An insightful report into the impact of financial counselling on both debt resolution and the overall wellbeing of consumers has found that the significant majority of those surveyed benefitted both financially and personally from seeking the assistance of a financial counsellor – and that many wished they had done so earlier.
The report, I wish I’d known sooner, surveyed 225 participants who had accessed the financial counselling services of The Salvation Army this year. The report was commissioned by The Salvation Army and compiled by Dr. Nicola Brackertz of the Swinburne Institute at Swinburne University of Technology.
“Good quality research about financial counselling provides an invaluable insight into both the quantitative outcomes – the degree to which the financial situation of clients is improved, and the qualitative outcomes – the degree to which clients report improvements in other aspects of their life after seeing a financial counsellor,” says Fiona Guthrie, Executive Director of Financial Counselling Australia (FCA). “We congratulate The Salvation Army on their foresight and initiative in commissioning this significant piece of research.”
The research contains important information for a number of stakeholders including the financial counselling profession, the government and the general public. “The report found that an underlying theme for many survey participants was regret that they hadn’t sought financial counselling assistance earlier,” Ms Guthrie says. “One of the main reasons for this delay was a lack of awareness – consumers are often not aware that a free, unbiased, confidential service is available to help them. As a profession we need to increase public awareness of financial counselling.”
Of course increased public awareness of financial counselling would lead to greater demand for services and FCA encourages both Federal and State governments to recognise the financial and social benefits of timely counselling services. “Approximately two-thirds of research survey respondents felt that their financial difficulties were resolved as a result of seeing a financial counsellor,” Ms Guthrie said. “More than half thought that the advice they received helped them to avoid bankruptcy and almost three-quarters agreed that the advice they received helped them to avoid or curtail legal action. Three-quarters also felt that they were now better able to prioritise debt.”
A reduction in financial stress also has a significant flow-on effect to other aspects of people’s lives. “The report found a strong correlation between improved finances and improved mental and emotional health and physical wellbeing,” Ms Guthrie said. “Over two-thirds of respondents felt more positive about the future and significantly, forty-five percent of respondents reported better relationships with family and friends. We know that conflict about money is regularly cited as a main reason for relationship breakdown so helping clients to reduce their financial stress will help to reduce the likelihood of family conflict.”
In terms of the wider community, FCA urges everyone to develop a greater sense of urgency about any financial difficulties they may be having. “According to this study, many people juggle their financial difficulties and financial stress for a long time before seeking help,” Ms Guthrie said. “The research very clearly shows, though, that the sooner someone asks for help to address their problems, the more likely it is that their financial problems can be solved. So please – don’t wait for a year, two years, before seeking help. Address any financial problems early and with confidence, and avoid becoming trapped in a cycle of debt.”
The full report, I wish I’d known sooner, can be accessed via The Salvation Army website:http://www.salvationarmy.org.au/ or accessed directly by clicking here:http://www.salvationarmy.org.au/Global/News%20and%20Media/Reports/2012/00099-I-wish-I-had-known-sooner-Oct-2012.pdf
“I am very grateful to be receiving help from a financial counsellor … I didn’t realise that there was a service that we would not have to pay for.” Survey participant
Anyone who is in financial difficulty can contact a free and independent financial counsellor on 1800 007 007.