5 Reasons You Need to See a Financial Counselor

You’re worried about meeting day-to-day expenses or saving for things like college. Creditors and debt collectors are blowing up your phone. You’ve repeatedly been denied for loans or credit cards. If any of this sounds familiar, chances are you need help straightening out your finances.

AFCPE Executive Director Rebecca Wiggins

If you’ve never sought out professional help before, it’s easy to get confused by the alphabet soup of acronyms surrounding financial professionals. Do you go with a CFP, CFA, CIC, CPA, ChFC or PFS? Uh, what?

However, there’s one three-letter combination you should know — AFC® (Accredited Financial Counselor®), a special financial professional designation created by The Association for Financial Counseling and Planning Education® (AFCPE®).

I spoke with the AFCPE’s Executive Director Rebecca Wiggins to find out why you might want to see a financial counselor.

1. They specialize in everyday problems

While a Certified Financial Planner® (CFP®) is a good option when you’re trying to grow your investments or plan for retirement, an AFC focuses on the complex problems you’re facing today.

Specifically they specialize in problems common to low- and middle-class families like debt, credit issues and building fundamental financial management skills. But financial stress and overspending are not exclusive to one particular income bracket.

“One of the big things our professionals are able to do is help people establish and understand how to maintain a realistic spending plan, live within their means and set goals for a brighter financial future,” Wiggins said. “Most of the time it’s about helping them to see their lives through a financial lens and to find savings opportunities like making coffee at home.”

Since AFCs do not always negotiate with creditors on your behalf , it may be helpful to also contact a debt relief or credit repair service if you’re struggling with delinquent debts.

2. They take a holistic approach to personal finance

AFCs realize a variety of factors affect your financial health. They work to understand what is driving a particular client’s issues and help him or her make the best choices.

“[AFCs] really look at the whole individual and their life situation,” Wiggins said. “They will help the client understand what the underlying causes are to some of these issues related to emotional connections with money, behavior issues and other things that may be triggers.”

3. They’re not trying to sell you something

Commission-based financial planners make their money by selling their clients investment packages like mutual funds and other financial products. While these products have the potential to make you some money, the professionals selling them may be placing their interests before yours.

“[AFCs] provide an education and help the client understand what their options are, but at no point are they selling a product,” Wiggins said. “And that’s a big distinction.”

4. They require ongoing education

An AFC’s education doesn’t end the moment they receive their accreditation. To maintain their standing with the AFCPE, financial counselors must complete continuing education units every two year reporting period.

“People should understand the value of what those marks mean,” Wiggins said. “AFCs require an ongoing, comprehensive professional development and a strong commitment to a code of ethics.”

5. They’re well-versed in the latest research

Twice a year, AFCPE publishes the Journal of Financial Counseling and Planning, featuring the latest peer-reviewed research from academics and experts alike. In it, AFCs discover the latest financial management and counseling techniques.

“When you join the association as a member, you get access to this really great research journal and newsletter articles about what’s going on in the field,” Wiggins said. “When we started just over 30 years ago, experts in the field recognized the need for an association to provide support and set the standards for the field of financial counseling and education.”

It’s also important to approach counseling with the right attitude. While a single session has its own benefits, don’t expect an AFC to clear up your financial woes overnight.

“You can’t expect to go on a diet for one day and have results,” Wiggins said. “If you really want to not only fix your immediate issue, but go deeper for lasting behavior changes, a several session engagement is ideal.”

To start working with your very own AFC, visit members.afcpe.org/search to find one in your area.

Photo credit: arbored.com