Financial Counseling Certification Program (FiCEP) Practice Exam

Which type of counseling should a consumer use when preparing for a large purchase?

1. Reactive counseling

2. Preventive counseling

3. Retrospective counseling

4. Crisis counseling

The correct answer is: Preventive counseling

Preventive counseling is the most appropriate choice for a consumer preparing for a large purchase because it involves looking ahead and taking proactive measures to avoid financial pitfalls. This type of counseling focuses on planning and preparing for future needs and potential challenges. It equips individuals with knowledge about budgeting, saving strategies, and making informed decisions that align with their long-term financial goals. In the context of a large purchase, preventive counseling encourages consumers to assess their current financial situation, set aside necessary funds, and consider the implications of the purchase on their overall financial wellness. This approach helps consumers avoid unnecessary debt and ensures that they make sound financial choices. Other types of counseling, such as reactive, retrospective, and crisis counseling, are more suited for addressing issues that arise after a financial problem has occurred or when someone is experiencing significant hardship. These methods focus on rectifying past issues rather than on proactive planning, making them less relevant for someone looking to prepare for a major expenditure.