The recession has prompted the University of Maryland's Cooperative Extension Service to launch a program to help people make ends meet.
While extension agents have long helped families on tight budgets cope with living expenses, they are now dealing with people who have lost their jobs and are in danger of losing their houses and cars, said Dr. Mary Stephenson, family resource management specialist.
She said the program is an outgrowth of requests by companies like Westinghouse Electric Corp. asking the service to set up programs for workers being laid off.
Posters for "Living on a Reduced Income" are being placed in unemployment offices, social services agencies and other sites where people most in need are likely to see them. The posters have tear-off forms that allow people to signal their interest in financial management classes or individual financial counseling, to order fact sheets and bulletins, and to subscribe to a new six-part newsletter. The newsletter series about how to live on less money is written by Stephenson.
Joanne Hamilton, extension agent for Anne Arundel County, said the effects of the recession are all too apparent at her Glen Burnie office.
"It's tripled in the last three months. It's been a dramatic change," she said. "It's 'I've received a second foreclosure notice -- what do I do? Can they really repossess my car?' " Young people especially, she said, don't realize that, even if they agree to a voluntary repossession of their automobile, they're still responsible for the difference if the car is sold for less than the amount they owe on it.
Unionized workers who lose their jobs have a real problem adjusting, Hamilton said, when they replace their $36,000 job with a $16,000 non-union one, particularly one without benefits. Then they find that the health-care coverage they had taken for granted will cost them $300 to $600 a month.
And families with teen-agers have a particularly hard time, she added.
Jean-Marie Holly, extension agent for Baltimore County, said her office also is experiencing an upsurge.
"We're seeing an increased number of requests for financial counseling; we offer free, confidential one-on-one counseling," she said. "There's been a lot more increase in the eastern part of the county where there have been layoffs in the manufacturing plants."
A major reason that a job loss becomes catastrophic, both agents said, is that people have inadequate savings to begin with and, thus, have no cushion.
"The big problem is these people are very close to the edge to begin with," said Hamilton. "Every family needs to sit back and say, 'Do I have three to six months of emergency funds?' " People just don't have adequate savings. They don't use credit wisely."
The problem, she added, can cut across all income levels.
"I've seen families with $450,000 houses and families with $40,000 houses," she commented.
"It's a change in lifestyle," Holly observed, "when you're used to living on two incomes and when your mortgage is based on two incomes and your car payment is based on two incomes."
Both Hamilton and Holly said that compounding the lack of savings is that many people don't track their expenses.
"Most people have no idea where they spend their money," Hamilton said. "A big leak in family funds is unaccounted-for cash. People use ATMs [automatic teller machines] like water."
"People just don't realize what they're spending," said Holly. "We had one family with four children that said they spend $100 a month for food. And we said, 'Are you sure that's all you spend?' "
Among military families -- a large group in Anne Arundel -- telephone bills can be a major expense, Hamilton said.
"You get a collect call from Saudi Arabia and what are you going to say, 'No, I won't accept the charges'?" she said. "And the military is downsizing. Fort Meade is one of those areas scheduled for downsizing. Everyone's out looking [for jobs]."
While sticking one's head in the sand is the worst thing to do in a financial crisis, it's a common response.
"Sixty to 70 percent of the people who lose their jobs make no adjustments. They think another job will turn up. . . . One couple just threw their bills in the trash -- unopened," Hamilton said. And only half of those who seek help from the Extension Service end up taking the advice, she said.
The first order of business after a job loss, Hamilton said, is to put total brakes on spending.
Holly advised people to figure out just how much debt they have and to contact the creditors before they get behind in payments. They also should make sure to use all available resources, such as unemployment compensation.
Whether a creditor will agree to a reduced-payment schedule, she said, often depends on the person's credit record.
What's really needed, stressed Hamilton, is an overall strategy, not a shotgun approach.
"We're an instant-pudding society; we want instant answers," she noted.