At which stage of the financial counseling process do the client and counselor develop an action plan?

The stage of the financial counseling process during which the client and counselor develop an action plan is the Understanding stage. At this point, efforts are focused on identifying the client's financial situation, needs, and goals. Through discussions and assessments, the counselor gains insights into the client's circumstances and helps them articulate what they want to achieve.

This stage lays the groundwork for developing a personalized action plan that addresses the client's specific challenges and aspirations. By fully understanding the client’s situation and collaboratively establishing priorities, the counselor and client can then tailor strategies to meet those needs effectively, setting the stage for implementation in later steps of the process.

During subsequent stages, such as Implementing, the focus would shift to putting the action plan into practice, while Evaluating involves reviewing the outcomes and making necessary adjustments. Preparation comes earlier in the process, focusing on gathering relevant information and establishing rapport. Thus, the Understanding stage is crucial for creating a solid action plan that guides future financial decisions and actions.