7. Budgeting advice
Although advice on budgeting is not debt advice, you should use the procedures and skills described in other parts of this Handbook to assist clients to deal with their debts. Budgeting advice is now a separate area of advice work in its own right, but it can play a useful part in the debt advice process. Discussing a person’s finances can be a sensitive subject so skilful interview techniques are required. Be careful not to impose your own values on a client.
Some agencies offer clients a session with a budget or financial capability adviser, prior to their debt advice appointment. In this session the adviser goes through the client’s budget in detail and looks at ways in which they could maximise income and minimise expenditure. The budget can then be brought to the debt appointment.
There are particular problems when budgeting on a low income. Often, people on a low income only have access to the more expensive forms of credit. In the absence of credit, goods available are generally more expensive because it is impossible to buy enough to benefit from the lower unit prices charged for larger quantities. Similarly, a client may not have access to the cheapest sources of goods if transport is not available to the large out-of-town stores. Budgeting on a low income often requires purchasing inferior goods because money is not available to buy more expensive goods that would last longer and be much cheaper in the long run.
If poverty exists alongside other factors, such as disability, parenthood or the breakdown of a relationship, it is likely that budgeting is constrained by the time available, which in turn is constrained by the practical and emotional demands of these other situations.