Vicki Gunvalson, president and founder of Coto Insurance & Financial Services and spokesperson for Debt.com, joined Cheddar News to give recession advice.

Vicki Gunvalson, president and founder of Coto Insurance &amp; Financial Services and Debt.com spokesperson, joined Cheddar News to give recession advice.

Financial Steps You Could Take Today to Prep for a Recession

we've heard it over and over again, a recession is looming if we're not in one already and with persistent inflation, higher prices, making everything more expensive americans are now going into record debt just to get by credit card balances, jumping 15% in the third quarter, the biggest year over year increase that we've seen in more than two decades. And joining me now is Vicki Gun Wilson, president and founder of Coto Insurance and Financial Services and spokesperson for det dot com. Vicky thanks so much for coming on the show today. Um look, it's a big topic of conversation, especially around the holidays and so what are your top tips to bring down debt for consumers? Yeah, it's a really difficult time for a lot of people and I've been seeing debt increasing just even with my clients. And so what we try to do is just the old saying is, you know, make more and spend less and you should be okay. The problem is people have lost their jobs. People have had to get the credit card debt, borrow money from their homes just to live the lifestyle that they've been used for living. So Um we might have to downsize our homes. Actually. I did that last year. It was a difficult task but I did it. Um I'm all about saving for the unknown, preparing for the unknown which could be health issues or loss of job. We used to say 3-6 months in your savings account for the unforeseen. And now we're saying, you know, experts and ourselves are saying, let's look at 12 months, how do we do that more barely, you know, keeping afloat. So there are some tools that we can do through debt dot com forward slash wiki and a lot of its debt consolidation, maybe transferring some balances to a lower credit card interest rate. Um, taking, you know, taking personal loan, consolidating, stop spending on things that you don't need. Um My dad always used to tell me, you know, do that or else you're going to have to sell things that you need just to get by and we don't want that to have to happen. But we do see, not only, you know, working in the insurance industry, but I get people prepared for retirement. So in that model we have to see, you know, do you have a lot of debt? Can you stop working at 62 to 66? I don't, I don't know, but that is a big deal for a lot of people. We're not saving enough for retirement. You know, it's just, you know, you've got to have those tools in place and unfortunate enough to be in the city for 32 years. We've, we've seen the recession, we've seen the stock micro copa, we've seen a co town. So you know that's a big deal. Okay, so let's talk this. I mean clearly in the third quarter we did see credit card debt balloon. We also saw GDP growth the strongest in that quarter that we've seen throughout the entire year. But the concern is that more layoffs might be on the horizon, the stock market might fall further. That could lead to more layoffs at companies across the board. And so what should consumers be prepared for Vicky? It might be bad now. How much worse could it get? Well, I think you can get a lot worse and unfortunately a lot of people are thinking that we're out of this, we're not out of this. You know, credit card data, she mentions up, it's over $930 billion and that's huge and some people are paying 20 to 25 to 30% interest and they're only paying the minimum just so they don't ruin the credit card. So what they can do now is stop spending, don't worry about christmas, christmas and the holidays should be about spending time with your family, if you can't afford it, don't buy it. Um if you get gifts, you don't want to see if you can take it back for cash, put that cash in a savings account, uh, don't re spend it on something else you don't need. Uh you know, the Ebay is popular nowadays, a lot of my clients are selling things on Ebay because they can get immediate cash for things that they're not using. Um dot dot com is super qualified to talk to, people were able to consolidate that and that's why I've partnered with them is because there is a need for this in the world really to, to consolidate and stop spending, teaching people how to be responsible with money. And I think that's what's happened. We've had, you know, low inflation, we've had people just making money in these bitcoins and cryptocurrencies and they just spend, spend, spend and now everything is starting to go down and they're not used to being on a budget. I'm a big budget. Er I budget everything I do. If it's not my budget, I don't do it. So that's a big deal. We have this grateful screen Vicky the average consumer debt across categories credit cards, mortgages. I hope we can pull it up here and we can walk through some of these numbers. So the debt type household debt averaging 96,000 mortgage, 231,000 auto loan, 21,000 credit card. About 6500. When it comes to paying down these different types of debt, what should get priority? Well, the ones with the highest interest rate, I mean I can't believe that you're saying only $6500 on credit card, we're seeing it much higher in California here but I know across the country it's more than 6500 that might be on one credit card, but multiple credit cards is what people are having. So pay down the highest interest first, then you start chipping away and everything else. If your mortgage is a low interest rate of 2-3%, which is what it was the last 10 years. Um Keep that where it's at. I'm not a big believer of dipping into your equity in your homes to start paying off debt. Um But sometimes we might have to do that so and then consolidate. But you know our team can help figuring out what's the first one to tackle first for me. I don't have credit cards, I pay it off every month. I don't charge more than I have and that keeps me in line with what I have to do Vicky. My final question here is, I know you mentioned the importance of setting up a budget that that budget should guide you in the financial decisions that you make. How do you go about creating a solid budget that will work for you? Yeah. Well Excel spreadsheets are great. Just a pad of paper are great. What is your monthly bills every single month? You're consistent ones, your auto payment, your mortgage, your utilities, what's the average over the 12 months, then you do another column. What's your income? And if your income is less than what your budget is, you got a problem. Therefore you're not going to start charging. So you gotta start chipping away at the at the expenses that you don't need to. You know, you're gonna have to pay your car payment, your insurance, things like that, your health insurance, but the other things such as going out to eat, um, I cook more than I have before because I work all day, I cook meals for two or three times. I bring it to work. I have it for lunch and dinner. I mean going out is a big deal that is very expensive. The dining experience has gone down. I think the quality of foods gone down and the expenses are up just for these restaurants to stay in business. So maybe one or two days a week I'll do lunch out or dinner out. But the rest of the time I'm cooking, so making soups and making casseroles, all of those yummy things that make us feel good, especially in these winter months for those of us who do not have California weather, that's for sure. Vicky Gun Wilson, president and founder of Coto Insurance and Financial services and spokesperson for det dot com. Vicky thanks so much