CAMBRIDGE CREDIT COUNSELING CORP. ANNOUNCES SEMINAR SERIES, LEARNING TO RUN THE BUSINESS CALLED YOUR LIFE

New financial literacy seminars focus on preparing for economic challenges in 2009.

The year 2008 will likely go down in history as one of the most financially trying in generations. Over the last twelve months, Americans have seen dramatic increases in foreclosure and jobless rates, the erosion of pension plans and retirement savings, and a government opting for unprecedented remedies to prevent further damage. Unfortunately, 2009 looks as if it will be just as challenging. In an effort to provide critical financial education on both the local and national scale, Cambridge Credit Counseling Corp. will hold a series of seminars to help people better prepare themselves and their families to meet the difficulties they may face in the coming year.

On January 15, 2009, Cambridge will hold the first installment in this year's series -- Learning to Run the Business Called Your Life. Part one will focus on developing strategic plans to ensure long-term financial success. Among the topics discussed will be creating a practical spending plan, establishing an adequate emergency savings fund, and eliminating debt.

“Decreased access to credit, a struggling job market and the prospect of a worsening economy means that we all have to develop a more aggressive strategy toward our finances,” warns Christopher Viale, President of Cambridge Credit Counseling Corp. “If we’ve learned anything from 2008, it’s that a lifestyle built on credit, and not savings, can be disastrous. We owe it to ourselves and our families to adopt a new philosophy in 2009.”

All seminars are offered for free to the public and will be held at Cambridge’s offices, located at 67 Hunt Street, Agawam, MA. Each session is scheduled to run from 5:30 - 7:00 PM, and a full listing of dates is available on Cambridge’s website, www.goodpayer.com. The organization understands that it may be geographically impossible for everyone interested to attend, so a PowerPoint presentation, complete with speaker notes, will also be available for download the day after each seminar. Families, community groups, and educational institutions are encouraged to use the information provided. For more information about Cambridge's seminars, please call the agency’s Director of Education, Martin Lynch, at 413-241-2401.

Saving: The Worst Thing an American Could Do?

by Thom Fox
Community Outreach Coordinator
Cambridge Credit Counseling Corp.

Many investors were excited in September by the news that the Federal Reserve had cut interest rates; however, average Americans may not fully realize the impact these cuts may have on their wallet. There will be some winners – some homeowners with adjustable rate mortgages, for example, but there will be losers as well - those with Certificates of Deposits and traditional savings accounts.

Interest rate cuts not only affect the amount a consumer is charged to borrow money, they also tempt people to go out and make additional charges, reducing any inclination they may have had to actually start saving money. Our national savings rate is negative 1%, meaning that we’re consuming more than we earn. In light of this fact, these cuts do little to promote the establishment of healthy savings.

Americans used to save nearly 10% of their income every year, but that mark fell into the negatives two years ago. Why? A major factor is the amount the average consumer spends servicing credit card debt, roughly 11% of their disposable income. In looking at the move the Federal Reserve has made, essentially soliciting consumers to get further into debt, one wonders - will a focus ever be put on savings?

When a person is committed to establishing savings, they become more disciplined with their money. That commitment promotes a realistic attitude toward finances that helps individuals live within their means and not beyond them.

At one time in America, a homebuyer couldn’t get a mortgage without a significant down payment, traditionally 20%. In recent years, however, mortgage companies began offering 100%, or even 110% financing. In the absence of the 20% requirement, prospective homebuyers quickly got out of the habit of saving, and now many struggle to save even a minimum down payment of 5%. For an average home worth $250,000, for example, a 5% down payment would require a deposit of $12,500. But even that modest figure would be beyond the reach of Americans whose savings mentality eroded during the years of easy credit.

Placing an emphasis on savings could have prevented the turmoil facing the American markets today. If consumers understood that building savings is a necessary component of the American Dream, more people would take it seriously, and they’d be able to avoid the predatory practices of disingenuous lenders looking to profit at their expense.