The first step in financial counseling doesn’t focus on dollars and cents but rather goals and values.
Financial counselors should start the process by understanding what a member wants to accomplish with money—and assessing whether the member has set realistic goals, says Chris Wolgamott, a senior financial counselor at $997 million asset Meritrust Credit Union in Wichita, Kan.
A financial counselor also must determine the member’s values and attitudes toward money because that will play a large role in developing a plan to achieve the member’s financial goals.
“Financial counseling, first and foremost, has to be about reaching attainable goals for the member,” Wolgamott says. “If you don’t know what you’re aiming toward, then there’s no way for you to have a good relationship to do financial counseling.
“Defining what success is at the beginning of the financial counseling relationship,” he adds, “is really paramount to, ‘Where do we go from here?’ and ‘What do we do from here?’”
After identifying goals, financial counselors should figure out a member’s value system: the religious, cultural, and socioeconomic beliefs that guide people’s decisions about where they will and won’t spend their money.
“We have to be aware of those values when we work with people,” says Wolgamott, who recently taught a session at CUNA’s Certified Financial Counselor School called, “Money, Attitudes, and Behaviors.”
Values are deep-rooted and rarely change, Wolgamott says, but a person’s attitude about money depends on his or her current financial situation and can change over time.
Communication is key when putting together a financial plan, whether that communication occurs between a financial counselor and a member or between spouses.
Often when a couple comes in for financial counseling, communication is the first issue that needs to be addressed, Wolgamott says.
Couples don’t always talk to each other about their views and values regarding money, or goals they’re working toward—whether they want to save for a down payment on a house or merely have enough money to pay the bills.
“A lot of times it is just communication,” Wolgamott says. “One person wants one thing and the other person wants another thing. How do you balance those two desires and make it work within the couple?”