Common cents

Local experts give their tips for how to manage finances, organization through these tough economic times
By: Gus Thomson, Journal staff writer
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It was swept aside during the pre-housing bubble, pre-recession, boom days of the early 2000s when housing prices were escalating and jobs were plentiful in Placer County.
But many people are now taking a hard look at their personal financial footing and anticipating some slippery times ahead.
With unemployment rising around the nation, housing prices continuing to sink and a certain amount of pessimism creeping into the national psyche, local experts whose job it is to find ways for people to flourish have some answers to help keep families afloat during the current recession.

Contain debt
Shelly Fletcher, an Auburn resident who owns an organizing service for home, office and life, said one of the simplest things anyone can do to help keep their finances on track in tough times is to organize their bill paying by containing it.
By “containing,” Fletcher means keeping a running list each month of all the bills you’re going to have and, as you pay them, check them off.
“Near the end of the month, with only a few dollars in your checking account and seeing that you haven’t paid the mortgage, you can analyze how much you need to spend on food, as well as other needs and wants, to get you through the month,” she said.
An Auburn resident since 1979, Fletcher has been a professional organizer since retirement from a 20-year career with the Placer County CEO’s office.
As well as Details by Shelly Fletcher, she teaches courses on organizing through the Placer School for Adults.
The next one starts Feb. 28.
Fletcher said one important thing to consider during a down economic time is to separate your needs from your wants.
“Make a list of all the stuff in your life that you ‘need’ versus what you ‘want,’” Fletcher said. “Keep the ‘needs’ and focus on ways to reduce the ‘wants.’”
Every time you start to make a purchase, make a habit of thinking about the list, she said.

Pay cash, save
Brian Mishler, financial adviser with Edward Jones in Auburn, said that from an investor point of view, the current stock market calls for developing a diversified portfolio. Depending on a person’s needs, that could include gold or mining stocks and fixed annuities as well as the more traditional stock and bond offerings.
Mishler said that even as a child, he’s been a proponent of saving money.
Newly married in the early 1980s, Mishler recalled the 16-inch black-and-white TV that sat on a cardboard box covered with a tablecloth in his living room.
“We began our lives together debt free and as we started out, we paid cash,” Mishler said.
Avoiding debt is also important.
“If you understand interest, you’ll earn it, not pay it,” Mishler said. “I’m a big proponent of paying cash, even for cars.”
The only thing Mishler said he thinks people should have a loan for is a house, which he points out earns an interest rate tax deduction from the IRS.
With a minimal debt load, Mishler advises saving 10 percent of what you make and also building up a cash reserve so if you lose your job, you’ll have an emergency supply of funding until you find another one.
“It’s nothing fancy,” Mishler said. “If people do that, even as we cycle through difficult times, they’ll be all right.”

Understanding risks
Knowing your capacity for risk is a key to investing what you have earned or saved, said Kent Suemnicht, a financial consultant with Thrivent Financial for Lutherans’ Sierra Foothills Group in Auburn.
“The first thing we advise is to know and understand your tolerance for risk,” Suemnicht said.
Another important factor is a person’s investment time horizon. Investors who are retired or closer to retirement have different risk factors than younger investors just starting out, he said.
A third key in today’s investment atmosphere is to rebalance a portfolio as market conditions warrant, Suemnicht said.
Suemnicht, a financial consultant for a quarter of a century, said that an early start in investing for the future can provide a good start to financial security later in life.
“Even if it’s just a little bit that’s put aside,” he said. “You don’t have to have hundreds of millions.”
To get to that point where savings can be invested can mean doing things like price shopping for consumer goods and discretionary items like televisions and cars, he said.
“For smaller items you can watch the sales and take advantage of buying in larger quantities,” he said.
The Journal’s Gus Thomson can be reached at