaker that you are paying close attention when conducting an inperson counseling session.
Step 2. Interpret the verbal and nonverbal cues being sent by the speaker so you can grasp the
meaning. During telephone or Internet counseling sessions, be aware of pauses in the
conversation and/or omission of information.
Step 3. Remember the message, especially the significant details you may need to help the client
later.
Step 4. Evaluate the message to determine whether it is complete and accurate.
Step 5. Respond to the sender's message by offering feedback. Feedback shows that you have
received and understood the sender's meaning. It also continues the two-way flow of information
that is critical to establishing and maintaining a good counseling relationship.
In a counseling situation, you will want to listen and react with empathy and compassion. Clients
-- especially new ones -- may feel nervous, discouraged, humiliated, or have other strong
emotions that are not verbally expressed. Therefore, be aware of what may be happening under
the surface as people speak.
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Barriers to Active Listening

Eight suggestions for overcoming barriers to effective listening (from Dr. Ralph Nichols):
Barrier 1. Hop-skip-jump listening. Because people can think faster than speakers can talk, a
counselor may inadvertently begin to daydream or drift into other thoughts while the client is
speaking.
Suggestion: You can overcome this barrier by using the extra listening time to concentrate on
what is being said and relate it to what the client said earlier in the session.
Barrier 2. Fact listening. Listening for facts alone can be confusing and cause you to overlook
information about the client's attitude and disposition.
Suggestion: Concentrate on identifying the client's main idea and on the feelings the client is
expressing so you can address key issues and concerns.
Barrier 3. Emotional deafness. Emotionally charged words and phrases (like "deadbeat") can
stir up the listener and interfere with the exchange of ideas. Likewise, deeply held opinions or
prejudice will negatively influence good listening.
Suggestion: To overcome this, learn to recognize your emotional reactions and make a strong
effort to put them aside as you listen.
Barrier 4. Premature dismissal. When you believe that you know what the client is going to say
before it is said, you will prematurely tune out the client's message. If you do this, you may be
missing important details.
Suggestion: You can train yourself to avoid jumping to conclusions and hear the client out.
Barrier 5. Facade attention. Sometimes counselors may act as if they are listening and
interested, but they are not really paying close attention to their clients. This is often apparent to
the client.
Suggestion: Show respect for your clients by giving them your full attention.
Barrier 6. Uncritical inference listening. In this case, the counselor listens to what the client is
saying but makes illogical leaps or faulty inferences not warranted by the facts.
Suggestion: At appropriate times, summarize your interpretation of what the client has said and
ask the client to confirm or correct your interpretation.
Barrier 7. Yielding to distraction. Communication is disrupted when a counselor permits office
routine, phone calls, staff interruptions, or other distractions to interfere with the counseling
interview.
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Suggestion: Show courtesy toward your clients by minimizing the possibility of distractions.
Barrier 8. Pencil listening. Note-taking seldom improves listening. You may become so
involved in writing that you miss what the client is saying. Although notes are sometimes
necessary, be careful that this does not interfere with effective listening.
Suggestion: If you must take notes, jot only a word or two to jog your memory so you can
complete your notes after the session is over. Tell the client that you may jot a note or two so
that you dont forget something that you want to come back to.
Positive Listening Habits
To build a strong working relationship with a client through effective listening in an interview,
you will want to develop the following six habits:
1)
2)
3)
4)
Limit your talking to half or less of the time spent with a client;
Be alert to the client's verbal and nonverbal signals;
Listen for understanding, not to prepare a rebuttal;
Mentally reconstruct the client's problem as it is being discussed to reinforce your
understanding and clarify key points;
5) Concentrate on the client, not on your personal thoughts;
6) Mentally analyze and evaluate the client's points, sifting fact from opinion.
Offer internal summaries (briefly recapping ideas in the middle of a conversation) to confirm
with the client that you understood what was being said. Review and summarize at the end of the
session to confirm mutual understanding of what was communicated and what happens next.
Questioning Techniques
During a counseling interview, you can use two major types of questions to elicit information
about a client's situation, challenges, values, and goals. Primary questions are key questions that
help you bring out significant information. Secondary questions are probes used as follow-ups to
explore vague or incomplete responses to primary questions.
Primary Questions
Among the types of primary questions you can ask in a counseling session are:
1. Closed-ended questions
2. Open-ended questions
3. Hypothetical questions
4. Leading questions
A closed-ended question is phrased to obtain a specific, limited response from the client.
Examples of closed-ended questions:
How old are you?
What is the name of the collection agency?
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Closed-ended questions are helpful when you want a brief, concise response and when you want
to reduce the amount of irrelevant information offered by the client. In some cases, a closedended question is phrased so that the client can answer with a simple yes or no (or true/false).
Alternatively, the question can offer multiple choices for the client to consider. However, closedended questions seldom elicit in-depth information. If overused, this type of questioning can lead
clients to feel like they are being interrogated. It can also turn into a rapid-fire approach where
the questions and their responses occur too rapidly for the counselor to properly absorb the
information.
In contrast, an open-ended question is worded so it does not structure the client's response.
Examples of open-ended questions:
What seems to be the problem?
What are your concerns about garnishment?
Such questions provide the client with a great deal of freedom to respond in any manner. As a
result, you will often learn a great deal by allowing clients to answer questions in their own way.
However, open-ended questions are not particularly time efficient.
A hypothetical question is used to set up a theoretical or role-simulation situation for the client to
consider when responding. Examples of hypothetical questions:
If you were in my position, what would you do?
What do you think would happen if you were laid off?
Some clients find hypothetical questions motivating, challenging, and insightful. Used skillfully,
these questions can elicit certain information or evoke client attitudes that are not easily reached
through questioning techniques.
At the same time, hypothetical questions can be time consuming. They may also be stressful to
the client. A client may feel threatened by such questions if they are introduced too early in the
interview, or if it they present a hypothetical situation to which the client cannot readily relate.
Leading questions (also known as loaded questions) are worded in such a way as to imply the
expected answer, which tends to bias the client's response. Examples of leading questions:
You certainly aren't thinking of skipping the court appearance, are you?
You didn't believe what he told you, did you?
Leading questions can be used as a device to elicit a reaction from the client when other
questioning techniques do not seem to be effective. They can also be used to encourage the client
to volunteer information that goes beyond the questions asked. However, such questions
generally influence or distort the responses, positively or negatively. Also, leading questions that
are emotionally charged can create a stressful interview environment, produce invalid responses,
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or provoke client anxieties.

Secondary Questions
Once you have used primary questions to uncover key information, you may need to follow up
by asking secondary questions to find out more. Types of secondary questions are:
1. Clarification probes
2. Mirror or reflection questioning
3. Internal summary questions
4. Hypothetical probes
Clarification probes are questions used to clarify an abstract or incomplete response to a primary
question. Examples of clarification probes:
"How do you think the home equity loan you just mentioned can help you?"
"Can you give me an example of how your family has tried to reduce
expenditures in the past?"
With a clarification probe, you are trying to find out more about the client's thoughts and feelings
concerning the topic being discussed. However, starting one of these questions with "Why . . . "
can cause a client to feel defensive. So can a judgmental attitude, conveyed by your tone of voice
or facial expression. Therefore, be tactful and sensitive when phrasing clarification probes.
With mirror or reflection questioning, the counselor repeats back to the client a word or phrase
used in response to a previous question that needs further explanation. An example of mirror or
reflection questioning:
Counselor: Will you be able to make your house payment?
Client:
I should have enough to pay the house payment.
Counselor: You will have enough money on payday to make the house payment.
Although it can be quite effective, you should use mirror questioning sparingly. You don't want
to sound like you're merely parroting the client's answers over and over.
Internal summary questions contain a short summary of what the client has stated up to a certain
point in time, as a way of eliciting additional information. An example of an internal summary
question:
Counselor:
Client:
Counselor:
Client:
Have you called the medical billing company to request a payment

plan?
Yes but I havent been able to afford the amount that they want me
to pay.
The amount they wanted you to pay was more than you could
afford?
Thats right. They wanted $100 every two weeks.
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In addition to encouraging the client to elaborate, internal summary questions allow you to check
whether you have correctly understood the client's answers.
Hypothetical probes, which set up theoretical situations for clients to consider, can be helpful
when clients have difficulty relating to your primary questions. Example of a hypothetical probe:
Counselor:
Do you ever purchase items at the grocery store that you dont
really need?
Client:
Yes, I probably do. My children often go along and request
expensive junk food.
Counselor: What if you found a neighbor or friend to watch your children
while you shopped so you could more easily stick to your weekly
food budget?
Hypothetical probes invite the client to assume a different role or imagine a different situation
and then respond. However, if overused, such probes can make clients feel uncomfortable or
uncertain. Use this technique sparingly, because it can sound too clinical or phony if overused.
Imperative Statements
During a counseling session, you can draw clients out through the use of imperative statements,
simple sentences designed to elicit more information, clarify meaning, and encourage client
participation and reaction. Examples of imperative statements:
Client:
"I can't seem to manage my money."
Counselor: "Tell me more. . . or Please expand on that. . . or Give me more
detail. . . or Please elaborate on that. . . or Go on. . ."
Imperative statements demonstrate your interest in what the client is saying while indicating that
you need more information. When you use an imperative statement, match your tone of voice to
the situation, sounding firm but not dictatorial.
Pacing as a Response Technique

You can lay the foundation for a good working relationship with your clients by responding with
verbal, nonverbal, and written pacing. Pacing is a method of periodically adjusting the
counselor's behavior to that of the client. Pacing techniques can be used to convey warmth and
acceptance and create the atmosphere of trust that is necessary for counseling to succeed. Three
specific verbal pacing techniques are:
1. Restating
2. Paraphrasing
3. Summarizing
Restating is repeating what the client says but with emphasis on specifics of content. This is a
mirroring strategy that focuses attention on a particular thought or feeling and encourages the
client to further analyze or explain what he or she has said. Examples of restating:
16
Client:
"We make good money but have nothing left at the end of the
month."
Counselor: It sounds like you dont feel like youve got enough money to get
you through the month.
Client:
"These creditors are really upsetting me!"
Counselor: "They really upset you?"
A second way in which counselors can verbally pace is through paraphrasing. Unlike restating,
where you use the same words as the client, paraphrasing takes the essential content and puts it
into different words. When you paraphrase, be careful not to add or subtract words that may
communicate a different meaning. Examples of paraphrasing:
Client:
Counselor:
Client:
Counselor:
"The many bills I receive in the mail every day are driving me crazy
and my husband will not help and would not come with me today."
"You seem to be struggling with bill paying and it's creating family
pressures."
"Insurance is so expensive. Look how much we are spending on
family life insurance."
"You feel you should reevaluate your need for life insurance now."
Both restating and paraphrasing allow you to clarify a client's messages. Neither adds new
information, but both show understanding and lead to more thorough and meaningful discussion.
This can help build a mutual trust between counselor and client.
Summarizing serves the same general purpose as restating and paraphrasing, but it is especially
useful when a client has talked for an extended period explaining his or her situation. At this
point, there is a need to condense the client's statements and ideas. Summarizing also helps bring
a segment of the conversation to a close in order to provide more time for discussion or to end
the session. Also, summarizing can be helpful for the client in reviewing what needs to be done
at the next session or some later session. Examples of summarizing:
Counselor:
Counselor:
"So far, we have defined a number of financial problems. Now we can

explore some alternatives to solve these problems."
"We have discussed your financial difficulties and considered several
possible solutions. Let's review those solutions and discuss your
decisions."
Four Steps to Communicating with Clients

