The housing market is slumping, gas prices are soaring, and the financial sector is in disarray. Amid so many signs of an economic slowdown, how can the average consumer avoid its effects?

Stephen Brobeck, executive director of the Consumer Federation of America in Washington, has some suggestions. He was in Charlotte this month to speak at a savings seminar for Wachovia employees. The nonprofit federation worked with Wachovia to develop the seminar, which the bank is also offering to its corporate customers and their employees.

The Consumer Federation studies a wide range of concerns, including food safety, product safety, home mortgages and fuel efficiency. Brobeck talked with Charlotte Observer staff writer Christina Rexrode about a few of them. Questions and answers have been edited for length and clarity.

Q: What's the next big scam that people need to be aware of?

A: It's not a door-to-door salesman, it's not a telemarketer. People are pretty savvy about that. What people should be worried about is the economic slowdown, about carrying too much high-cost debt and not having enough savings. Consumer fallout from the mortgage mess has barely begun -- that is going to be what really clobbers millions of Americans.

Q: So the big money mistake that people make is ...?

A:People don't like to talk about their budget. But sit down -- with your spouse if you're married -- and have that conversation. People who have that conversation save twice as much.

What's really important is that people, when they're single or married without kids, they save, because people grossly underestimate the cost of having kids. Many college students graduate not just with credit card debt but with student loan debt. Their mentality is, "If you're short, you can borrow money." When I was your age, that wasn't an option.

Q: But aren't lenders getting stricter about extending credit?

A:Yes and no. People have borrowed $1 trillion on credit cards, but there's another $4 trillion that they could draw on. Some banks are trying to cut down on that, and I support that.

Q: What about tapping your home equity?

A:First, you have to understand that you're spending your savings. But if you have high credit card debt and you're paying a 25 to 30 percent penalty, then yes -- if you're not going to run up more credit card debt. If you tap your home equity, it shouldn't be for a vacation or a fancier car.

Over the past four years, housing values were increasing across the nation 4 or 5 percent [annually] -- that's unheardof. They're usually 2 to 4 percent. It was like the dot-com bubble -- people thought that was always going to continue.

Q: What if you can't make your house payment?

A:You ought to talk to your company that made the loan, of course, to let them know that you might have trouble making your payment. But you also need to see a reputable mortgage counselor, probably a nonprofit group. ... The [Federal Housing Administration] has approved a number of them. [North Carolina works with the national HOPE hot line, (888) 995-HOPE, to offer free counseling on preventing foreclosure.]

First, you may be in a situation where you can afford the payments if you just tighten your belt a little bit. The second situation is that you can't afford the payments, but your lender might adjust your loan. The big lenders tell us that's what they're doing.

Q: Really?

A:Nonprofit groups have been skeptical. But you ought to at least give it a chance. The lenders are not the only ones involved. Sometimes the investors don't want the lenders to make adjustments.

Third is if you haven't put anything into it -- if it's a zero down payment with the closing costs financed, which we've been highly critical of -- you ought to consider starting over, basically.

At some point there may be some federal assistance, but I wouldn't count on it.

Q: Now that interest rates are falling, are you recommending that people refinance their homes?

A:You really need to talk to an accountant or someone who can crunch the numbers for you. How long [are you] going to hold onto this mortgage? It's probably going to make sense if you're going to hold it for an appreciable amount of time.