The financial statement
Very often, the process of producing a financial statement enables a client to see the sources of their financial problems. When all items of expenditure have been listed, it is often clear that these cannot be met from available income. Ideally, if there is a need to cut expenditure, it will occur to the client themself. If this does not happen, you could suggest ways of budgeting and the likely results of such strategies to the client.
Be aware of vocabulary, body language and tone of voice, to avoid giving the impression that you are judging the client. Issues such as drinking, gambling and smoking must be addressed, and you should explain to the client that these are matters which creditors are likely to raise and so have to be discussed. Any suggested cuts in expenditure should be for the client’s benefit.
On the other hand, this exercise may establish that the client is able to meet all their contractual liabilities together with any accruing charges as well as maintaining their essential expenditure, and consequently does not need debt advice or any of the strategies discussed in this Handbook.