Is change really possible? Chances are good that nearly every week you see clients who want or need to change themselves or their behavior. Why do some succeed and others fail? Are there ways to improve their chances of success?

Executive coach Lynne Hornyak, my partner in conducting teleclasses for financial and counseling professionals, recently introduced me to a remarkable book about change by James Prochaska and two therapist colleagues. Changing for Good: A Revolutionary Six-Stage Program for Overcoming Bad Habits and Moving Your Life Positively Forward (Quill Books, 2002) is an exploration of Prochaska’s research on what he calls “self-changers”: people who have been able to give up smoking or drinking, resolve their destructive emotional habits, and so on.

Prochaska also studied the work of many different kinds of therapists. He found that no matter what kind of specific therapeutic interventions or techniques they used, their clients went through the same stages of change as did the self-changers.

So how do people change? What makes it possible for them to change for good? What interventions are most useful at each stage of working with them?

Prochaska identifies the following six stages of change:

Stage 1: Precontemplation

This is the denial stage: the client hasn’t yet admitted that a problem exists.

Consider the overspender who is dragged into your office by a husband who complains, “She spends so recklessly, we’ll never be able to save for retirement!”

If the wife is in the precontemplation stage, she may retort, “I don’t buy designer clothes or drive a Maserati, so what are you complaining about?” or “You’re so tight, you think any spending is frivolous!” In other words, she doesn’t think she has a problem.

At this stage, if you ask pointed questions or suggest actions the client can take to change a behavior that she doesn’t see as problematic, you will probably join her spouse in becoming a “bad guy.” This is a time for gentle exploration, consciousness-raising, and information-gathering about the issue at hand, with the goal of encouraging her to move to the next phase.

Stage 2: Contemplation

At this point, the client is thinking, “Maybe I do have a problem with spending, but I’m not ready to do anything about it. I work hard, and it’s a great stress reliever for me. Aren’t I entitled to enjoy life a little?”

Once a client begins to contemplate the problem, even if it’s embedded in rationalization and self-justification, your intervention can stimulate the process of change. The way to intervene most effectively is to ask consciousness-raising questions. Try to help clients look at their habit or behavior and begin seeing whether or not it serves them well. For example, you might ask the overspender:

What do you like to spend money on?

Where do you tend to spend it?

Do you have an idea of how much you spend every month?

When you charge things on a credit card, do you tend to buy more often?

Do you have financial goals that are important to you?

Do you have money saved for them?

How do you plan to achieve them?

A process of self-reevaluation also happens during contemplation and the subsequent preparation phase. This involves an emotional and cognitive self-appraisal to see if one’s problematic behavior is at odds with some cherished value. In the best case, individuals end up thinking, feeling, and believing that their life would be improved significantly if they changed the behavior or behaviors in question.

You may be able to guide clients into self-reevaluation by helping them ask the right questions of themselves:

“Why am I behaving like this?”

“What are my underlying needs?”

“What is the effect of this habit on myself? On others?”

“How would others around me react if I changed?”

“How would I feel if I changed?”

From these and similar techniques and questions, a list of benefits and costs can emerge. This is a vital first step in encouraging clients to create a new self-image and to think before they exercise their old bad habits.

In the contemplation and precontemplation stages, Prochaska also identifies emotional arousal as an important factor in motivating change. By this he means what therapists call “catharsis”: powerful, intense emotions that inspire us to change habits that are not good for us.

An example of emotional arousal came for me when my soon-to-be-husband realized that I, an overspender, tended to rack up credit card debt. He said, “Honey, it doesn’t make sense to pay 18% on your credit card balance. If you can’t pay off your bill every month, let me know and we’ll deal with it.” By healing enough of the shame I felt at being an out-of-control spender, this caring, nonjudgmental intervention moved me and fueled my commitment to change. From that time on, I was able to pay off my credit cards monthly.

The question is why, as a fairly intelligent and math-adept person, did I need someone else’s words to persuade me to act sensibly? I think the answer is that I was at the contemplation stage, ready to take this issue on. His compassionate remark helped me turn a corner and prepare to change my habit of credit card overuse for good. I firmly believe that this intervention was crucial to my recovery so many years ago.

Empathy, warmth, and constructive input from others can obviously be very helpful during this phase. But emotional arousal may sometimes mean shocking a client out of complacency. An example would be an overweight person in denial whose doctor informs her that the extra pounds will shorten her life, or a smoker who sees an X-ray of his lungs. As a financial advisor, you might have to tell a client couple that unless they go on a tight budget and increase their savings, they will have to live on 30% of today’s income in retirement.

Faced with the overpowering necessity for change, clients may feel anxiety, regret, or deep sadness. These intense emotions may well provide the motivation they need, lighting a fire under their commitment to change and moving them to prepare for action.

Stage 3: Preparation

Emotional arousal and self-reevaluation continue in this phase, and commitment to action begins. The client acknowledges the existence of a problem that needs to be addressed and resolved. In the preparation stage, he or she is getting ready to do something about it, much as athletes visualize or rehearse a move in their heads before committing themselves to act.

A friend of mine recently decided that he was becoming a full-fledged sugar addict and needed to give up processed sugar and desserts, except for fruit. However, he wasn’t ready to embark on this plan for three weeks, when he would return from a long-awaited vacation. In the meantime he indulged himself fully, and began seeing himself giving up desserts upon his return. Three weeks later, just as planned, he moved into the action stage.