1.
2.
3.
4.
Detecting client's feelings and attitudes

Overcoming resistance
Helping clients focus
Offering feedback
During a counseling interview, clients may attempt to put their situations in a positive light.
They may say only what they think you want to hear, or omit information which they think might
cause you to refuse services. They will offer excuses as to why they have not been financially
17
solvent or financially reliable in the past. They may be defensive and rationalize, particularly in
the early stages of the first interview. Some may attempt to cover up their real feelings, including
anxiety, concern and worry.
Keep in mind that clients may not appear to be completely honest, but what they are telling you
may be true from their perspective. The counselor needs to accept that clients will have anxiety
about talking about their financial problems and be careful not to appear judgmental. This will
allow clients to open up as they become more comfortable.
1. Detecting Client's Feelings And Attitudes
During an in-person counseling interview, how can you get a sense of what a client is feeling?
Nonverbal cues often signal a client's inner state. The client who sits erect and looks comfortable
is probably relaxed. When someone leans slightly forward, it indicates attention is being paid and
there is interest and involvement in the counseling session. The client who slouches or seems to
be drawing away from the counselor may be indicating disinterest, lack of trust, or boredom.
Frequent changes of position may indicate discomfort, lack of interest, or possibly unexpressed
anger.
Facial expressions are also indicators. The client whose face appears frozen in one expression
may be exhibiting fear, anxiety or anger. If the client glares or stares constantly at the counselor,
this could indicate anger or hostility. Eyes roving all around the room may indicate disinterest.
Eyes downcast and rarely meeting the gaze of the counselor may indicate shyness, shame,
anxiety, or fear. Some clients may cry during their session and the counselor can reassure the
client that financial problems are upsetting to everyone. Direct eye contact with the counselor
usually indicates that the client has a positive and concerned attitude toward solving the financial
problem.
As you know, voice patterns, tone, volume, and pitch of voice also reveal feelings. These voice
cues are especially important during telephone counseling since other nonverbal cues are not
available. The client whose tone is very loud or shouting may be indicating anger or hostility,
while the client whose tone of voice is soft may be shy or fearful. Stress may raise the pitch of
the voice and a high-pitched voice may indicate anxiety, fear, or anger. A low-pitched voice
suggests either comfort or strong control of emotions. If the pitch of a client's voice begins to rise
or starts to quiver or break, it may be that the client is about to cry.
2. Overcoming Resistance
Regardless of what approaches and techniques you use, the attitude of the client may prevent you
from having a productive counseling session. If a client is exhibiting severe resistance, you can
try these techniques:
Permit the client to vent his or her feelings before continuing with the
counseling session.
Use active listening skills to detect what is below the surface so you can
respond appropriately.
Redirect the discussion to a less threatening area and plan to return to the more
emotional topic at another time. Knowing when to back off is important if you want to
18
build a good relationship with your clients. Politely confront the client by calling
attention to the fact that he or she might be avoiding or resisting certain areas of
discussion.
3. Helping Clients Focus
You can help clients focus on key topics under discussion and take responsibility for themselves
during the counseling interview by modeling appropriate communication techniques. During the
course of counseling, a client may be dealing with one or more of eight common emotional
themes:
1) Clients may feel unique or different because of their financial problems.
2) Clients may generalize their anxieties about financial issues into a pervasive
anxiety about everything in their lives.
3) Clients may be depressed about their financial concerns.
4) Clients may experience general confusion about their ability to solve financial
problems.
5) Clients may have unrealistic financial goals or an unrealistic view of the
world.
6) Clients may feel inadequate to solve their financial problems.
7) Clients may be frustrated with themselves and/or others related to their
financial situation.
8) Clients may believe that change is beyond their control.
With focusing, clients learn to deal with their own issues and the underlying emotional themes.
One way to encourage this is to ask clients to use the first person singular and plural ("I" and
"we") rather than referring to an unspecified third person plural ("they") or talking vaguely about
"people" in general.
Also, urge clients to use present tense verbs rather than past tense verbs when referring to
continuing behavior. This encourages a focus on what the client is doing now and reinforces the
idea that the client can take control of a situation. You will also want to point out inconsistencies,
ambivalence, and distortions in client communication and behavior as a way of increasing
responsibility and movement toward problem resolution.
Through focusing, you can help clients concentrate on the underlying issues, understand that
they are able to resolve their financial problems, and prepare to take steps and make decisions
that lead to economic security.
4. Offering Feedback
In the course of counseling interviews, you will have the opportunity to provide feedback that
helps clients examine their behavior and measure progress toward achieving their goals. Positive
feedback lets clients know that their behavior is consistent with their goals. This kind of
feedback gives them encouragement to continue moving in the same direction and, once goals
have been achieved, to set and work toward new goals.
Negative feedback is used to alert people that their behavior is not consistent with their goals.
This helps clients consider the limits of behavior related to achieving their goals and see how far
19
they have to go to accomplish what they want. The purpose is to provide constructive
information that will allow clients to see how to refine their behavior in order to move closer to
their goals.
In offering feedback, be careful to discuss the client's behavior rather than the person. By
referring to what people do, you avoid sounding judgmental or critical. Keep your personal
values, feelings, needs, and wants separate from those of your clients. Clients will resent you if
you appear to be judgmental, condescending, or controlling.
The most effective approach is to concentrate on what is important to your clients and look for
ways to express your willingness to help clients achieve their goals. In addition, make your
feedback specific, confining yourself to comments about current behavior and actions under
consideration. Although people can't change what they have done in the past, they can change
what they do in the future, once you bring the consequences to their attention.
Facilitating Client Communication During a Session

In some counseling sessions, you will face the challenge of helping a husband and wife
communicate with each other about family financial problems. Each may have a different view
of the problem, different priorities, and different solutions. In this situation, often the only way to
get agreement is to let each person have a say while instilling some objectivity. Note that you, as
a counselor, serve only as a facilitator and not as a decision maker. You smooth the way toward
better communication so that clients can see their problems more clearly, have a meaningful
discussion about potential solutions and then work out compromises about how to proceedwithout placing blame.
20
CHAPTER 3
THE COUNSELING RELATIONSHIP
The Building Blocks of Counseling
As you start counseling a new client, you will need to jointly work on six specific elements that
are the building blocks of a productive counseling relationship. These are:
1. Openness
2. Realistic expectations
3. Structure
4. Enabling/Empowerment
5. Confirmation of differences
6. Mutual involvement
Openness describes a willingness to offer information, including facts and relevant personal
thoughts and feelings. Openness applies to you as well as your client. You can set the tone for
the relationship by modeling openness. You can put clients at ease by mentioning that you have
experience working with other clients who faced similar problems. You can also offer
suggestions about options to be considered.
Realistic expectations are important from the very start. Clients may not understand what they
can realistically expect from the counseling relationship. Take some time during the first session
to help clients recognize that you will offer ideas and guidance but you cannot take control of
their financial situation or make decisions for them. You can also help clients gauge the reality
of the specific goals they set during counseling.
Structure comes from establishing the proper setting and goals for the relationship. This allows
you and your clients to work together to help the clients solve their problems, achieve their
personal goals and become more economically secure. Exploring means uncovering client issues
and concerns, thinking about goals and investigating the cause and dimensions of client
problems.
Understanding involves generating alternatives, evaluating these choices, and coming to a
decision about which option to choose.
Acting is the final stage of the counseling relationship, in which the client follows through on the
chosen alternative and implements plans to resolve issues and achieve goals.
Evaluation helps you and the client determine whether the actions taken are effective or whether
there is a need to return to an earlier stage for further exploring or understanding.
Enabling or empowering is the ability to influence clients through your communication style,
specialized knowledge and expertise, and understanding of the counseling process. Your goal is
not to control clients but to assist them throughout the counseling process in a positive way as
they generate and consider alternatives, think through the consequences of each possible action,
21
and work toward achieving their goals.

Confirmation of differences acknowledges your clients can have views, values, and goals that
are not the same but are still equally valid. Throughout the counseling relationship, you need to
keep your personal values, beliefs, and attitudes separate from that of your clients.
Mutual involvement fosters cooperation between you and your client to make the counseling
relationship productive and satisfying. You can't be responsible for making decisions for your
clients. You are available for ideas and support, but your clients should not become overly
dependent on you. What you can do is to urge your clients to cooperate by becoming actively
involved in setting goals, making plans to meet them, and implementing those plans.
Establishing Rapport and Trust

The first few minutes of any counseling session are important for setting the tone for a
productive relationship with clients. This is when you start to establish rapport, encourage trust,
and generally put the client at ease. In this way, you help the client feel more comfortable in
disclosing all the financial details and decisions that are relevant to the current situation.
Without mutual trust, respect and involvement, the counseling relationship is unlikely to result in
an effective resolution to the client's problems.
Making Referrals
During a counseling relationship, you may be dealing with a wide variety of client issues and
concerns. You and your organization will be able to handle many of these, including issues
related to credit delinquency, concerns about home equity or consolidation loans, repossessions,
imminent foreclosure or mortgage default, and methods of reestablishing credit.
At times, however, a client or family may require additional help with one or more specific
issues, such as:
abuse
housing concerns
legal services
health concerns
problems with consumer products
mental health issues
family conflicts
divorce
gambling
addictions
When you are thinking about referring clients to other agencies or groups, be sure you
understand the services that these other organizations provide. Use the appendix provided in the
back of this book to help get you started as you seek out local referrals for assisting clients.
Because financial difficulties are often part of a complex set of family and life circumstances,
having clients get assistance in other need areas of their lives is often critical to the clients
ability to successfully tackle their financial issues.
22
Many communities may also be served by telephone referral centers that clients can easily access
by calling 211 on their telephone.
Whenever you make a referral, you become part of a network of specialists working with a client
family. In such a situation, you will want to separate roles and clarify the division of
responsibility.
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CHAPTER 4
DIAGNOSING PROBLEMS AND UNDERSTANDING
CLIENT VALUES
Diagnosing Financial Problems
As you know from your work with clients, financial management can be a problem for all kinds
of people in all life stages. Having financial problems can worsen marital or family discord, as
well. However, what appears to be an obvious problem is often merely a symptom. The real
reasons for financial trouble may not be readily apparent without a diagnosis based on careful
collection of data and an understanding of client behavior, values, and attitudes.
Debts (and other concerns) are frequently symptoms of financial problems. In your counseling
sessions, you will be helping clients distinguish between symptoms and problems so they can
plan for changes that will resolve the problems.
Causes of Financial Problems
The following are basic causes of financial problems that reflect a need for the client to plan and
change attitudes or behavior:
1. The conflict between expanding desires and limited income. Even families with rising
incomes may have expectations and expenditures that rise faster still. Expanding desires are
prompted by many things, including peer pressures, advertising, boredom, and increased
availability of income. To combat this problem, families can set spending priorities and then
budget accordingly.
2. The conflict between the present and the future, between needs and wants, between security
and comfort, and between achievement and risk. All families have to come to terms with a
healthy balance among these conflicting elements. An imbalance can threaten the family's ability
to manage its finances successfully today, tomorrow, and in the long term.
3. The emotional meaning of money. Clients may not be aware of the emotions underlying their
use of money. These include using money to buy friendship or to express love, impulsive
spending, using money to control others, making up for past deprivation, gaining prestige, and so
on. These hidden meanings of the use of money may involve a power struggle over control of
family resources.
4. Lack of control over or expertise in money management. Clients may not be able to control
the family's finances for a variety of reasons: inadequate math skills, lack of knowledge about
consumer rights, lack of experience with or knowledge about financial accounts, lack of access
to or control over a second checkbook or other credit cards in the family, or inability to recognize
the danger signs of credit overextension.
5. Inadequate income or savings to meet family needs, especially unexpected expenditures. A
family may be able to live on a certain level of income for some time, then have problems when
24
that income is reduced or eliminated due to cutbacks, unemployment, or business failure. The
addition of children to the family can increase expenditures, just as can other life changes. The
wage earners may lose their self-respect or the respect of relatives if they feel they cannot
provide a certain lifestyle for the family.
6. Personal values, attitudes, and behavior. How a client feels and acts can directly affect his or
her employment possibilities, ability to meet goals through appropriate budgeting, need to avoid
risk and gain better economic security, and handling of money matters. Values and attitudes
about money, lifestyles, family roles, etc. can influence a client's financial decisions and actions.
7. Lack of communication. When family members can't or won't communicate about money,
this is usually a symptom of more basic problems in the relationships. Of course, some clients
may not have good communication skills, which can affect their ability to cooperate with other
family members in preparing and implementing financial plans. Probing for more information
will help you determine whether a basic communication problem is the cause of financial
troubles and allow you to think about appropriate referrals if needed.
8. Overestimation of income and underestimation of expenses. Some people do not want to
know how much they actually make or spend, while others may not know because of poor
record-keeping. The reason behind the client's behavior should be identified so the client can
take steps to regain control over financial matters.
As you listen to a client's presenting or stated problem and start to formulate questions and
statements that will elicit further information, be alert for the underlying cause(s). Remember
that clients may be unwilling at first to discuss sensitive issues, so you may have to concentrate
on building trust to encourage disclosure of such information.
The Diagnostic Process
The presenting or stated problem is only the starting point for identifying the real cause of a
client's problem. The first step in the diagnosis process is to gather as much data as you can
about the client's financial situation and the symptoms of the problem. Next, you will have to
identify the underlying problems at the root of the client's trouble.
Having a client admit responsibility for a problem is not as important as having a client assume
responsibility for solving it. Therefore, if the subject of blame arises, you may want to remind
clients that uncovering the real reason for a problem is important, but blaming someone for
causing that problem will not help solve it. This reminder may also reassure a client who feels
guilty for causing a problem and has been unable to get past the guilt to make needed changes.
It can be helpful to restate the problem(s) until you and the family members come to consensus
on what needs to be resolved. Then, once the nature and extent of the problems have been
clarified, you need to help the client rank the problems to determine which should be tackled
first.
Some less-severe or less-urgent problems may have to wait while the client resolves more
pressing problems. Problems that entail priority debts such as mortgages must be handled as
25
quickly as possible because of the potential for disrupting the family's security.
Understanding Client Values

