S ince becoming a Dave Ramsey certified financial counselor in 2006, I have been privileged to serve doctors and engineers, welders and carpenters, widows and teenagers. Some have been home runs while others have been strike outs, but, with each client, I have continued to learn ways to counsel more effectively. Hopefully, by sharing some of these strategies, I can help readers better analyze their own finances – or perhaps help others. Because the vast majority of my clients are married, I will be assuming in this post that I am working with a married couple. Both spouses must attend our first meeting. In scheduling the first appointment, I establish my counseling expectations by insisting that we find a time when both spouses can be present. If they can’t find such a time, I explain that they are not going to be able to use my services. My rationale is simple: I cannot help this couple by working with only one of them. Free 30 minutes The first 30 minutes with potential clients are free because I want them to have the opportunity to meet me, discuss their short term and long term goals, understand what the counseling process entails and ask questions — before they decide whether they want my services or not. Assuming they do, we will agree to six months of unlimited meetings, phone calls and emails. Why six months? Because it takes time to develop a workable budget , create a plan and develop the habits needed for long term financial well being. Our first counseling session My goal in the first counseling session is to learn everything I can about this couple’s financial situation. Think of it as the Scientific Method for personal finances: I must induce ALL information before making any deductions. Using a spreadsheet on my computer, connected to a monitor facing our couple, we input all income, all equity, all monthly budget expenses and all debt. Each of these items has its own page, but all interact. During this process, I not only learn the numbers, but I also learn a few things about our couple: which spouse is primarily in charge of the household finances, whether both of them are equally motivated to reach their goals and how well they interact. Once all the data is in place, our spreadsheet will tell us the couple’s net worth, their debt, their cash flow (positive or negative) … and how much. We will eventually want to develop a detailed plan to help them reach their goals, but at this point we only talk big picture. I ask them what they think about the numbers and what life style changes they are willing to make. The numbers can be depressing, but they can also be motivating … my goal is to instill hope while not shielding the truth of the situation. I will email this spreadsheet to the couple, give them a hard copy, or both. At this point, we back away from the numbers and discuss Dave Ramsey’s Baby Steps , which I use as the framework for the plan we will develop. I give them a “Baby Steps” handout and we discuss these steps one by one. Based on their goals and the results of our financial spreadsheet, we talk about why the baby steps are important and which baby step they are on. In future meetings we will fine tune our plan by projecting how long they will be on their current step before advancing to the next one. As we close, I often ask the couple how they are feeling about the session. Sometimes I will ask if they would like for me to pray with them. I have never had anyone say no. Homework During each session, I am jotting specific “homework” tasks for my clients. Examples of homework are: deciding together some cuts in their monthly spending, reading “The Total Money Makeover” by Dave Ramsey (I give all of my clients a hard back copy), checking on specifics of life insurance , trying out the budgeting envelope system (also something I provide) and trying to live on the budget we have established. During that first session, I have made it clear that developing a working budget takes time — that we will try it for a month, see how it went and make appropriate adjustments next month. This homework forces the couple to be accountable – to me, to their budget and to each other. Ongoing Sessions I will begin the second session (and all ensuing sessions) by going over their homework assignments. I will then ask them what questions they may have. At this point, I often discover if one of the spouses is not on board. For example, if Jane is leaning forward, showing me her spreadsheets and dominating the conversation while her husband is sitting silently with his arms crossed, I will try to involve him by asking, “John, what are your thoughts on this particular strategy?” We will make appropriate changes to the budget and develop a more detailed plan for them to reach their goals. I will suggest some strategies, but I want our couple to decide on any spending cuts they need to make. Discussing their priorities and deciding together what to cut can be a testy process, but it is also a healthy opportunity to flush out some issues which needed to surface. Besides, they will have a better chance of making their budget work if they own it. What is a “plan”? A plan is a strategy to reach goals within a set time frame. For example, if our clients’ goal is to get out of debt, I will show them what they need to do –usually a combination of extra job, no eating out, no vacations, sell a car, etc. — in order to reach that goal in the time frame we establish (hopefully 24 months or less). I will also show them how long they will be in debt if they keep doing what they are doing. My biggest payoff Over the years I have been able to give many people hope that they can indeed reach their financial goals. Just last week I received this email: “ Joe, I really believe God was in our decision to seek your wise counsel!! That was a blessing in itself! … We were headed for big trouble. You know the debt we had and still have a good bit. BUT, we are determined with Gods help to get free and we will. THANKS to you! ” Knowing I have made a difference in someone else’s life is the greatest thrill I get from financial coaching. I hope I can continue to do so for many years to come! Readers: Have you ever tried to help others with their finances? How did it go? Do you have any questions about my counseling process? Any tips on what I can do better? Financial tools image from Shutterstock Related Articles: Premarital Financial Counseling: Questions To Ask How To Set Strong Long Term Financial Goals Winning Defensive Financial Strategies (Part 1) Reaching Financial Goals: How To Appropriately Prioritize Joe Plemon, a retired engineer, financial counselor and blogger, lives in Southern Illinois with Janice, his wife of 40 years. Joe likes online Scrabble, St Louis Cardinal baseball, blues music, power naps, high school football, short term mission trips and Sunday family dinners. You can read more from Joe at Personal Finance by the Book .
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Financial Counseling Strategies: How To Help Others