Another process of change that helps in preparation and later stages is what Prochaska calls “social liberation”–awareness and use of safe zones to control or limit a bad habit. Some examples might be choosing a restaurant with no-smoking rules (for a smoker) or using a credit card with a very low credit limit (for an overspender). These external aids let self-changers put themselves, at least part of the time, in situations that are conducive to change.

Stage 4: Action

This phase is the one that involves beginning a new behavior or eradicating a negative habit. It’s the busiest phase of all, because there are many processes of change at work.

For example, let’s go back to your client, the overspender. She likes to buy clothes in stores and via mail-order catalogues. Many of her purchases are on Tuesdays and Thursdays, when she has some free time and is not far from her favorite store, Chico’s.

What healthier “countering activities” could she substitute for this behavior? Instead of shopping, maybe she could find an absorbing hobby to practice at home, meet a friend for lunch or tea, or take an exercise class or a continuing education course to fill the time.

You could also suggest that your client exercise environment control, or what I call “avoiding slippery places.” For instance, she could cut up her Chico’s membership rewards card or cancel some or all of her catalogues.

This new behavior is bound to be difficult, and it’s helpful for clients to reward themselves for sticking to it. Ask them to come up with a reward that works for them. It needs to be something that doesn’t undermine their progress (which rules out a clothes-shopping expedition as a reward for avoiding Chico’s for a week).

In this action phase, as well as the maintenance phase that follows it, commitment is essential to sustain the process of change. Helping relationships can be very beneficial, although that doesn’t necessarily mean the client needs a therapist. Free 12-step programs like Debtors Anonymous can be effective. So can money mentors. Ideally, you should be on that list, along with good friends who can help the client stay out of slippery places and reinforce positive behavior.

Stage 5: Maintenance

In this stage the self-changer has begun to institute new, healthier behavior. Now he or she needs to learn how to maintain this desirable change.

For many clients, this will entail regular consultations with you to ensure that they are still moving toward their goals. Other reinforcing techniques will vary with the need. For instance, a program for a now-recovering overspender might include weekly Debtors Anonymous meetings and coaching, counseling, or therapy to explore more deeply the roots of the problem. She might put a photo of a dream retirement destination in her wallet to remind herself why she is brown-bagging her lunch, or avoiding the Clinique makeup counter, or for a male overspender, avoiding Brookstone or Best Buy.

When my friend gave up desserts, periodic check-ins with the nutritionist who helped him take the plunge were crucial in sustaining his commitment to change. With her help, he was able to find substitute snacks to satisfy his sweet tooth. His wife’s constant encouragement about kicking the sugar habit helped a lot. So did staying away from the pastry shop where he used to buy a snack every afternoon.

Stage 6: Termination

Not everyone reaches this final stage, which occurs only when the change has been so deeply incorporated into one’s life that it can be maintained without vigilant work. At that point, it isn’t “change” any more–it’s part of normal behavior. A consummation devoutly to be wished!

“Recycling,” Not Relapsing

Prochaska suggests that when people initiate change and then slip back, “recycle” would be a better term to use than “relapse.” That’s because self-changers who backslide do not in fact slip all the way back to precontemplation and denial. Instead, they cycle back to contemplation or preparation, then start through the remaining stages of change again. This time they may be equipped with some new tricks or tools, or at least a renewed commitment to move toward their desired goal.

To conclude the overspender example, suppose that after several weeks of successful behavior change, your client confesses to you that while waiting for a delayed flight, she wandered into an airport gift shop and impulsively bought an expensive scarf for herself. All is not lost. In fact, this “slip” may recycle her into more intense preparation and recommitment. To heighten her awareness and reinforce her willpower, you might suggest that she keep a spending diary to track what she spends her money on and how she feels about it.

Why is Prochaska’s work so valuable? After 30 years as a therapist and more recently a coach, I love the way this simple system provides a road map for change that anyone can use. Designing interventions around these processes–consciousness-raising, social liberation, emotional arousal, self-reevaluation, commitment, countering, environment control, and helping relationships–can promote change when used at the right time.

If clients are in denial about the negative effects of some aspect of their behavior, remember that they may actually be in the first stage of change–precontemplation. Their initial resistance doesn’t mean the task is hopeless. My clinical experience tells me that people who need to change are often weighted down with shame, defensiveness, self-deprecation, fear, or anxiety. Prodding them into action too soon will not effect change. They won’t really move forward until their emotional burden is lightened through consciousness-raising, self-reevaluation, and catharsis.

The chances of success are heightened when you help clients gain awareness of the cost-benefit ratio of their actions in the early stages of change, and avoid suggesting behavioral improvements until they are in the preparation or action stage. With your thoughtful assistance and support, they may be able to move more smoothly into contemplation, preparation, action, and maintenance–and perhaps eventually into termination, when the new habit is so deeply ingrained that maintenance is no longer necessary. This understanding of how people change and how you can facilitate the process may be one of the most valuable ways to increase your effectiveness as an advisor.

Olivia Mellan, a speaker, coach, and business consultant, is the author with Sherry Christie of The Advisor’s Guide to Money Psychology, available through www.investmentadvisor.com. You can e-mail Olivia at om@moneyharmony.com.