The choices people make and the actions they take are influenced by their values. As a result,
understanding your clients' values can help you diagnose their problems and contribute to
shaping suitable plans for resolving those problems.
Each person has his or her own value system, and each finds it a useful way of approaching the
world. Values can change over time, as the individual is influenced by interaction with the
environment. Since values affect both attitudes and actions, you need to have a clear idea of a
client's values before you can help diagnose problems and generate alternative solutions.
Understanding expectations, money management, and the analysis of priorities and lifestyle are
some of the techniques you can use to clarify your understanding of a client's values and see how
these values relate to the client's financial problems, goals, and potential solutions. In the process
of this clarification, your clients will come to a better understanding of their own values and the
influence on their behavior.
Understanding Expectations
Ask what the client expects to gain from counseling.
Ask what skills the client has and what the salary a client expects from a
potential employer.
Ask, "Where do you want to be in 5 years? In 10 years? In 25 years?"
Ask what the client primarily wants to do or have.
Money Management
Ask, "If you had a million dollars, what would you do with it?" Examine the
client's checkbook register and/or tax return to see how money was used.
Ask what could be cut out of the family budget and what would happen if some
items were not purchased.
Analysis of Priorities
Ask, "Which expenditures do you consider necessities and which do you
consider luxuries?"
Ask, "Which expenditures do you feel must be made now and which do you
feel can wait?"
Ask family members to work separately in ranking the expenditures in the
family budget and then compare their answers.
Lifestyle
Discuss the client's plans for the weekend.
Ask, "If your workplace (or school) were closed for a day, what would you do?"
Ask if the client would take a job that means more income but less time for
leisure or the family.
Ask if the client would take a job with higher status or higher income than that
of another family member.
26
Money is a powerful tool. It is a medium for acquiring status, recognition, and control, plus
many of the essentials and luxuries of life. Money also has many symbolic meanings as a way of
expressing love, anger, jealousy, power, success, attachment, and so on.
Lack of money, of course, has many negative meanings and effects, including those that can be
life-threatening. Therefore, counseling is bound to be affected by a myriad of economic, social,
and psychological family concerns which, to one degree or another, will influence all aspects of
the counseling process and outcomes.
During the counseling interview, you will be able to get a sense of what money really means to
each client. In all your interviews, therefore, it is important to look below the surface at each
client's underlying attitudes toward money; relate these attitudes toward client values, needs, and
goals. Then help clients prepare to change inappropriate attitudes so they can achieve their
financial goals.
Cultural Values
Communication with your clients also carries with it the responsibility for the counselor to be
aware of cultural differences that the client may bring to the counseling session.
As you counsel individuals with diverse cultural backgrounds, you need to be aware of how
cultural diversity may affect understanding of attitudes toward money. This may include
understanding trust and mistrust of the following:
Financial institutions.
Insurance.
Federal and state assistance programs.
Saving.
Using cash rather than credit.
Credit and its use.
Borrowing and lending.
Legal issues in dealing with finances.
Purchasing alternatives for major items like autos and homes.
According to an article in Managing Diversity September 1995 these are eight tips that can
help you improve communication with clients who represent a different culture or who speak
English as a second language.
Slow down. If youre from New Orleans and have worked in Boston or vice versa, you may
already know how difficult it is to understand what someone is saying. With these differences
just in the United States, imagine that it can be twice as difficult for a different ethnic group. As
you speak, check in with the client from time to time to see if he/she understands what you are
saying. Watch for facial cues and body language that indicate understanding, recognition, or
utter perplexity.
27
Use basic vocabulary. Most experts agree that todays average US reading comprehension is at
the fourth grade level. So, this is a tip that applies to everyone: always use words in their most
common meaning. Choose words with the smallest range of meanings wherever possible.
Say what you have to say in several ways. Repetition is the mother of learning. By
giving your message in a variety of words and images, you will help a listener or reader
understand. However, be careful not to overwhelm the receiver with too many versions. Ask the
client if he/she understands your meaning.
Avoid slang. If you ask the question, Where are you coming from? the answers you
receive may include the name of a persons home town or his or her last travel destination rather
than the reasons why he just said what he said. Are you into movies? may get a quizzical look
rather than an answer. Think about how you phrase a question before you ask it. Also, avoid
unfamiliar word pictures. (Blow your mind is a good example.)
Be careful with humor. Humor and jokes, while a staple or our communications, frequently
depend on intricate nuance of language. What is funny to someone born and raised in this
country may not be at all comical to a member of another culture.
Expect delayed reactions. When people are listening in a second language (or you are speaking
in one somewhat imperfectly), expect delayed reactions. It simply may take longer for your
listener to process what you said. Be patient for audience reactions and questions.
Dont assume their experiences are your experiences. Talking about your experiences,
feelings, and reactions can be an effective way to win over a listener in a conversation.
However, talk about these experiences as your own and as a member of your own cultural group.
Then, ask if their experience is different and how so. Listen to and accept their perceptions,
values and feelings even if they are not the same as yours. For example, in some cultures, the
banking establishment may be less trusted. Your acceptance and gained understanding of this
during your time with the client will help you allow the client to find options with which they
personally are comfortable.
Use the opportunity to learn about another culture. Clients may be more
respectful to you if they see that you are truly interested in them.
28
CHAPTER 5
CRISIS INTERVENTION AND THE NEED FOR CHANGE
The Sequence of a Crisis
Many of the clients who may come to you may be in some state of crisis. A crisis may be
precipitated by a catastrophic illness; sudden change in employment status; sudden change in
marital status due to divorce or a spouse's death; or another major, unexpected change in the
client's life that threatens to disrupt financial stability. Most people go through stages in the
process of recognizing a crisis and preparing to diffuse it.
Being aware of the normal sequence of crisis events can give you a better understanding of the
emotional state of the client, a sense of the impact of what may have already taken place, and an
appreciation for what may be expected in the future.
A crisis is a situation requiring:
Change and/or reevaluation of priorities, or
Change in assumptions about self and how to operate in the particular system, or
Outside help to manage the problem or to prevent a detrimental effect on self
and/or property.
A crisis can become an opportunity for growth and positive change rather than a disaster. The
Chinese characters for the word "crisis" are composed of two parts -- danger and opportunity.
With your help, clients can come to see that they will be stronger and more capable after they
have resolved their crises successfully.
The following illustrates the seven phases many clients move through in a financial crisis. As
you read about each phase, think about examples from your counseling experience and consider
what your clients were thinking, feeling, and doing in that phase.
1. Precipitating event. This is the unexpected occurrence that threatens the client's financial
stability.
2. Recognition of precipitating event as threatening. In this stage, the client realizes that the
family's finances may be endangered as a result of the event. The situation becomes more urgent.
3. Emotional reaction. Once the client realizes the danger, he or she may react emotionally,
expressing shock, disbelief, or some other outcry. Not every client expresses an emotional
reaction, however.
4. System maintenance. After the emotional reaction comes a response that helps the client
soften the impact by denying the danger, displacing attention to avoid dealing with the crisis,
projecting the problem or the cause elsewhere, delaying response, or simply feeling numb to
avoid feeling anything.
29
5. Disorganization. A client may feel disoriented as he or she begins to absorb the fact of the
crisis and the urgency of the threat. In this stage, clients commonly experience signals of distress
such as chemical abuse, over-eating, over-spending, and anxiety; they may have a lower
attention span and be unable to think clearly or make clear decisions because of confusion or
bewilderment at being overwhelmed by the crisis.
6. Acceptance. As the disorganized stage peaks and clients come to accept the crisis and the
urgent problems they face, they are ready to make changes so they can diffuse the threat. In this
stage, clients begin to move toward stability by setting priorities, choosing among alternative
solutions to solve their problems and learning from the crisis so they can better manage their
personal finances.
7. Resolution and stability. In the final stage of a crisis, the client has resolved the threatening
problems and regained stability. Now the client can move ahead to maintain the solution as long
as needed and gain strength and confidence to deal with future crises.
Counseling Intervention to Diffuse a Crisis

In a counseling interview, once you recognize the need for crisis intervention, you can start by
specifically stating and defining the crisis. Facts are important, so work calmly to obtain
information and highlight important details that reveal the problem and the urgent threat. Be
accepting without being judgmental. Offer emotional and educational support. Through this
process, the client gains comfort that helps to alleviate the immediate stress and emotional pain.
During the counseling session, help clients see how they can redirect energies to generating
alternatives that will solve the problems. Encourage goal-directed and constructive actions to
give a sense of self-control. Also help the client think ahead to anticipate the future course of a
crisis. You can assist by identifying the resources that are available to be applied, including
personal and family as well as community and government resources. Once the client is ready to
move forward, you can encourage the development of an action plan and a schedule.
Be aware that the client's motivation to solve the problems and/or his or her unwillingness to
accept solutions can impede the process. For instance, the client may have to choose between the
lesser of two evils -- a foreclosure or bankruptcy. Many times there are no "good" alternatives,
but a choice must be made nonetheless. In some cases, clients may need to be made more
uncomfortable with the situation to motivate them to act. You then become the source of
discomfort by pointing out the directions the problem will take and the consequences of not
making a decision at all, so bear in mind that this may color the clients' reactions to you and to
your ideas.
Special Counseling Circumstances -- Suicidal Threats from Clients

At times it is possible that a counselor will have a meeting with a client who feels so
overwhelmed by his/her situation that suicide seems to be a very real alternative in dealing with
the present frustration. While such a client does not present very often, a very hopeless client
can state a feeling that suicide is an alternative. It is important that counselors have a basic plan
to help the client find alternatives.
30
The first clue to a clients suicidal ideation comes from the client. The client may express
hopelessness, frustration, a feeling of intense isolation and loneliness. Or the client may make a
comment, which expresses a feeling that they cant go on or would be better off dead. When
a counselor hears such comments, he/she should be immediately inquisitive about the clients
state of mind regarding suicide.
It is generally wise for the counselor to immediately address any client comment about suicidal
thoughts. This can be done directly by simply asking the client how serious he/she is about
suicide as an alternative. In most cases, the client will respond with statements indicating that,
even though he/she occasionally thinks of killing him/herself, he/she would never actually do it.
At this point the counselor can return to the subject at hand but to keep monitoring client
statements regarding hopeless feelings.
In a few cases, however, the client may state that he/she is seriously considering suicide. If this
is the case, the counselor should ask questions concerning the intention to do so. If the client
reports serious intent, every attempt should be made to have the client call a mental health
professional. The client should be given a 24-hour help-line number available in most areas or
the client can be encouraged to call 911.
If the client is currently under the care of a mental health therapist, he/she should be encouraged
to call the therapist. If the client approves, the counselor could connect the client with the help
number or therapists office or emergency number during the counseling session.
In evaluating the risk of suicide, there are four components to be considered. These are:
Ideation, Means, Intent, Plan.
If the counselor hears vague references, which seem to indicate the presence of suicidal ideation
(thoughts), the client should be asked directly about each component. The presence of all four
components (ideation, means, intent, and plan) generally means that there could be a danger of
suicide and client statements should be taken seriously and addressed during the counseling
session. There is a lower risk of suicide when only the ideation is present, but there is not plan,
means or intent.
In summary, some clients can be very distressed. Financial problems are difficult to share with
friends or relatives. This can make a person feel quite isolated and alone. Some clients have
other mental health and life issues contributing to the thoughts of suicide. If a client states
suicidal thoughts, the counselor needs to be prepared to offer an appropriate response to get the
client to a skilled therapist or mental health provider.
Dealing with Barriers to Change

