by Dale Chappell

Created on: October 02, 2008   Last Updated: October 08, 2008

Just like settling in for a long winter, Vermont residents prepare for the economic slowdown by tightening their belts and stoking the fireplace. As the federal government continues to act and implement a solution to the credit crisis, the working people of Vermont can prepare for the cold financial market. Already seeing a decline in tourism, commercial real estate, home sales, contracting, and new residential construction, Vermonters are faced with either putting off key financial decisions or taking a loss.

As the fallout from Wall Street reaches the main streets of Vermont, small businesses and the average family will likely carry the burden of the federal government's response. Despite the uncertainty of retirement plans and property values, the credit market's failures will trickle down, making the purchase of new vehicles, homes, and equipment nearly impossible for anyone without near perfect credit.

This hobbled credit market will also challenge the needs of many small businesses. As payrolls become more difficult to meet, layoffs will occur, production will decline, and purchasing of materials from neighboring vendors will slow.

Like a snowflake starting an avalanche, one neighbor's financial difficulties can inadvertently affect a community. The construction company forced to layoff skilled workers can not only lead to adverse effects of it's suppliers, but also to the industries that transport, manufacture, and maintain the individual elements needed to build an economy, yet alone a home.

As real estate values decline and home sales slow, foreclosures and bank repossessions further dampen local real estate markets. Although a buyers market, the credit crunch makes financing a home nearly impossible without large down payments, often needing closing costs to include points, and at an interest rate that creeps up almost daily. From the sellers perspective, many communities are still suffering the falsely inflated real estate market values that were associated with the ease of obtaining home financing that led to this current financial crisis.

As neighboring states also face these same market issues, Vermont's tourism industry must also brace for a slow down. Gas prices and tightened budgets will likely lead to difficult choices for the average consumer. Holiday spending will be weighed against recreational activities, with the outcome resulting in a disappointing short-term failure in meeting the expectations of both the tourism and retail industries. Thrifty consumers will shop for the deep discounts and packaged vacations that offer values similar to the personal financial situations faced by the reduced spending power of the average consumer.

Should the financial market escape the grips of a recession, yet alone a depression, the lessons learned will still change the ways many Vermonters look at options and financial situations. Time will be needed to repair Wall Street's poor choices. Family's retirement programs have and will continue to take a hit, but those too will eventually settle back into a steady growth pattern. The finest investment an individual can make right now is in a good set of tools. This way we can be sure we are prepared to mend the breaks that occur in our cars, homes, and communities.

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