Summary

Financial counselors may not hold the highest certifications that financial advisors do, but they offer essential services tailored to individuals navigating debt, budgeting, and saving—especially for lower-income clients. These professionals often have specialized training in public benefits and other financial areas that impact marginalized communities. Best of all, many financial counseling services are available for free or at low cost.

💸 What Do Financial Counselors Do?

Financial counselors provide support across a wide range of personal finance topics. From building a budget and setting financial goals to understanding credit scores and navigating public benefits, these counselors are trained to help clients take control of their financial lives. Many also have experience with military pay systems, disability benefits, and housing issues. Unlike financial advisors, financial counselors typically do not manage investments or sell financial products. However, if you're looking for guidance on foundational money management, they're a great place to start.

Takeaways:

• Financial counselors help with budgeting, saving, debt, public benefits, and more.

• They often serve clients from lower-income backgrounds or with specialized financial needs.

• Some financial counselors specialize in housing-related services like avoiding foreclosure.

Key Terms

• Financial Counselor: A professional who helps individuals manage basic financial challenges, such as budgeting and debt.

• Housing Counselor: A type of financial counselor who assists with housing issues like affordable housing and foreclosure prevention.

• Accredited Financial Counselor (AFC): A certified counselor with 1,000+ hours of financial counseling experience who has passed an exam from the Association for Financial Counseling & Planning Education (AFCPE).

💰 How Much Do Financial Counselors Cost?

Costs can vary depending on where a financial counselor works. Those employed by the military, universities, or nonprofits often offer services for free. Students may have access to financial counseling through campus career or money management centers. For those in private practice, counselors may provide an initial session at no charge, then charge a flat fee, hourly rate, or subscription. Importantly, AFC-certified professionals are required to be transparent about their fee structures and to keep fees reasonable.

Takeaways:

• Many counselors offer free sessions through military programs, universities, or nonprofits.

• Private practice counselors may charge flat fees or offer monthly subscriptions.

• Transparency and affordability are key requirements of AFC-certified professionals.

Key Terms

• Fee Structure: How a counselor charges for services (e.g., hourly, flat fee, or subscription).

• AFCPE: The Association for Financial Counseling & Planning Education, the organization behind the AFC certification.

🔍 How to Find a Financial Counselor

If you're ready to work with a financial counselor, your best bet is to use the AFCPE's directory to find a certified professional. This ensures that you're working with someone who meets rigorous training and experience standards. Some counselors are also currently offering free financial help for individuals impacted by the COVID-19 pandemic. You may also find accessible services through platforms like Ellevest, which offers affordable sessions on specific financial topics even if you’re not a member.

Takeaways:

• Use the AFCPE website to find certified financial counselors.

• Free counseling is available through certain programs, especially for those impacted by COVID-19.

• Online platforms like Ellevest offer flexible, à la carte counseling services.

Key Terms

• Ellevest: A digital financial platform that provides women-focused financial services, including one-on-one counseling sessions.

• COVID-19 Financial Relief: Temporary financial counseling assistance available to those affected by the pandemic.

📊 Financial Counselors vs. Financial Advisors

Financial counselors and financial advisors serve different roles. Counselors tend to focus on budgeting, saving, and debt—areas critical for lower-income individuals. In contrast, financial advisors usually serve middle- to high-income clients with services like investment management, estate planning, and tax strategies. Unless a financial counselor is also a licensed investment advisor, they cannot offer investment advice. If your needs revolve around basic money management, an AFC-certified counselor could be an ideal, low-cost fit. But if you need comprehensive financial planning and asset management, consider working with a certified financial planner (CFP).

Takeaways:

• Financial counselors help with budgeting and saving, while advisors focus on investment and planning.

• AFCs generally do not manage assets or sell financial products.

• For investment help, a CFP or licensed financial advisor is more appropriate.

Key Terms

• Financial Advisor: A professional who provides a broader scope of financial services, including investment management and estate planning.

• Certified Financial Planner (CFP): A financial advisor with a recognized certification in comprehensive financial planning.

Conclusion

Whether you're looking to get your finances on track, tackle debt, or create a plan for saving, a financial counselor can be a powerful ally—especially if you're looking for affordable or free support. Certified professionals with the AFC designation are trained to help you through real-world financial challenges. While they may not manage investments, their guidance can be just what you need to feel confident and in control of your financial future.