Almost everybody resists change, because change means giving up familiar patterns and having
to learn new ways of doing things, which can be uncomfortable. Even when the consequences of
not changing are extremely serious, clients may resist change. However, the need for change can
be positioned as an opportunity to learn new skills, gain new experiences and insights, move
closer to attaining goals and become more skilled in problem solving.
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In a counseling situation, your role is to be supportive of your clients as they confront change.
Help them clarify their own values, goals, and priorities as they consider their alternatives and
prepare for changes that will lead to economic security.
Stated barriers to change, which are mentioned by clients during the counseling interview, may
reflect rational thinking, whereas unstated barriers often reflect emotional responses, mistaken
thinking and beliefs, or anxiety about the change. As you read through the following seven
hypothetical situations, think about how the counselor's sample response relates to both the
stated and unstated barriers to change. Notice that the common thread is to reassure the client
that the crisis can be resolved. The responses also offer the client hope for an improved
economic future, which provides motivation for making real changes now.
1. Easing Of Crisis As A Barrier To Real Change
Client tells counselor: "I really want to change.
Unstated barrier in client's thoughts: "I have just bought more time. Now that the creditors are off
my back, I can continue to do whatever I want."
Sample counselor response: "You may be off the hook this month and maybe next month, too,
but unless you make changes, your outstanding debts will catch up with you. Remember that
your credit report will reflect your failure to repay credit obligations for seven years. Or, if a
worse emergency arises or wonderful opportunities come along, you will not be able to handle
them. As the counselor, you are the expert in knowing what the potential consequences to the
clients choices and in your role as counselor, it is important to discuss the potential longer term
consequences to the clients actions.
2. Past Deprivation As Barrier To Real Change
Client tells counselor: "I have worked so hard or have been so victimized that I deserve
something for me.
Unstated barrier in client's thoughts: "I must make up for past deprivation, working so hard, and
sacrificing for other people for such a long time."
Sample counselor response: "I know that you do deserve rewards and that you have worked hard.
I also think that you deserve to be in control of your own affairs, to be master of your own
finances rather than be controlled by indebtedness or other problem. You have achieved success
in so many areas of your life. Your finances are yet another area for you to master. You have
succeeded so much that you seem to have no fear of failure; you think that you will not be hurt
by your finances. However, do not set yourself up for failure. You can manage your financial
matters if you try."
3. Need For Personal Control As Barrier To Real Change
Client tells counselor: "I think I should do such and such." Or client is silent when discussion
turns to generating alternatives.
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Unstated barrier in client's thoughts: "I can do whatever I want to do. No one is going to tell me
what to do."
Sample counselor response: "You can do whatever you want to do. You have the right to make
your own choices. As a counselor, I have the responsibility to show you the consequences of
your choices. I would not be doing my job if I did not warn you of the possible consequences of
various choices. It takes more effort and concern for me to explain consequences than to just let
you make choices without being informed."
4. Lack Of Control As Barrier To Real Change
Client tells counselor: "I need a budget. Will you give me a workable budget?"
Unstated barrier in client's thoughts: "I cannot control my finances. I spend more than my
income," or "I am in trouble with my creditors," or "I am scared because of overwhelming
costs," or "I cannot say no to my children."
Sample counselor response: "Up until now, how have you handled your finances? Where do you
feel that your spending is out of line? Out of line with what? Who is spending ..., how much ...,
for what ... or whom? Let's write down your expenses, analyze them, and then set up a financial
plan or budget with a format and system for control, geared to your need and personality so it
will work better for you."
5. Immediate Needs As A Barrier To Real Change
Client tells counselor: "I cannot save now. I have too many expenses. I am just trying to survive
now."
Unstated barrier in client's thoughts: "Why should I save for the future when it is so uncertain
and I am so anxious about meeting my family's needs today? We need the money now."
Sample counselor response: "Drastic changes in lifestyle now are necessary for life security
throughout your later years. You will feel more secure if you save now so you can take
advantage of an opportunity or diffuse an emergency later. Statistics show that everyone will
have a crisis at one time or another, of one type or another -- and these crises can be resolved by
having a financial reserve. Financial independence comes from planning, saving, and sacrificing
now so that you have choices later. Otherwise, you will soon have fewer -- or no -- choices."
6. Hopelessness As A Barrier To Real Change
Client tells counselor: "I do not think this plan will work . . ."
Unstated barrier in client's thoughts: "Why try? Nothing ever works out right anyway." Or: "I
really do not want to take the effort to change myself, someone else, or anything else."
Sample counselor response: "Maybe the plan will not work -- that is true. The plan will certainly
not work if you do not try. But the possible outcome from taking the risk of improvement offers
more opportunity than the increasingly negative consequences of doing nothing."
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7. Family As Barrier To Real Change

Client tells counselor: "Planning a budget is really a good idea. I like it, but my spouse and/or
kids will never go along with the plan."
Unstated barrier in client's thoughts: "Why risk a battle with my family to make a budget and
stick to it? They don't want to change, so trying to budget is a waste of time. Also, I cannot say
no to my children. I am afraid they will not like me or will leave me if I do not give in. I do not
want them to think poorly of me."
Sample counselor response: "You can take a leadership role in your family. Have a meeting.
Explain your idea and the need for a budget with definite amounts for a specified period of time.
Allow your family to react as you listen without making judgments or interrupting. Elicit
cooperation by asking each person how he or she can contribute to the family income and to
resolving the problem. You can present this as a challenge to their creativity. Ask for their ideas
until the family is able to come to agreement and decide to implement one or more appropriate
ideas. Communication about money can be learned and practiced. Expect resistance to change,
but be persistent. Do not say, 'We cannot afford this or that', but rather say 'If we choose this, we
cannot have that.'"
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CHAPTER 6
LIFE EVENTS, FAMILY STRUCTURE, AND
FINANCIAL MANAGEMENT
Life Events
As a counselor, you will work with people whose life situations vary widely. Key life events
such as getting married, having children, preparing for higher education for oneself or children,
establishing a career, becoming divorced, remarrying, and preparing for retirement can have a
profound effect on a person's financial concerns, goals and use of resources.
Regardless of the structure and composition of the client familytraditional or nontraditional
couple with or without children, single adult, single parent--you will start the counseling process
by understanding the client's individual situation and the influence of life events on that client's
economic attitudes, behavior and consumption patterns.
Once you have determined the life events and financial challenges that shape a client's situation,
you can help the client think through his or her short- and long-term goals, learn about effective
money management skills, weigh alternative solutions to pressing problems, and plan for future
economic security.
Each client is unique, and not every individual will experience every life event. For example,
some people may never marry, yet they will inevitably face retirement issues. Some clients need
help financing college or graduate school for themselves or their children, or will be coping with
outstanding debts from higher education.
Divorce can also change the course of an individual's life. Single parents may be concerned
about child support issues; remarried clients may have to manage income to cover expenses for
the new family, as well as for a spouse or children from a previous marriage. Regardless of
marital status or family structure, a client may require counseling for employment problems and
for help in planning for financial security after retirement.
Many life events affect family structure, in turn influencing the way a client manages household
finances. As you come to know more about a client's life situation, you will be better able to
determine the appropriate approach to take in resolving that client's financial issues.
The next sections offer an overview of challenges related to life events and family structure,
including specific financial challenges and opportunities that a client may face. Some life
events will require many of the following skills as a client adjusts to the changing conditions of
his or her life and finances. Depending on the clients individual situation and family structure, a
client may need to:
Establish financial independence and self-reliance;
Develop smart shopping skills to buy and maintain household goods;
Balance a checkbook;
Handle credit;
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Establish a good credit history;

Sign contracts to rent an apartment;
Apply for a mortgage;
Obtain insurance: life, health, auto, real and personal property, disability, and/or longterm health care;
Save money to prepare for future independence and retirement;
Adjust from being single to being part of an economic partnership;
Make financial decisions about work, income, and family rearing;
Deal with divorce, death, and/or changing health needs;
Manage financial resources in good and difficult times;
Manage childcare expenses;
Maintain an adequate emergency fund or build a fund for childrens education or job
training; and/or
Plan for retirement and estate needs.
In addition to assisting clients as they deal with financial change that is a normal part of life,
certain life periods may require special attention to financial matters. For example, seniors may
face chronic health care issues that add to their expenses. To supplement income, seniors can
explore resources such as:
Reverse mortgages;
Deferred loan plans;
Federal home equity conversion plans;
State home equity conversion plans;
Homeowner equity accounts; and/or
Renting out part of the housing.
Counseling Clients at All Income Levels

As a counselor, you will meet with clients at varying levels of income. Families at all income
levels can face financial difficulties. These problems can stem from:
Lack of knowledge about the mechanics of financial management;
Disagreements over family finances;
Employment problems;
Excessive use of credit; and/or
Lack of control over spending.
Regardless of income level, lifestyle is a major influence on the way everyone approaches
money matters.
Income and lifestyle affect how clients behave and what they need from counseling. The specific
challenges and priorities of lower income families frequently differ from those faced by middle
or higher income families. It is important to understand how a client's socioeconomic
background is linked to income and to lifestyle. With this understanding, you can adjust your
counseling techniques and inquiries to the specific needs of your clients.
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The way your client perceives and manages financial matters may be quite different from the
way you handle your own finances. You should avoid being judgmental and applying stereotypes
when working with any client. Each client is different and, although a client's values and
priorities may not match your own, you should respect the client's viewpoint and understand
what is and is not appropriate, given that client's situation.
Credit and financial counseling is based on the belief that people can:
Develop a sense of control;
Accept responsibility;
Believe that behavioral changes are necessary.
It is important to set the tone for a counseling relationship that is empathic, accepting, respectful,
sincere, and honest. Remember, however, that change comes slowly. After you have established
a climate of trust and support, you can introduce a variety of ideas and tools for clients to use in
resolving the immediate problems and getting on track toward reaching identified goals.
One of your most important functions is to demonstrate to clients that they have options. A client
can control his or her attitude toward financial matters. Any client can learn to adjust his or her
lifestyle, think creatively about increasing family income, and develop a realistic budget for the
entire family. You can help your client recognize that every action taken toward controlling
expenses, repaying outstanding debts, or increasing income is a step toward future economic
security.
Higher Income Families
Higher income families can experience severe financial problems. They may:
Misunderstand complex financial instruments;
Have lost income;
Make ill-advised investment decisions;
Have secured or unsecured debt;
Have not considered negative consequences of changes in tax laws.
However, higher income clients often have assets they can liquidate or borrow against to make
some or all of the most urgent payments. In addition, these clients may carry insurance that
cushions against problems such as medical disability.
You may find some higher income clients somewhat overwhelmed by and ashamed of money
worries. They may be concerned about how financial problems will affect their status in the
community. Many have become accustomed to a certain lifestyle and a competitive corporate
environment. Having less money to spend in keeping up appearances can be a particularly severe
emotional blow. Therefore, the higher income client will want your reassurance that his or her
case is being handled confidentially.
Higher income clients may also be especially susceptible to pressure from collectors. They are
likely to do whatever is needed to relieve the feeling of humiliation at being unable to meet their
obligations. They want to get over these feelings quickly, so you'll find that many enter
counseling seeking fast solutions.
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Middle Income Families

Middle-income clients come to counseling for a variety of reasons, such as:
Lost income;
Unexpected bills;
Major expenditures;
Tax consequences; and/or
Overspending or the over-use of credit.
Even when there are two wage earners in the household, middle-income families may
overestimate the amount that will actually be contributed to the family budget. This can occur
because the family fails to consider the increased expenses relating to two jobs (such as
additional transportation costs, higher taxes, and child care expenses). The family may fail to
consider how withholding will affect each paycheck and how the dual incomes will affect their
combined tax situation.
Middle-income families may also face the family and time pressures that result in failure to
balance monthly income and expenses and, in some cases, heavy reliance on credit cards to
handle emergencies. The counseling process will help such families identify and achieve family
money goals.
Lower Income Families
Families may have low income for a variety of reasons, including:
Irregular or seasonal employment;
Loss of employment;
Employment at low paying jobs;
Reduced or no benefits; and/or
Tightened eligibility requirements for assistance programs.
How is the category of lower income families defined? The poverty index only considers a
family's cash income and does not take into account non-cash benefits such as food stamps,
public housing, or Medicaid. The index is adjusted annually based on inflation and is used as a
guideline to determine eligibility for some federal assistance programs.
Transitional poverty describes middle-income people who are temporarily in the lower income
category and expect to move back to the middle-income level in the future. Some people move in
and out of the lower income level according to the number of dependents they are supporting. As
a result, middle-income couples who have one or more children may become lower income
families while the children live at home. Later, when the children are financially independent,
spending is reduced and the empty-nest couple is once again in the middle-income category.
Lower income families often deal with these problems:
Their cash reserves are low or nonexistent.
They live from paycheck to paycheck, with no savings.
They lack insurance so aren't reimbursed for losses due to fire or another
calamity.
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They may not be able to find a low-cost bank account, so may handle their
finances by using payroll check-cashing services, payday loans, pawnshops
and/or rent-to-own shops, and/or by buying money orders when payments must be
mailed.
Government Programs for Clients with Income Problems

