Navigating financial storms: the vital role of financial counselling

Moneycare financial counsellor Lucy (left) says financial counselling can change lives.  

From living and working in economically developing countries to navigating superyachts for the mega-rich as first mate, then captain, Lucy — now a Moneycare financial counsellor — has gained unique insights into how people relate to money, a subject she’s always found fascinating. This Moneycare Week (19–25 January), Lucy shares her insights and highlights the transformative power of financial counselling.

“I didn’t grow up with money. We had just enough to make ends meet, and not always so,” says Salvation Army Moneycare financial counsellor Lucy. “From a very young age, I’ve been fascinated by people’s relationship with money and the financial habits and beliefs we form, even as kids.”

After living and travelling extensively around the globe, Lucy has observed that while a certain level of financial stability brings security and peace, true contentment can often be found in some of the world’s economically poorest communities — and is sometimes missing among billionaires.

Now a trained Moneycare financial counsellor, Lucy is passionate about helping people navigate the choppy waters of financial challenges.

While every situation is unique, she notes common patterns, explaining that financial struggles often arise from sudden changes, such as the loss of an affordable rental, job loss, illness, or natural disasters.

“The first three to six months after a change in circumstances is when people can get into a lot of trouble,” Lucy explains. “Whether it’s a separation, job loss, or domestic violence, any significant change can have a massive impact on finances.”

Lucy is passionate about helping people navigate financial challenges.

Finding support in times of trouble

During times of emotional upheaval, such as financial crises, people have critical opportunities to reassess their money plans, reach out to banks or creditors, or seek guidance from a financial counsellor.

Lucy not only provides general support but also specialises in problem gambling referrals.

She explains that financial counselling is often about “listening and understanding that everybody’s situation is a little bit different, and what might work for one person might not work for the next.” Her approach focuses on empowering people to regain control of their finances by tailoring guidance to each unique situation.

In the initial stages, Lucy emphasises that financial counselling is primarily about “listening and understanding,” creating a supportive space where people feel heard and can explore solutions that best fit their needs.

She explains that a financial counsellor can help identify what’s causing an imbalance in the budget. “Does the person have a clear idea of their budget and financial capacity? What options are available to them — whether that’s adjustments to the budget, debt management strategies, or referrals to other services?” she asks.

“Collaboration is also key. I regularly refer people to gambling help services, domestic and family violence support services, housing services, legal services, and counselling services.”

 

Lucy in her previous role as superyacht captain.

Importance of financial understanding

Lucy believes that improving financial education and literacy is essential to taking control of personal finances.

For those looking to build their financial confidence and knowledge, she recommends:

• Starting with the basics: Understanding where money is sitting is crucial. Without knowing your starting point, it’s difficult to plan the journey ahead.

• Tracking spending: Breaking down annual spending into weekly or fortnightly amounts helps reveal where money is going — and where it needs to go.

• Using learning tools: Begin with the Moneycare You’re the Boss eBook and the budgeting tool on moneysmart.gov.au.

“Financial education isn’t as scary as it seems,” Lucy says. “These tools provide a clearer picture of personal finances and help in planning for the future.”

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In one recent case, Lucy helped a person still dealing with the effects of a flood. “The water had gone over the floorboards of her property, and the insurance company cash-settled her for just $2500,” Lucy recalls. “She had been living in a house infested with mould, with no repairs done.” 

Lucy worked with a community legal agency to fight for proper repairs and compensation. “Had that not happened, she would still be living in a house [years after the flood] that did not have carpets replaced and was still water damaged.”

More than two years on, Lucy is still working to support the community member.

The complexity of insurance claims, especially after natural disasters, is an issue Lucy warns of. “In recent times, we’ve seen so many people discover they were covered for one type of water damage but not another. It’s devastated a lot of people, so it’s really important we all understand what we are covered for — and whether it’s enough cover.”

“If you took out a policy 10 years ago, the cost to rebuild your home has probably gone up significantly, and the value of your contents would likely have increased as well,” she says.

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Navigating mortgage and interest rate pitfalls

While the rental crisis and cost-of-living pressures deeply impact many of the community members Lucy supports, she also sees an increasing number of homeowners under financial pressure and needing support with debt management.

Lucy advises homeowners to review their mortgage interest rates every six to 12 months. “Call up the home loan department and make sure you’re on the best rate.” Lucy explains that one person currently accessing financial counselling with her was given a 0.9 per cent reduction on their home loan rate, just by asking.

Lucy also warns about council rate and body corporate arrears.

“Arrears in either of these can put a property at risk over time,” Lucy says. “People often don’t understand that those debts are secured by their home and depending on how long they’ve been in arrears and the amount, they can even force the sale of the property.”

Life-changing outcomes from financial counselling

Last financial year 2023/24 Moneycare assisted more than 11,500 individuals and provided more than 51,000 sessions of care to those in financial need.

For Lucy, a hugely satisfying part of her job is seeing how even small interventions can have a big impact. “I’ve had people have a $1500 debt taken care of that they couldn’t manage, and it’s completely changed their lives,” she says. “It’s not always the size of the concern, but the impact it has on the person.”

Lucy shares a memorable piece of feedback, which is repeated again and again by community members supported by Moneycare: “You’ve taken such a load off my shoulders, I can breathe again.”

Ultimately, Lucy believes financial counselling helps people overcome their fears and take control of their finances. “For so many of us, finances cause a lot of stress, and that stress filters into other aspects of life,” she says. “If we can work on this one area, it often [significantly] relieves pressure in other areas too.”