Missoula financial experts say being proactive about your debt load is the best way to navigate a recession and ensure your own fiscal health.
“The biggest thing a person can do for themselves right now is to meet their financial challenges head on,” said Adam McQuiston, First Security Bank market president. “This is not the time to bury your head in the sand.”
The first rule of thumb? Get financial counseling.
Western Montana bankers and lenders are experts in this department, and they are happy to share their advice for free. That's why you bank where you do, and that's their job.
Take advantage of those services, McQuiston said.
Bankers and lenders aren't the only professionals to turn to; there's also Consumer Credit Counseling Services of Montana.
The nonprofit CCCS of MT is headquartered in Great Falls, but has as a branch office in Missoula at 1515 Fairview Ave. near the Montana Club, just off Brooks Street.
As the name implies, CCCS helps people who are burdened by debt, who have money issues and who are in credit crises. They also advise people who are just looking for savvy budgeting pointers.
What should first-time clients expect?
“We go over their complete budget and look at a person's income and monthly outflow without debt,” said Greg Harper, CCCS counselor. “We take a look at cash flow, and we determine is their monthly income meeting their needs? And we give recommendations on where to go - and answer the question: ‘Where do we go from here?' ”
Foreclosure prevention and credit card management is their speciality, Harper said. In distressed times, CCCS can help clients negotiate with their lenders for a lower interest rate on loans.
“We can help people by providing a good action plan with recommendations, and because of who we are, we provide unbiased third-party help,” Harper said. “People are starting to reach out to debt settlement companies that are out of state before they reach out locally.
“Many of those companies are services people are paying for, and we do the same things here - and more - for free.”
As these uncertain economic times continue to unfold, the smart thing to do is to create a conservative, realistic monthly budget - and stick to it, McQuiston and Harper said.
While you're at it, here are a few other things to consider:
Your credit history is vital to your fiscal health and your future, said Max Good, owner of Rocky Mountain Financial Advisors. Therefore, don't be late on your monthly minimum credit card payments.
Work diligently to eliminate your credit card debt.
If possible, get rid of your credit cards, Good said, because most credit card charges are discretionary purchases - things that are not critical to keeping a roof over your head or food on the table.
“We are in a ‘right now' society where we want everything that mom and dad have,” Good said. “But we forget mom and dad worked 40 years to own that house and drive that nice car.
“Younger people have gotten those things right away through debt and the horrible consequences we are seeing today make you realize how smart mom and dad were. When they couldn't afford it, they didn't buy it.”
Worried about layoffs? Worried about bills piling up?
Generation after generation, the same advice is given, Good said. Whether it works or not is up to each individual.
Save money, Good said. Diligently sock it away so there's cash on hand if a person needs it, and so there's something to fall back on. A good rule of thumb, he said, is to have enough in your savings to pay your expenses for three to six months, should you lose your job or become unable to work.
People don't like the notion of having to tighten their belts, but getting rid of small luxuries - daily habits we've grown accustomed to, such as cable television, that mocha latte or a morning pastry stop - is an easy way to fatten your wallet.
In this day and age, belt tightening should be fashionable.
“There's all sorts of things where we let money slip through our fingers,” he said. “Like going out for lunch every day. Take a sack lunch a few days.
“If we went back through our budget, we all could find places to save $5 here and $7 there - and all those dollars add up.”
Reporter Betsy Cohen can be reached at 523-5253 or at bcohen@missoulian.com.
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