One of your priorities as a counselor working with clients who have income problems is to find
community resources to diffuse immediate financial crises and provide assistance for ongoing
needs. You may also want to help clients find out about earned income credit and other taxrelated benefits that are applicable to their situation.
Social Security and SSI are federal programs that make monthly payments to survivors, retired,
elderly, blind, and/or disabled people who have limited income and resources.
Some people who are eligible for these programs do not participate in them because of:
Pride;
Lack of information;
Fear of filling out application forms; and/or
The erroneous belief that they are not qualified.
With your counseling, clients can overcome such concerns and take steps to utilize community
resources and other available programs
Many government programs available to assist your clients have been changed under the
Personal Responsibility and Work Opportunity Reconciliation Act of 1996; the act covers
Medicaid, Supplemental Security Income (SSI), food stamps, child welfare, and child support.
The welfare-related provisions of this law set a 60-month lifetime limit on receipt of federally
funded assistance under the Temporary Assistance to Needy Families (TANF) law.
This law also changes the assistance available for legal immigrants, allows Medicaid
entitlements for children and parents who meet specific income and asset standards, and restricts
the types of disabilities that enable children to qualify for SSI benefits.
Under the TANF law, unemployed individuals between the ages of 18 and 50 who have no
minor children will generally be able to receive food stamps for only three months in any 36month period. However, the three-month limit doesn't apply until after states have officially
notified recipients of this provision, and states can request waivers under certain circumstances,
such as high unemployment (over 10 percent) in a given area. The new law also allows states to
make substantial changes to their food stamp benefits.
Childcare programs, which are of particular concern to working parents, have been changed
under the TANF legislation. States cannot penalize families with children under six if the parent
is unable to work or join a training program because of lack of affordable childcare. However,
states may still impose a time limit on that parent's access to aid.
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You will want to review each client's eligibility for individual programs, be sure that clients
understand applicable rules and time limits for receiving benefits, and continue searching for
alternatives to help clients as they resolve their financial difficulties.
Employment Issues
Job loss is another major life event that many clients may be experiencing when they seek
counseling. Few people today will find themselves working at just one job or for one employer
throughout their working lives. Most clients will probably change jobs, voluntarily or
involuntarily, at some point, which can affect their management of family finances.
Some of the reasons for involuntarily changing jobs include:
Being laid off due to downsizing programs;
Being fired;
Being part of a restructuring due to changes in required job skills.
If a client is unemployed involuntarily, suggest that he or she apply for unemployment
compensation even if he or she is not sure they qualify. Some clients may qualify for
unemployment compensation because they were fired due to discrimination or for another
reason. Also, a client may want to check with a legal services office or with a union office if he
or she was fired without appropriate cause.
A client who has been unemployed for some time may have to rethink employment goals and
start over in a new job or a new industry, sometimes at a level that is below the previous level.
The prospect of starting over can be troubling to many people.
As a counselor, it is important to acknowledge the difficulties the client faces. Urge the client to
remain positive and focused on goals, even if the new job is not the ideal job. Over time, he or
she will gain the confidence and skills needed to succeed in the new job and perhaps become
eligible for other, better-paying jobs that require these new skills, this moving closer to achieving
his or her long-term work goals.
One way a client can ease financial pressure due to unemployment or underemployment is to
consider whether another family member might take on additional employment. One of the
parents or another member of the household may want to start to work or find an additional parttime job. Before taking this step, the client should decide how much more money is needed to
meet expenses and the additional number of work hours per week needed to earn that amount.
Urge the client to consider additional costs such as child-care that come about as a result of
employment, and find ways to minimize them. Also, a client should examine transportation
alternatives and the schedules of family members, and think about how to redistribute household
chores so housework is more evenly spread among family members.
In preparing to look for a new job, your client should start by conducting a self-analysis of skills
and goals, thinking through what he or she wants from his or her working life. The client needs
to identify jobs and employers, investigating jobs and job openings in a systematic way.
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He or she should seek help from state and private employment agencies, temporary employment
agencies, technical colleges and other community resources to prepare for new employment.
Many resources will provide testing and practice interviews to provide additional assistance to
the client.
A client may need to rethink goals and priorities. What would he or she like to be doing in a
year, in three years, and in five years? How might the family situation change, and what impact
could the changes have on employment goals? What are his or her short-term and long-term
goals and priorities? What impact would these goals and priorities have on the client's current job
search and future employment plans?
Next, a client should begin to systematically explore job possibilities and prospective employers.
Remind the client that, during this period, finding a job is the job. He or she needs to take some
steps every day toward finding out which industries, jobs, and employers make sense for his or
her particular skills and goals.
A client should recognize that only a small percentage of job openings are advertised in
newspapers or listed with employment services. Nearly three-quarters of all jobs are filled
through personal contacts. Therefore, the client should fan out and talk to everyone he or she
knows--relatives, friends, schoolmates, customers and suppliers, doctors and dentists, religious
leaders, club members--about the job search. One of these people may hear of an appropriate job
or know someone at a local company that has just started hiring. By making personal contacts
and following up on leads, your client increases the odds of identifying suitable jobs and getting
invited to interviews.
Non-Traditional Households
Along with life events, family structure is another important aspect of each clients financial
picture. Key life events and family structure affect the way people live, work, spend money, and
plan for the future. Many clients seeking counseling are living in non-traditional households.
Some examples of non-traditional households include:
Single parent families;
Blended families;
Widow and widower households;
Couples living together; and/or
Gay and lesbian couples.
The problems that face non-traditional households may affect the way you approach the
counseling process.
Single Parent Families
Counseling single parent families provides its own set of challenges. Areas of concern may
include:
Work and child care expenses;
Transportation;
Dealing with the emotional issues;
Time demands to balance family and job;
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Issues related to dealing with the other parent;

Visitations; and/or
Child support.
Blended Families
Blended families include family members from two different households now sharing a common
living environment. The two families may have different attitudes and values relating to money
and non-money issues. If one family moves into the other familys dwelling, there may be
feelings of conflict as to space and ownership. Emotional issues may arise and you might
suggest family counseling to resolve them.
Your responsibility as a counselor is to help the family deal with money issues and attitudes. A
parent may feel that the money he or she earns should be spent on his or her children rather
than their children. You may also observe conflict in spending patterns, values, priorities, etc.
You should try to get the family members to agree on what is important to them.
Widow and Widower Households
Losing a major wage earner in a household is devastating and the surviving individual may have
to make some major changes that affect the family. If the surviving spouse has been involved in
the financial decisions of the household, the transition with be easier. If not, you will need to
educate the survivor on the basics of running a household.
Some of the things to consider in this situation might include:
Checking to see if the family is eligible of benefits under Social Security.
Checking financial institutions for savings, deposit accounts, etc.
Checking safety deposit boxes or safes for life insurance.
Checking credit card statements for disability and death benefits.
Checking with employers about life insurance benefits and retirement accounts.
Checking with employers regarding ongoing health insurance options.
Checking with insurance agents.
Contacting an attorney for assistance.
As a counselor, you will see clients whose life events have led them to make sometimesexpensive decisions to resolve current problems. Part of your job as a counselor is to help clients
analyze the true cost of past decisions in a non-judgmental fashion so that as they move forward,
they can build on their personal knowledge to resolve current problems and make the best
possible choices in the future.
Counseling the Transition from Marriage to Divorce

People who decide to separate or divorce have many new adjustments to make in order to move
forward financially. Each has to rely on his or her own income, which means adjusting to a
different income level. Property may be divided and living costs will increase as the spouses
prepare for living in separate households.
With separation, divorce, and/or remarriage, the focus is on adjusting to the changes brought
about by the new family structure. Stress and financial pressures are common problems for
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people who are separated, divorced, or remarried, especially when children are involved.
Resolving the financial issues stemming from these major life events can be complex.
Divorce can have a definite effect on the financial well being of husbands, wives, and children.
As a counselor, you are in a unique position to help clients think about the decisions they make
in handling family resources during the transition from marriage to divorce and after a divorce is
final.
By injecting sound resource management principles into the process, you can help clients avoid
poor decisions and actions that can threaten future economic security. Helping clients learn about
goal setting, considering alternatives and consequences, analyzing costs and benefits, budgeting,
and controlling family finances will benefit them during and after the divorce. It is also important
that clients consider the legal and tax aspects of divorce.
Complicating the transition from marriage to divorce are issues related to the clients emotional
state attitudes toward money, self-concept and job situation. Your emotional support and
objectivity can be helpful to clients who must consider their alternatives and the consequences.
Financial Concerns About Divorce

Strong emotions surface before, during, and after divorce. These emotions affect the client's
cooperation with the spouse (and the counselor) and his or her ability to take action or make
appropriate financial decisions.
Planning for divorce requires help because an economic and emotional partnership is being
dissolved. You can help clients undertake a cost/benefit analysis of the impending divorce and
understand the lifestyle adjustments that will have to be made. The standard of living generally
changes after divorce. Some studies show that the living standard falls for women and children,
while divorced men are better off financially.
You will want to encourage clients to look beyond current income and expenditures. Unforeseen
circumstances and progression through life stages can dramatically change both income and
expenditures. Some people have difficulty in projecting future changes in expenditures,
especially costs related to child rearing.
When considering divorce, a client should prepare a list of assets and gifts acquired before and
during marriage and indicate which spouse owns each. Titles on property may need to be
transferred so that the property does not have to be liquidated for equitable distribution. In
addition, each spouse's non-monetary contributions should be documented, and special
contributions--such as work that enhanced the value of the house--should be noted. Savings (in
separate accounts) may be needed for the period of transition.
Job skills and secure employment may also need to be assessed before divorce. Joint credit
accounts should be closed or legal responsibility transferred to one spouse. Be sure that the
spouse's name is legally removed from credit contracts and credit cards for which that spouse is
not responsible.
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Once the decision to divorce has been made, you will want to help your client plan rather than
panic. During a divorce, people may make irrational decisions due to an impulse to express hurt
or frustration with the other spouse or because of an urgent desire to accomplish the move
quickly, without considering the impact on the future. Since some people in this time of crisis
lose confidence, ability to function, and self-control, your involvement can help your client make
better decisions and regain a positive self-image.
A client may need your help identifying decisions to be made, ranking them in priority or
chronological order, finding information needed for each decision, and investigating available
resources. Although many people in the divorce process tend to be focused on what has
happened in the past and present, you need to help the client think through decisions that will
affect the future.
The decision to divorce dissolves the economic partnership. In preparation for this, you can work
with your client on the following issues: Income, Credit, Child Support and Alimony, Assets,
Insurance, and Housing.
Income: Income considerations begin with a definition of what is income (current and
projected), and who has contributed to income.
Credit: Divorcing couples need to be informed as to proper handling of credit obligations.
Debts: A divorce decree does not eliminate debt obligations that were established during a
marriage.
Child Support and Alimony: The arrangement of child support and alimony payments should be
discussed with an attorney, since many spouses fail to receive these payments as planned. An
annuity trust is an alternative to alimony. If possible, the child support or alimony agreement
should call for a check, recording, and enforcing system. In many cases, child support (and
alimony) may be paid through the court, and wages can be garnisheed. If payments are in
arrears, arrangements can be made to deduct these from assets liquidated at a later time, such as
after the sale of the home.
A number of other remedies may be available as more states strengthen their laws in this regard.
Remind your client that the division of responsibility for debts is only enforceable by the divorce
decree and between the couple. If payments are not made when due, creditors will try to collect
from the person or people who signed the contract. In many states, marital law may effect the
collection activity and divorce agreements. You should check state laws to see if they are
applicable.
Assets: Assets and property are considered in combination with income for equitable divorce
settlements. If a premarital agreement is in place, this can guide the division of assets and
property. If not, general guidelines are that assets and property acquired prior to marriage or after
decree of separation need not be shared with the spouse. Equity and reasonableness should be
used in dividing assets and property acquired during marriage through joint effort. Usually the
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couple can do a better job of dividing household items than the court.
Insurance: Spouses should arrange for "stop-gap" insurance, insurance on the ex-spouse, and
continuation of health insurance benefits. One ex-spouse can own the life insurance policy on the
other to protect child support payments and other projected expenses.
Housing: The couple should have the family house appraised for its actual fair market value, and
should compare the currently monthly mortgage payment and interest rate to the interest rate and
monthly payment to be made on an alternative home or rental. They should also examine current
real estate market conditions and what might happen to the value of the house if it is sold at a
later date. This is important because some custodial parents remain in the family home while the
children are minors. In addition, urge divorcing clients to think about the tax benefits inherent in
their mortgage payment when arranging their finances prior to divorce. Generally, some portion
of the monthly mortgage payment is returned as a tax benefit.
Financial Considerations During Divorce

