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Financial Counseling and Education — The Missing Link
By Rebecca Wiggins, MFFP, MBA

There is an old saying, “money, like air, doesn’t matter until you don’t have any,” that rings true for far too many Americans these days. Money touches every part of our lives, and lack of financial security can negatively impact all aspects—from employment to health, to relationship satisfaction.

It is especially important when you consider the following statistics:

• Nearly 80% of all Americans are struggling to make ends meet and are reportedly living paycheck to paycheck.

• 40% of people could not come up with $400 for an emergency without taking drastic measures or borrowing from a family member.

• An estimated 43.1 million people (13.5% of the population) are living in poverty, including 14.5 million (19.7%) children.

Each sobering statistic illustrates the need for financial counseling, coaching, and education, not only for individuals and families, but also for the professionals who support them.

Behind the Numbers
When working with clients, social workers uniquely bring two critical factors to the client/professional relationship:

1) Trust. When it comes to social and economic issues, social workers are on the front lines. They support individuals and families with issues surrounding mental health, substance use, intimate partner violence (IPV), housing insecurity, public benefits, and more. Social workers have a deep understanding of the day-to-day realities that clients face, and often form strong bonds with the individuals they serve. This allows social workers to build a trust that uniquely positions them to meet individuals and families where they are.

2) A Trauma-Informed Lens. Social workers are also trained to approach each issue with sensitivity to trauma. “Social workers are trained to prioritize psychological and physical safety first,” says Cindy Morita, LCSW, AFC candidate. “However, in instances of IPV, financial abuse often plays a factor and many women struggle to leave the relationship because of financial instability. A strong foundation of financial knowledge and skills can help a social worker create an intervention plan that empowers the client to achieve independence.”

The Missing Link
Social workers are able to help families navigate survival needs and connect them with vital resources to overcome challenges, but many find it difficult to address financial topics that could help clients navigate challenges across social services and ultimately lead to long-term financial security. Social workers have the unique opportunity to utilize their training to help bridge the gap between the issues affecting individuals and families and the money needed to meet their goals.

A Case Example
Susan Schroeder, AFC, director of Mission Fulfillment, Neighbors, Inc.

A client was having problems paying her rent and was very apprehensive about possible eviction. She shared that she had “fallen behind” and asked for a grant to help her “get caught up.” Her goal was to keep her housing so that her daughter’s education would not be disrupted.

Given the time and space to explain her situation, Susan Schroeder, AFC—who is certified as a financial counselor—helped the client realize that her issue was not an emergency, but rather a result of being in a pattern that was not effective for her goals. With proper counseling and guidance, her client was able to identify a few strategies she could use to balance her budget and stay on track. Susan was able to make a referral to a nonprofit organization specializing in breaking the cycle of payday loans, provide assistance in applying for a cost savings program, and create a completed budget with the client’s ongoing personal financial plan.

She was also given a small grant of less than $200. Today, she has paid off her payday loan, is saving money on monthly bills, and has a plan for her and her daughter’s future. Financial counseling enhances social support and gives clients the tools they need to thrive.

Bridging the Gap
While it may feel outside of the scope of your sphere of influence, money problems are often at the center of emotional dysfunction, family stress, and poor health. Without this type of training, you might feel empathy for clients stuck in a payday loan cycle, but have no concrete strategies or tactics to help them get out of it. Stress can be relieved with support, education, and counsel.

When it comes to the topic of financial capability and ensuring access to safe and trusted financial professionals and resources, it’s critical that social workers have a seat at the table. By investing in their own financial education and training, they can help move clients beyond short-term solutions and provide a more holistic, fluid treatment plan focused on long-term financial stability. Social workers can help their organization or agency develop programs and services focused on sustainable impact. And ultimately, they can better position themselves to lead the field in developing solutions that alleviate financial vulnerability and strengthen financial stability.

— Rebecca Wiggins, MFFP, MBA, is executive director of the Association for Financial Counseling and Planning Education (www.afcpe.org) where she leads the professional membership and certification organization for the field of financial counseling, coaching, and education, and provides an annual research and training symposium for field professionals.