Brian Betz from Money Mentors says being financially prepared is good practice in any economic circumstance
Financial counsellor Brian Betz has worked at Money Mentors for 13 years. Money Mentors is the only not-for-profit credit-counselling agency in Alberta, which through a number of services helps Calgarians with various financial problems.
In a recent phone interview with the Calgary Journal, Betz offered his perspective on the impacts of the recent slump in crude prices. Some parts of the Q & A have been edited for length and clarity.
In light of the recent oil downturn has there been an increase in the number of people seeking money management services at Money Mentors?
A. There’s always people who need our help and relative to the oil downturn, let’s just say that your job has been terminated with an oil company. At this point in time you have a transitional allowance, or some type of financial package that will probably tide you over for a while so we tend not to be seeing those types of individuals.
You’ve been working with Money Mentors for 13 years, how would you compare the number of clients seeking services compared to the 2008 recession?
Brian Betz, Financial advisor at Money Mentors
Photo courtesy of Money Mentors
A. Some people find themselves in a situation where they just need some help and we’ve always been there to help them. Even in 2008 there was no great spike.
What would you suggest to someone in the oil and gas sector, who has recently been terminated due to the downturn and has a transitional allowance?
A. So, I think the first thing they need to do is look at what their re-employment possibilities are. You know if the type of work they do is fairly specialized, it might be a while before you can get another job, then I think you have to be quite conservative with your funds.
Individuals might be looking at going back to school and say, “OK fine, I don’t want to stay in the oil industry. It’s too volatile for me. The long-term prospects in oil are up in the air. We might be dealing with this situation for quite some time.”
So they might decide that they are going for a re-training, re-employment situation.
The first thing to do is not to do anything. You want to really do some research on what your re-employment possibilities are, where you want to go in terms of your life. There are all sorts of financial options available to you, but, don’t do something in a rush. Think it through and seek out some advice on how you can proceed to maximize your transitional allowance.
Why do you think it’s so important for Calgarians to have a better understanding of their money?
A. We see it in the headlines almost everyday — the need for financial literacy. Approximately 50 per cent of wage earners live paycheque to paycheque, so I think that most people look at it like, “I’m okay. I’m able to make it to my next paycheque.” They don’t anticipate any issues, and then when they do experience financial difficulties, they don’t know how to handle it.{cbrelatedarticle show=”right” ids=”2666,2691,2678″ /}Just by understanding your financial affairs, you can make your money go a lot further.
Getting a financial education is fairly straightforward. It’s fairly simple, it doesn’t cost you anything and in essence it pays you in the long run. You are then much more knowledgeable and you can make some financial decisions that will pay you by extending your money.
Do you think the oil downturn will have as much impact on people as the last one in 2008?
A. I think it is so dependent on the commodity price of oil. I believe that it won’t be as bad. I think that our government is more prepared for it and while it affects a number of individuals, you know in terms of working for an oil company. I think a lot of companies are really trying to make it work to retain employees and they might be very flexible with how they do that.
I think the other factor here is that in 2008 it was a much greater economic crisis, relative to bank financing, the availability of credit. The magnitude of the crisis was more widespread. Here we have a situation where it’s really limited to the drop in the oil prices, and for most people it’s a good dose because you’re paying less at the pumps.
So, I think 2008 was much worse, much more widespread than we’ve got right now.
Read this Calgary Journal special report for an in-depth comparison between Jim Prentice’s response to the current drop in oil prices and Don Getty’s response in the 1980s.