Counselors cannot provide legal advice but can be ready to provide referrals to local community
legal referrals. When working with a client who is involved in a divorce, be sure to emphasize
that the lawyer hired by one spouse serves as that person's legal advocate and the executor of
legal documents that protect that individual's legal rights. Couples therefore should not share the
same attorney, even when this arrangement would appear to save money, because such an
arrangement prevents the attorney from taking an advocacy role on the part of either spouse.
Encourage your client to do research and interview before choosing a lawyer, including
investigating fee structures for handling a divorce. He or she should be sure to understand what
services are provided for that fee, what expenses will be billed, how fees and expenses will be
billed, when and how payment is to be made. Also, for tax purposes, the client should ask that
attorney bill separately for fees related to the divorce rather than mix divorce fees with fees owed
for investment and tax advice or other services.
Another form of legal divorce help is called mediation. Mediation is a process in which two
parties voluntarily work through a conflict with the help of a neutral third party, who helps them
negotiate and satisfactorily resolve disputed issues. Mediation empowers both spouses in a
divorce situation to learn to communicate more effectively and to take responsibility for
resolving disputed issues on their own. It also encourages a higher degree of cooperation so that
the final resolution allows spouses to maximize their gains and minimize their losses while
protecting their children.
The Aftermath of Divorce

Divorce can leave economic as well as emotional scars. After a divorce, one or both spouses may
be very angry and may tend to use any weapon available to hurt the other, including money. If
one spouse refuses to cooperate in paying child support or alimony, the other may be forced to
find work (at any level) to cover basic expenditures. Resentment can build in such a situation,
interfering with the spouses' ability to communicate when necessary about family issues.
45
If a client is not receiving support or alimony payments as scheduled, you may want to help him
or her investigate the possibility of having support payments made through the support registry
of the courts. This insures that payments are made regularly and provides legal documentation
when they are not. Your agency may have additional information about methods that other
clients have successfully used to collect support.
In adjusting to divorce, your client may have to find new resources, be flexible and modify goals
or develop new goals to deal with the reality of the situation. He or she can seek support from
your agency as well as from other community or social resources, informal support groups,
friendships, and relatives. This is a time when a client can set a new life course and regain
financial control. Managing resources can move your client toward economic security in the
future.
In general, federal law requires that states establish and maintain a child-support program to
assist residents. Most states have adopted a set of rules to assist the courts in determining child
support payments, including medical support obligations. In addition, many states have
procedures for withholding income to collect court-ordered child support. Check your state's
laws for details.
Federal law also provides for collection of past due child support payments by intercepting
federal income tax refunds. Since only Attorney General Child Support Enforcement cases are
eligible, custodial parents must apply for an IRS intercept through the nearest Attorney General's
office. There may be a fee involved and the process can be time-consuming, but this may be a
workable option for a client who hasnt been receiving child support payments as agreed.
Consult your local Attorney General's office for more information.
Gambling Addictions
Many clients or family members of clients are affected by gambling additions. Recognizing the
signs of a gambling problem and referring a client to appropriate resources are important
counselor skills when helping a client address problem gambling.
The following information comes from Gamblers Anonymous (www.gam-anon.org).
Gamblers Anonymous offers the following questions to anyone who may have a gambling
problem. These questions are provided to help the individual decide if he or she is a compulsive
gambler and wants to stop gambling.
Twenty Questions
1.
2.
3.
4.
5.
Did you ever lose time from work or school due to gambling?
Has gambling ever made your home life unhappy?
Did gambling affect your reputation?
Have you ever felt remorse after gambling?
Did you ever gamble to get money with which to pay debts or otherwise solve financial
difficulties?
6. Did gambling cause a decrease in your ambition or efficiency?
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7. After losing did you feel you must return as soon as possible and win back your losses?
8. After a win did you have a strong urge to return and win more?
9. Did you often gamble until your last dollar was gone?
10. Did you ever borrow to finance your gambling?
11. Have you ever sold anything to finance gambling?
12. Were you reluctant to use "gambling money" for normal expenditures?
13. Did gambling make you careless of the welfare of yourself or your family?
14. Did you ever gamble longer than you had planned?
15. Have you ever gambled to escape worry or trouble?
16. Have you ever committed, or considered committing, an illegal act to finance gambling?
17. Did gambling cause you to have difficulty in sleeping?
18. Do arguments, disappointments or frustrations create within you an urge to gamble?
19. Did you ever have an urge to celebrate any good fortune by a few hours of gambling?
20. Have you ever considered self destruction or suicide as a result of your gambling?
Most compulsive gamblers will answer yes to at least seven of these questions.
Because gambling is a recognized addiction, referral of the client for outside assistance is usually
a proper course of action, though some organizations may employ on-site help for clients with
gambling issues. Some clients have been successful in using the Debt Management Program to
repay debts in conjunction with individual and group therapy for gambling.
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CHAPTER 7
COUNSELING EFFECTIVENESS
Analyzing Counseling Effectiveness
Just as clients need to analyze the results of their decisions and actions and prepare to make
changes where needed to get back on track or to improve. Counselors also need to analyze the
results of their work with clients. There are two broad areas to consider, process and outcome,
when conducting this analysis.
The Process Perspective
From a process perspective, this analysis helps you focus on the steps you took in the course of
helping clients make plans to solve problems and achieve goals. In this analysis, you look at the
effectiveness of what you and your organization did to help clients overcome their difficulties.
The Outcome Perspective
From an outcome perspective, you can look at whether the planned change has occurred in the
client's life. The outcomes of a completely effective counseling encounter would show that
actions chosen by the client and reinforced by the counselor achieved the goals set, that needs
had been satisfied and problems solved.
Characteristics of an Effective Counselor

As you think about outcomes, you can develop criteria for analyzing the effectiveness of
counseling from your clients perspective. You can use criteria such as: making steady progress
toward financial goals; finding or maintaining steady employment, education or retraining; and
increased ability to meet payment obligations.
Other criteria for evaluating outcomes from the client's perspective include: assessing changes in
communication patterns among client families, increased cooperation among family members,
and the expressed financial satisfactions and dissatisfactions of family members.
What makes an effective counselor? Effectiveness in any specific counseling situation depends
on what is needed to resolve the issues of each individual client. In general, however, the
counseling literature suggests that an effective counselor should be compassionate,
nonjudgmental, and a good listener so he or she can focus on what clients are saying and then
help clients clarify and achieve their own goals.
Working with clients requires good communication skills and patience as well as the ability to
think creatively, juggle multiple priorities, and work well under pressure to solve pressing client
problems. Above all, counselors need to maintain a positive attitude, which inspires client
confidence and offers hope that the counseling process will lead to improved economic security
in the future.
Outstanding counselors go even further by following these criteria. Think about how you fit
against these criteria as you plan your professional development needs.
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Leadership in counseling, and professional development:

Counselor demonstrates professional and ethical behavior and has made unique
contributions to the agency's counseling program.
Counselor uses innovative approaches to counseling, including the ability to
motivate clients, design budgets, analyze problems and objectively evaluate
options.
Counselor is dedicated to continuing professional and personal development by
participating in training or educational opportunities.
Community involvement:
Counselor acts as an advocate of the agency and helps increase the visibility of
the agency within the community.
Professional development:
All counselors need professional development to maintain their certification, to support their
agency's goals, and to improve their own skills. As part of professional development, you will
want to think about your personal and career goals and see how you can achieve personal growth
within the framework of your agency responsibilities.
As you plan your professional development, you will want to keep current with issues
surrounding consumer credit, household finances, overall economic trends, legislative and
regulatory changes, and other concerns and trends that can affect your clients and your
counseling. You can also join professional organizations that offer opportunities for growth.
Time management and work organization:
The productive use of time, coupled with good organizational skills, can help you conduct your
daily work activities more professionally. Effective time management is a matter of making
appropriate choices and using good judgment. Using time to its best advantage is very satisfying,
because you feel you are accomplishing what you need to do. On the other hand, poor use of
time leads to continual frustration, periods of frantic or useless activity, and procrastination.
In addition to planning how to best use your time, you will need to make decisions about
organizing your work flow. There is no right or wrong way to do things. Your plan must allow
you to get the job done with the best use of your time. Organization is not an end in itself; it is a
method of helping you prepare for functioning effectively day in and day out. One of the highest
priorities in time management should be to meet your clients' needs.
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APPENDIX
Community Resources, Agencies, and Organizations
for Referring Clients
Children and Youth
Alanon and Alateen
Big Brothers and Sisters
Boys Clubs
Child welfare services
Childrens' homes
Community centers
Day care centers
Service clubs
Family Service Agency
Girl Scouts, Boy Scouts
Head Start
Public school social workers
United Way
YWCA, YMCA
Clothing
American Red Cross
Clothing certificates (local stores)
Community centers
Discount stores
Garage sales
Goodwill Industries
Local churches
Salvation Army
Thrift clothes shops and used clothes stores
Consumer Problems and Complaints
Better Business Bureaus
Chamber of Commerce
Consumer Service Division (state or local government)
Federal Trade Commission
Legal Aid Service
Newspapers
Small claims courts
State attorney general's office
Trade associations
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Personal Counseling Services

Advocates for the poor
Churches
Crisis centers
Family Service Agency
Marriage and family therapy centers
Mental health associations
Mental health centers
Public school counseling
University guidance clinics
University marriage and family departments
University psychological services
Adult education programs (public school systems)
Career Development (Manpower)
Centers for retarded citizens
Consumer Information Center, Pueblo, CO 81009
Continuing education (university)
County and State Cooperative Extension Service
Financial aid (university)
IRS office
Social Security Administrative office
Tuition assistance (industries, businesses, private foundations, U.S. military services)
Vocational or technical colleges
Vocational rehabilitation
Energy and Utilities
Area Council on Aging
Fuel assistance programs
Energy assistance programs
Local "weatherization" program
Employment
Church and community job counseling centers
Employee assistance programs (offered by employer)
Employment services or agencies
State/Local Employment Offices
State Employment Security Division
Vocational Rehabilitation
Financial Assistance
American Legion Auxiliary
City Housing Authority
City Neighborhood Housing
City Urban Ministry
Community Development Department
Community Foundation (of local city/region)
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County Council on Aging

County Department of Public Welfare
Easter Seal Society
Employee assistance program (offered by employer)
Family Services Agencies
Financial aid departments of higher education institutions
Lions Club
Loan companies
Local churches, emergency funds
Project Self-Sufficiency
Salvation Army
Social Security Administration
Supplemental Security Income
Township Trustees
Unemployment compensation offices
Human Services Departments
Women-Infants-Children Programs (WIC)
Food
American Legion
American Red Cross
Community and Family Resource Center
County Department of Public Welfare
County Extension Office nutrition education
Food Bank or Food Finders
Food pantries
Food stamp program
Head Start
Local churches
Meals-on-Wheels
Salvation Army
Special Supplemental Program
Township trustees
Women-Infants-Children (WIC)
Housing
American Red Cross
Board of Health
City Housing Authority
Community Outreach
Farmers Home Administration
Group homes
Habitat for Humanity
HUD housing counseling centers
Local Human Service Departments
Salvation Army
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Section 8 of the federal government housing program

Senior Citizen Centers
Utility companies
Veterans Administration
Legal
Area Councils or Agencies on Aging
Bar Association (local)
Board of Health
Civil Liberties Union
Court of Reconciliation
Divorce mediation center
Human Relations Council (discrimination complaints -state)
Legal Aid Corporation or Legal Aid Society
Legal Services Organization
Minority organizations
Medical
American Cancer Society
American Diabetes Associations
Blind Assistance (sight impairments)
Boys Clubs
Community centers
Comprehensive Health Services
County or city health department
Department of Public Welfare
Fraternal orders
Health referral services
Homemaker-Home health services
Hospital social services departments
Lifeline services and Life Care Services
Lions Club (glasses)
Medicaid (medical care and drugs for totally and permanently disabled)
Medicare (65 yrs. or disabled)
Planned Parenthood (STDs, pelvic exam, and birth control)
University dental schools (low cost dentures and dental work)
University hearing clinics
Veterans Administration
Visiting nurses
Mental Health
Alcoholics Anonymous, Alanon, Alateen and similar programs
Gamblers Anonymous
Halfway houses
Hospital social services department
Mental health centers
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Taxes
Certified public accountants
Internal Revenue Service (Federal or state)
Volunteer and professional tax consultants
Transportation
Advocates for the Poor
Ambulance service (local or hospital)
American Red Cross
Salvation Army
Township trustees (may need an advocate)
Volunteers-in-transportation
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NFCC Member Code of Ethics

