Dealing with debt: Counseling helps manage money smartly
Many Sonoma County residents are entering 2021 facing what may be the most perilous assault on their personal finances that they will ever see in their lifetimes.
Nine months ago, the sharpest economic collapse in modern American history flattened entire industries, and every day since has been an unrelenting financial nightmare for many.
Which bills do I have to pay this month? Will my lender work with me? What about my landlord? Can we make it if I stay home to oversee our children in online classes? Should I tap into my retirement savings? Should I refinance? How am I ever going to pay back the money I borrowed from my family? When will this ever end?
“You are not alone. There are answers. We can help,” says Kathy Kane, assistant director of the Community Action Partnership of Sonoma County, which offers and urges financial counseling for its clients.
She echoes a message from a number of agencies and credit counselors who are helping Sonoma County households develop budgets to navigate the financial minefields strewed by the pandemic.
Uncertain months stretch out ahead. But 2020 is receding into the past, and 2021 will surely be better. Credit counseling and a budget are the essential tools to get people down the home stretch, these experts insist.
This downturn was three times worse than any drop since the Commerce Department began tracking gross domestic product in 1947. It’s normal to be stricken with fear. Don’t hesitate to seek financial advice, counselors urge.
A growing number seem to be listening.
“Due to COVID-19 we have people accessing services that have never accessed services before. It’s a whole new world right now,” said Amy Holter, director of Catholic Charities’ Integrative Programs, which include financial counseling and education.
Adela Gomez is thankful she spotted the value of credit counseling before the pandemic hit.
“My savings and financial skills, acquired thanks to Catholic Charities’ courses and services, made a big difference in my family budget and the outcome of my family’s future in the middle of this pandemic,” said Gomez, who participates in the Financial Stability Services program offered by Catholic Charities.
The Windsor mother of three children ages 16, 13 and 4 graduated in August with the Curso de Empoderamiento Financiero certificate, or Course of Financial Empowerment. It’s just the most recent of several services she has used through the Financial Stability Services program. And it’s not going to be the last.
“I feel so much joy,” she said.
She wants to keep “taking as many classes as I can,” she said in an interview through a translator.
Gomez is a part-time dishwasher, seasonal farmworker and full-time homemaker. Her husband has been an agricultural worker for more than 16 years. When she heard about the Catholic Charities programs, through Facebook and srcharities.org/financial, she saw a potential tool that might help her achieve her financial goals.
“My main long-term goal is that my children will be able to study and become a successful professional that will serve within our community,” Gomez said. “I hope my children will have a better opportunity to succeed in college free of debt, and I hope they will be financially fit in the future.”
That was the main reason she signed up for Catholic Charities’ financial services. Since 2018 she has studied budgeting and learned how to open a 529 college savings account, how to save and invest wisely, how to choose a bank according to her family-specific needs and more. Most valuable for her, she said, has been credit counseling and personalized financial coaching that, among other things, taught her how to save and invest.
Then came the pandemic and irregular employment.
“I have not to doubt that my emergency savings were a lifesaver for my family,” Gomez said.
Gomez said she wishes more people understood the value of financial training and “how important it is to be curious and investigate and ask for financial opportunities like the one my family and I took advantage of, so they can acquire the necessary knowledge to maintain a sustainable budget and be financially successful.”
Credit counselors often express the same wish. Too many people don’t want to talk about money, they say.
“It’s the last thing most people want to focus on. It’s surprising to me,” said Cynthia Riggs, a straight-talking Sebastopol business consultant known as the Biz Diva.
But not Rachel Ginis. When Ginis was laid off in May because of the pandemic, she wanted a thorough understanding of her finances. She wanted the facts.
“Despite earning six figures, I was unclear about the details of my financial future,” Ginis said. At 55 she wanted to know exactly what it was going to take to maintain her lifestyle and build the foundation for a stable and secure retirement. “I needed to know where I stood, what I was doing and where I was going.”