Debt Advice

It is good to see that not every bank only see profit from debt. On the other side of the country, one bank see its long term viability of people having money and savings. They offer a free service to customers called Debt Savvy where they help people cut their expenses, live within their means, and save money. The bank realizes it can make a profit off of savings, rather than just debt. This innovative financial planning is discussed in the Bellingham (WA) Herald in an article titled Take Control of Your Finances. Lets take a look -

My No. 1 piece of financial advice in this economy is to take control of your finances: Examine your spending. Pay down your debt, however slowly. Set realistic financial goals. Take calculated risks.

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When home values and stocks were on the rise and unemployment was low, customers didn't have time to shore up their personal balance sheets between trips to the mall. Banks were focused on refinancing mortgages and opening home-equity lines of credit. Some financial planners - shudder to think - were advising clients to cash out home equity to invest in the stock market.

(Remember when that equity was your money and you could invest it better than having it sit in the house? Some do.)

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Thrivent Financial Bank, for example, recently trained all of its employees to be so-called "debt guides" for the bank's Debt Savvy program. The concept, tested in February 2008 and begun bankwide this year, is to analyze whether customers are in the right loans for their current situations.

Debt Savvy, which is free and available to the public, begins with a quiz. Thrivent's debt guides analyze the responses and make personalized recommendations. Guides explain how stretching out a loan to get the lowest payment will result in more money paid over time. They steer people with little willpower away from lines of credit toward loans with set terms.

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Wells Fargo's Debt Pay Down Solution, begun in December, is a program with a three-pronged strategy. First, customers consolidate debt through a personal loan. Then they look for ways to spend less using the online tool, My Spending Report with Budget Watch. If the online tool finds extra cash lying around, the customer is urged to apply it to the loan's principal.

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There is one place where getting out of debt is in vogue in every economic cycle. I'm talking about the financial counseling agencies whose business is to show clients the way out of hock. The good counselors out there aren't pushing pricey debt management plans. They're pushing realistic budgets.

This is a good article with good financial planning and management advice. Pay off your debts. Examine and reduce your spending. All simple techniques that do not take a lot of skill - but some personal analysis and reflection that did not occur during the bubble. Since money is not so free flowing to come our way, it is good to realize how it flows away from us. There are alot of little areas that can be cut without much impact.