These principles of organizational professional conduct were established to guide members of
the National Foundation for Credit Counseling in their relationships with customers, clients,
creditors and community.
Our members reflect these values and qualities in their internal operations
including the treatment of those who work with and for them.
Members carry out their responsibilities as professionals, exercise sensitive professional and
moral judgments in all their activities, and avoid any actions that put personal interests
ahead of public benefit.
Members serve the public interest, honor the public trust, and demonstrate commitment to
professionalism.
Members accept the obligation to know and obey the laws that govern tax-exempt status as a
public benefit organization. They accept that as tax-exempt organizations, they exemplify
openness, diversity, tolerance, fairness, and honesty.
Members perform all professional responsibilities with the highest sense of integrity to
maintain and broaden public confidence. Members maintain objectivity and are free of
conflicts of interest in discharging professional responsibilities.
Members observe the professions technical and ethical standards and strive continually to
improve competence and the quality of services.
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Member Quality Standard # 01.00
Accreditation
Member agencies shall obtain and maintain NFCC-approved accreditation.
OFFICIAL COMMENT:
Membership in the NFCC is predicated upon total quality service. Accreditation standards for
Financial Management and Debt Counseling Service encompass the values and best practices of
the NFCC. Currently, the NFCC recognizes the Council on Accreditation for Children and
Family Services, Inc. (COA) as its accrediting body.
Potential members must have submitted the applicable application fee to COA before they can be
approved for membership in the NFCC.
New member agencies must submit their COA self-study within nine months of their
membership approval date and be fully accredited within 18 months of their approval date. Such
agencies shall thereafter be reaccredited within the time frame established by the accrediting
body.
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Access and Availability
Member agencies shall provide services within a reasonable amount of time and at
times convenient to the public. Member agencies will not discriminate in providing
service for any of the following reasons: age, race, color, creed, national origin or
ancestry, physical or mental disability, medical condition, gender, sexual
orientation, religion, employment, marital status, financial status or any other
consideration made unlawful by federal, state or local law.
OFFICIAL COMMENT:
NFCC member agencies will not discourage counseling for any reason.
Pre-screening for Debt Management Plans (DMP)* is expressly prohibited. Member agencies
should refrain from waiting to schedule a counseling session until the potential client completes
and returns a written application or questionnaire; such action will be considered a form of prescreening. Member agencies must have operating procedures in place to assure timely service,
recognizing that various times of the year create increased consumer demands.
* A Debt Management Plan is defined as an agreement between the client and

a member agency to assist the client in repaying all unsecured outstanding
debt. DMP agreement forms must include the clients expectations and
responsibilities, an enumeration of the debts, a proposed payment for each
creditor, the total debt owed, and a statement of the clients right to cancel the
agreement.
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Group Financial Literacy
Member agencies shall develop, foster, or provide consumer group financial
literacy programs on money management, budgeting and the responsible use of
credit.
OFFICIAL COMMENT:
Membership in the NFCC requires adherence to the mission of the NFCC. We are an
educational organization providing high caliber, professional, confidential counseling and
education services.
Public relations and marketing activities do not qualify as education events. One-on-one
counseling sessions provide valuable education, but do not qualify in this standard as a group
educational event.
Group financial literacy programs are designed to comply with 501 (c)(3) service requirements.
58

Counseling Sessions
Member agencies must provide comprehensive, one-on-one money management
counseling and provide a written assessment and action plan to the client as
applicable to the service provided, or as required by law.
OFFICIAL COMMENT:
Comprehensive money management counseling is defined as an interview or series of interviews
which includes but is not limited to, discussion of financial goals, sources of income, expenses,
consumer debt (secured and unsecured), housing costs, utilities, garnishments, tax debt, credit
reports, referrals to other sources, settlements of debts, etc. when it is applicable to reach goals.
Quality counseling is based on thoroughness. Our goal is to educate and give guidance to those
who seek our help. A thorough review of the client's financial situation must be an integral part
of the service regardless of whether a debt management plan is feasible or necessary.
A written assessment and action plan is defined as a document outlining the clients individual
situation and offering appropriate solutions. It will include:
a complete budget assessment with a review of income, expenses, debt, housing issues, etc.;
identification of problems and need for appropriate referral or services;
an assessment of the client's and familys strengths and resources for addressing their
problems and reaching their goals; and
options and action steps for the individual or family.
Clients shall be provided with adequate information through the written assessment and action
plan to assist them after they leave the counseling session. This is our opportunity to assist in
their personal financial plan with educational handouts, referrals and prioritized action steps.
Clients under stress cannot be expected to remember the counselor's advice in all cases. Both
counselor and client can refer back to the written assessment.
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Counselors
Individuals providing counseling must be certified by an NFCC-approved
certification program or have their work reviewed and approved by a certified
consumer credit counselor.
Member agencies are prohibited from paying financial incentives to counselors
based on the number of DMPs established or assessing financial penalties to
counselors if their client leaves a DMP program.
OFFICIAL COMMENT:
Member agencies shall employ qualified individuals who must obtain certification within oneyear from the date of their employment as a counselor and maintain NFCC certification as
outlined in the counselor certification process.
Member agencies must conduct a state or county criminal background check on all counselors
prior to their start of duties.
Member agencies must establish additional training and development programs for counselors to
improve knowledge of agency policy and procedures, interpersonal skills, and abilities that
enhance counselor sensitivity to the needs and preferences of clients.
Member agencies must register, with the approved certifying entity, all new counselors within
120 days of date of employment or promotion.
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Debt Management Plans
Member agencies shall establish debt management plans only when appropriate
and predicated upon client needs and preferences to assist in achieving their
financial goals and objectives.
OFFICIAL COMMENT:
NFCC membership is an assurance of quality to both client and creditor. Member agencies shall
ensure:
that the amount available for the repayment of the clients indebtedness represents the
clients best effort after a thorough evaluation of income, expenses, assets and debts;
that proposed debt management plans will reflect that the consumers indebtedness can
be repaid in 60 months or less, including interest. A plan may be established for longer
than 60 months, with documented extenuating circumstances. Debts with contractual
repayment periods of over 60 months, such as automobiles, mortgages, and other secured
debt, may be included in the plan, but can be excluded from the monthly payout
calculation;
that in any proposed plan, negative amortization shall be avoided and that all known
debts are accounted for in the written action plan;
that neither the agency nor the client exclude selected creditors from the program unless
the counselor and client determine that inclusion of the creditor on the plan will be
detrimental to the client, for example the creditor automatically increases the interest rate
to the maximum allowed by law. All creditor exclusions must be approved by member
agency management;
that a method of prorating accounts shall be employed that treats like creditors alike,
assuring that no creditor receives preferential treatment in return for financial support;
that the disposition of credit cards is recorded;
that the DMP reflects that the client will close all lines of credit and refrain from
obtaining future credit without the member agencys approval;
that client confidentiality and the creditors rights to information are recognized. All
counseling provided by member agencies is strictly confidential. Client confidentiality as
it relates to debt management plans refers to family, friends, employers, etc. A creditor
participating in a debt management plan has the right to pertinent information (full
61
disclosure) such as: addresses, phone numbers (unless the phone number is unlisted),
assets, income, expenses, other creditors involved in plan, balances owed, reason for
plan, etc. Nonparticipating creditor should not be given any information without the
clients approval. When a clients debt management plan has been closed, information
may also be verified and/or released to only those original creditors listed on the original
plan. Any creditor found to be using the information provided to harass an existing
depositing client should be reported to the agencys management/creditor relations
division and may be denied information in the future. The NFCCs Monitoring and
Compliance Committee should be notified of any such actions taken with creditors;
that the agency provides, at a minimum, a quarterly status report to active DMP clients
that fully discloses their deposit and disbursement history and approximate balances;
that the agency establishes and adheres to a process of reviewing existing debt
management plans annually, preferably including the client; and
that the agency does not create any plans for the benefit of an individual client which
jeopardizes the plans of existing or future clients.
Member agencies will avoid conflicts of interest by not paying agents, counselors, or employees
commissions or referral fees for DMP accounts.
Member agencies will avoid conflicts of interest by not paying creditors for client referrals or
agreeing to receive reduced fair share to receive referrals.
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Model Member Agency Funding Disclosure
Member agencies must provide in writing to all clients counseled the following
disclosure and explanation:
Most of our funding comes from voluntary contribution from creditors who
participate in Debt Management Plans (DMP). Since creditors have a financial
interest in getting paid, most are willing to make a contribution to help fund our
agency. These contributions are usually calculated as a percentage of payments you
make through your DMP up to fifteen percent (15%) of each payment received.
However, your accounts with your creditors will always be credited with one hundred
percent (100%) of the amount you pay through us and we will work with all of your
creditors regardless of whether they contribute to our agency.
OFFICIAL COMMENT:
If an NFCC member agency does not request a full fifteen percent (15%) fair share contribution
from any creditor, then that agency may replace the fifteen percent (15%) in the above disclosure
with the highest percentage that it does request from any creditor. In addition, if an agency does
not receive a majority of its funding from DMP contributions, the lead in phrase most of can
be replaced by some of, as long as this statement is accurate and not misleading to prospective
clients. In those cases where an agency uses the phrase some of, the agency must submit to
NFCC an authorized certification of its Board that the disclosure used is accurate and correct.
The above model member agency funding disclosure must be included in all promotional
materials involving DMPs that an NFCC member provides to consumers, including any
agreements for service that are filled out and/or signed by consumers. This phrase should also be
used in response to inquiries about how NFCCs members are funded.
Agencies must submit their disclosure form to the NFCC annually or when the disclosure form is
changed.
63

Model Member Agency Dual Role Disclosure
Member agencies must disclose the dual role that DMPs serve. Any materials that
discuss DMPs must include the following:
Our DMPs are voluntary programs that serve the dual role of helping you repay your
debts and helping creditors to receive the money owed them.
OFFICIAL COMMENT:
Optional language is underlined above.
Agencies must submit their dual role disclosure form to the NFCC annually or when the
disclosure form is changed.
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Model Member Agency DMP Duration Disclosure
Member agencies must provide to each client enrolling in a Debt Management
Plan (DMP) a reliable estimate of the length of time it will take to complete the
DMP. This estimate must be provided in writing and identify all the clients debts
that are included in the plan; the total debt owed to each creditor; the proposed
payment to each creditor; and the anticipated number of months to liquidate the
debt. This estimate must be provided within 30 days of the date that the client
submits their complete request for a DMP.
OFFICIAL COMMENT:
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Fiscal Integrity
Member agencies must have sufficient internal controls to protect the assets of the
organization from acts of fraud, misrepresentation, or misallocation.
OFFICIAL COMMENT:
NFCC member agencies are expected to handle all financial activities in a professional manner.
Member agencies shall secure insurance in an amount appropriate to cover potential losses and
meet all applicable state bonding requirements.
Member agencies must reconcile operating accounts on a monthly basis.
Member agencies must immediately report to the NFCC all known or suspected acts of fraud,
misrepresentation, or misallocation of funds.
Member agencies must notify the NFCC if their reserves fall below three months of operating
expenses.
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Client Trust Accounts
Member agencies must have sufficient internal controls to protect client funds from
acts of fraud, misrepresentation, or misallocation. Transfer or use of client funds
for any purpose other than repayment of client debt is strictly prohibited.
OFFICIAL COMMENT:
Member agencies must exercise diligence in their fiduciary capacity as custodians of client funds
entrusted to them. Client funds will be kept separated and segregated from operating account
funds. Client funds must be deposited in a separate client deposit account in a federally insured
financial institution.
Member agencies shall secure insurance in an amount appropriate to cover potential losses and
further meet all applicable state bonding and insurance requirements.
Member agencies will reconcile client deposit accounts on a monthly basis.
Member agencies must immediately report to the NFCC all known or suspected acts of fraud,
misrepresentation, or misallocation of funds. Member agencies must also report unexplained
variances in the trust account in excess of 1% of the trust account value.
67

Annual Financial Audit
Member agencies shall have all financial books and records audited on an annual
basis. Member agencies shall provide the NFCC with an entire copy of the
completed audit report within 180 days of the close of each fiscal year. The audit
report should include a note referencing the fact that a separate client trust account
is maintained and that the account was reviewed by the auditor as part of standard
audit procedures. Member agencies may submit a separate letter from their
auditors noting the client trust account was reviewed if the trust account does not
appear as part of the financial statements.
OFFICIAL COMMENT:
Member agencies must have an audit conducted not less than annually by an independent
Certified Public Accountant. The audit must be conducted in accordance with Generally
Accepted Auditing Practices (GAAP) as defined by the American Institute of Certified Public
Accountants. Tests of compliance and evaluation of controls associated with this GAAP audit
are to be applied to client deposit accounts and activity as well as the operating accounts and
statements of the members, and shall be so noted by the auditor.
The governing board must appoint a board member(s) to meet with the independent auditor to
review the auditors findings. The board member(s) must make a report to the full governing
body at the next officially scheduled board meeting.
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IRS Forms 990 and 990-T
Member agencies must file accurate and timely 990 and 990-T (if applicable)
forms to the Internal Revenue Service. Member agencies must provide a full copy
of both forms (if applicable) to NFCC within thirty days of filing.
OFFICIAL COMMENT:
If member agencies submit an extension request, it must be filed within 5 months from the end of
the agencys fiscal year to be in compliance. Member agencies must submit copy of extension to
NFCC within 30 days of filing.
Member agencies under NFCCs tax umbrella are prohibited from engaging in activities that
would endanger the non-profit status of the umbrella.
Member agencies under NFCCs tax umbrella must submit changes to tax exempt purpose in
writing to NFCC 90 days prior to implementing program. NFCC has the right to deny activity if
activity is deemed to jeopardize tax exempt umbrella.
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Governance / Board of Trustees
To ensure broad-based, non-discriminatory community representation, NFCC
member agencies shall have a diverse, voluntary governing board comprised of at
least 10 members. No more than 10% of the voting members of the governing
board may be persons directly or indirectly compensated by the NFCC member
agency. No family members of the personnel of the NFCC member agency may
serve on the governing board.
The governing board shall be comprised of persons who do not have, or give the
appearance of, a conflict of interest with the NFCC member agency. Governing
board members and related parties are prohibited from using their relationship with
the NFCC member agency for personal gain. This prohibition, however, does not
apply to the compensation received by paid personnel of a NFCC member agency
who serve as a governing board member.
Member agencies shall establish and enforce a conflict of interest policy for
employees and governing board members that includes the principles and
prohibitions embodied in this standard.
OFFICIAL COMMENT:
Governing board members must disclose any business relationship with or financial interest in a
corporation, partnership or entity with whom the NFCC member agency transacts business and
must not participate in any NFCC member agency governing board discussion or vote
concerning such corporation, partnership or entity.
No governing board member or related parties can serve as an officer, director, employee,
partner, proprietor, or own or control 10% or more of any for-profit corporation, partnership or
entity with whom the NFCC member agency transacts business.
Nothing in this standard or official comment prohibits governing board members from providing
free or discounted products or services to an NFCC member agency. The provision by a
governing board member of discounted products or services, however, must be supported by
documentation showing the fair market value of such products or services. The documentation
must demonstrate that the products or services were provided to the NFCC member agency at a
discount.
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Nothing in this standard or official comment prohibits a person who serves as an officer,
director, employee, partner, proprietor, or owns or controls 10% or more of a credit granting
organization from serving as a governing board member of a NFCC member agency, provided,
however, that no more than 40% of an NFCC member agency governing board may be
comprised of such persons.
Related parties include family members and businesses in which a person owns or controls 10%
or more of the entity. Family members include, but are not limited to, parents, spouses, siblings,
children, stepchildren and relatives-in-law.
71

D&O, E&O and Fidelity Insurance
Member agencies must carry adequate insurance and/or bonding on all employees
with any access to agency and/or client funds.
Member agencies must name the NFCC on their certificate of insurance and/or
bonding policies for the sole purpose of receiving notice from the insuring
company of any potential lapse in coverage.
OFFICIAL COMMENT
Member agencies must carry appropriate Directors & Officers (D&O), Errors & Omissions
(E&O), and Fidelity (employee dishonesty) coverage with limits deemed appropriate by its local
board of trustees and/or state/local requirements.
72

Fair Fees Guideline
Member agencies should keep fees charged to customers or clients as low as
possible. Member agencies may not refuse to provide counseling due to a clients
inability to pay.
OFFICIAL COMMENT:
As a non-profit human service agency that serves individuals and families in financial distress,
member agencies should strive to make their services available to as broad a population as
possible and not limit access to services due to an inability to pay.
Member agencies may not receive fees in advance of service.
Member agencies must disclose within the DMP an estimate of the total fees to be paid to the
organization by the client and/or the creditor over the term of the agreement.
73

Ethical Practices and Conduct
Member agencies will follow the highest ethical standards in governing their
organizations and conducting all activities to avoid harming, misleading,
confusing, or undermining consumers, clients, volunteers, employees, media, other
NFCC members, and the NFCC.
OFFICIAL COMMENT
Member agencies are prohibited from providing false or misleading information about an
organization or individual to the public; this prohibition precludes using NFCCs communication
tools and systems to provide information to NFCC members that cannot be substantiated.
Member agencies must maintain the confidentiality of information entrusted to them or known to
them as a result of their professional activities.
Member agencies must manage all financial activities honestly following policies and procedures
established to ensure financial honesty and prevent individual gain at the expense of a member
organization or the NFCC.
Member agencies must assume responsibility for remediating errors caused by any of their
employees.
74

Advertising
Member agencies shall not engage in deceptive, misleading or false advertising,
and shall adhere to the highest standards of honesty and fairness. Member
agencies must have the ability to prove any stated claim made within an
advertisement.
OFFICIAL COMMENT:
Member agencies must accurately describe advertised services.
Member agencies must list their name, corporate address, phone number and if appropriate,
branch location on their website homepage and other nationally publicly distributed or available
materials.
On locally distributed or available printed materials and printed advertisements, Member
agencies must list their corporate name, corporate address, and corporate phone number or the
appropriate local branch name(s), local address(es), and local phone number(s).
Member agencies are prohibited from referring to themselves as Local in any communication
in a community if they do not have a brick and mortar office in the community in question.
Member agencies are prohibited from publishing a phone number with an area code and local
exchange in any geographic area where they do not have a brick and mortar office.
75

Compliance with Federal, State, and Local Laws
Member agencies are responsible for understanding and complying with all
federal, state, and local laws. Member agencies must be appropriately licensed
and/or registered as required by law.
OFFICIAL COMMENT:
Member agencies must notify the NFCC of any notice of investigation or actual investigation by
a federal or state regulatory entity within five business days of receipt.
76

Grievances
Member agencies must establish written procedures to provide consumers and
clients with a formal mechanism for expressing and resolving complaints and
grievances.
OFFICIAL COMMENT:
Member agencies must provide consumers a grievance procedure at the time of initial
application, and to clients upon request or at the initiation of a grievance.
Member agencies must include an appeal process and ensure the timely resolution of issues. At
the conclusion of the process, written documentation of final resolution must be included in
client files.
Member agencies must provide all clients access to their individual files as long as the clients
review is done on site and in the presence of agency personnel. Clients have the right to include
statements in their files regarding the services they have or wish to receive.
Member agencies must provide NFCC with their grievance policy and procedures if requested.
77

Private Inurnment and Private Benefit
Member agencies must not be organized or operated for the benefit of private
interests, such as the creator or the creator's family, shareholders of the
organization, other designated individuals, or persons controlled directly or
indirectly by such private interests. No part of the net earnings of a section
501(c)(3) organization may inure to the benefit of any private shareholder or
individual. A private shareholder or individual is a person having a personal and
private interest in the activities of the organization.
OFFICIAL COMMENT:
Member agencies are prohibited from transferring property to employees and/or their families
and/or other closely related parties such as board members or vendors for less than market value.
Member agencies are prohibited from signing above market value contracts with any individual
or organization.
Member agencies must be able to justify employee salaries within local, regional, or national
employment markets as appropriate.
Member agencies are prohibited from paying unreasonable compensation to employees. Member
agencies must review salary structure with their Board at least bi-annually and such discussion
should be noted in the minutes of said board meeting.
78

Reporting
When requested and approved by the Board, member agencies must submit
accurate data to NFCC by stated deadline.
OFFICIAL COMMENT:
NFCC will require specific data on a quarterly basis and may on an annual basis require
additional information. Additional requests will state the need to comply with this standard when
information is necessary.
Member agencies needing clarification on requested information must send to NFCC a
clarification request in writing at least seven days prior to submission deadline.
79

Nepotism
Member agencies shall maintain policies and procedures that prohibit nepotism
and specify:
a. conditions for employing and retaining relatives of governing body or
advisory board members;
b. conditions for employing and retaining relatives of employees; and
c. protection against favoritism in supervision and employment decisions.
OFFICIAL COMMENT:
NFCC defines nepotism as favoritism based on a personal relationship.
Member agencies must report annually all situations of direct and indirect family member
supervision that exist at the Officer or Key Individual level as defined by the Internal
Revenue Service for Form 990 purposes. Such member agencies must annually submit all
policies related to the direct or indirect supervision of individuals.
Member agencies must have nepotism policies and procedures in place that:
allow non-family and family members to file grievances to an independent individual;
require independent review, verification, and justification of salary increases or bonuses.
80

Technology Requirements for Delivering Quality Programs
Member agencies must have the technical systems and capability to assure the
timely, accurate and effective delivery of quality programs.
OFFICIAL COMMENT:
Member agencies shall possess an adequate technical infrastructure to address all
communications with clients; specifically, they must have sufficient phone lines and Internet
capabilities if they provide services by phone or Internet.
Member agencies must have unique email addresses for senior staff.
Member agencies must take precautions to protect electronic systems and communications.
Member agencies must have a web site that identifies the products and services that they deliver
to the public.
Member agencies must disburse client payments at least once a week.
Member agencies must have the ability to have ready access to credit reports.
Member agencies must have the ability to electronically transmit non-client-specific data in a
prescribed format as set by the NFCC Board of Trustees.
81

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BOOK ONE:

BASIC COUNSELING PRINCIPLES

2005 Copyright by the National Foundation for Credit Counseling.

Book 1 - Basic Counseling Principles

Book One - Basic Counseling Principles

Chapter 1: Basic Counseling Principals

Chapter 2: Communicating Effectively

Chapter 3: The Counseling Relationship

Chapter 4: Diagnosing Problems and Understanding Client Values

Chapter 5: Crisis Intervention and the Need for Change

Chapter 6: Life Events, Family Structure, and Financial Management

NFCC Counselor Certification 2005V1

Book 1 - Basic Counseling Principles

Counseling the Transition from Marriage to Divorce

Chapter 7: Counseling Effectiveness

NFCC Counselor Certification 2005V1

Book 1 - Basic Counseling Principles

NFCC Counselor Code of Ethics

Fiscally responsible in dealing with clients funds.

Consistent in word and deed.

Respect for the integrity of the client.

Promotion of the clients best long-term interests.

Avoids situations leading to potential conflict of interest.

Maintains professional counselor/client relationship.

Conducts oneself in a professional manner at all times.

Strives for continuous improvement in oneself and the profession.

Acknowledges personal limitations.

Empathizes without being enabling.

Refrains from giving legal advice.

Refers to others when clients problem is beyond the scope of ones

Provide proper documentation of cases.

Works toward and maintains certification.

Contributes to the professionalism of the field.

Holds the respect and cooperation of the colleagues.

NFCC Counselor Certification 2005V1

Book 1 - Basic Counseling Principles

Respects Clients privacy.

Provides information to those outside of the agency on a need-to-know

Handles clients files with due diligence for safekeeping.

Takes considerable care in internal discussions to maintain clients privacy

Unbiased and non-judgmental.

Serves as a reliable third party in the relationship between client and

Establishes Debt Management Plans when necessary based on the equitable

Provides clients information with which to make informed choices.

Recognizes and respects differences in clients value systems, culture, and

Non-discriminatory with regard to age, gender, race, creed, national origin,

Forthright in discussions pertaining to agency funding, policies and

Roles of the Counselor

NFCC Counselor Certification 2005V1

Book 1 - Basic Counseling Principles

NFCC Counselor Certification 2005V1

Book 1 - Basic Counseling Principles

Distinguishing Financial Counseling from Financial Planning

The Counseling Process

NFCC Counselor Certification 2005V1

Book 1 - Basic Counseling Principles

NFCC Counselor Certification 2005V1

Book 1 - Basic Counseling Principles

objectives must be precise, achievable, and measurable.

NFCC Counselor Certification 2005V1

Book 1 - Basic Counseling Principles

NFCC Counselor Certification 2005V1