Money Coach Suggests a Check-up for Your Checkbook

Money Coach Alvin Hall recommends a yearly check-up on your financial health. He says spring is a good time to get real with your bank balance.

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MARTIN: We want to turn now to more personal matters. Tell Me More is turning one this week, and as we mark this milestone, we thought it would be a good time for a checkup. A financial check up, that is. Who better to do that, than our money coach Alvin Hall, who is actually here with me in our studio in Washington. Welcome.

Mr. ALVIN HALL (Money Coach): Thank you, I am very glad to be here today.

MARTIN: So what should people be doing for? You know, we all about the concept of an annual physical. Should people have a financial physical once a year?

Mr. HALL: Absolutely. Typically, I would recommend that people do this in September. But what better time, if you don't do it in September, than to do it in the spring? A sort of spring cleaning of your finances and there are two key words I want people to keep in mind. Plan and prioritize. We all know that the summer is coming up. We all know the sales are gonna be there. Kids are wanting to go on vacation. They will be out of school. Now it is time to sit time and think, what are the long term things that I need to buy for the house, could it be a car, an appliance? The children are going to be out of school. What will they be doing? What activities do I need to budget for now? Are we taking a family holiday this summer? How am I going to pay for that? Plan and prioritize and you can make your summer a lot easier.

MARTIN: When you say, that you generally say this should happen in September. Why September?

Mr. HALL: Uh, December. I may have said - I meant December. At the end of the year. I would say it is good to do it at the end of the year because that is when you are really looking back over your finances. One of the things I encourage people to do, Michel, is to write a personal annual report. Look back over your life for the past 12 months to see what you have done well and what you have done badly. And therefore, you can start putting into place some corrective activities. Also, spring is a good time, especially given the financial condition now in the world, to look at your finances. If you are in too much debt, come with the plan to start paying down that debt. If you have a 401K plan or if you have a retirement plan, it's time to sit down and maybe rebalance that. Become a little bit more conservative as we go through this period of uncertain economics.

MARTIN: And a lot of people will have just gotten kind of their first quarterly statements.

Mr. HALL: Like me.

MARTIN: And opening them and not happy with that they are seeing. What kinds of documents should you gather for this annual financial check up?

Mr. HALL: You should look at your will. That is the first thing. You should absolutely look at your will. Because you need to think what has changed in my life during the past 12 months that may be affected by my will. Some people often leave fixed amounts of money to people. I am a real big fan of leaving percentages to people of your wealth or the money that you have because then you don't have to adjust the will every single year. But start with the will. Look at life insurance. Maybe the value of your income has gone up, or you've married or there is another child in your life. Start planning for that. Also, look at where you want to go, and when you want to retire. Start thinking about how have my investments performed over this period of time? Am I on the road to my retirement and my financial dreams?

MARTIN: You know another good reason to do this in the spring is that your financial planner, your tax adviser is taking that post-tax-filing pause.

Mr. HALL: That's right.

MARTIN: So you might get more of his or her attention. Speaking of taxes, are there some steps you should be taking now, sort of thinking ahead to the next year, particularly if you did not like what happened last year. File that piece of paper. I am telling you all that business.

(Soundbite of laughter).

Mr. HALL: I think about that all the time. No, I actually tell everybody that you should plan out the things you want to give. If you are making gifts to people or you are making gifts to a charitable organization, plan those out now, so you can see the effect of them. In my case, as I think I have said on the show in the past, I give away art. So I start doing that in the spring, sort of contacting institutions if I want to give away some furniture. Maybe they want those types of things. You plan all of that now, so you can see the impact on your taxes in December.

MARTIN: Is there anything you can tell us, Alvin, or help people who are just phobic about this stuff who just don't like dealing with it.

Mr. HALL: Follow the off-the-road line. Simplify, simplify, simplify to paraphrase it. You really just need to focus on what areas of your finance that are important to you. If you are out there now looking to buy a house, focus on the mortgage. If you have too much debt, focus on paying off the debt, and make that a priority. Don't go wild in the other areas, but be restrained. And I think that people often, when they think of finance, they think they have to understand economics, they have to understand trigonometry. Right. All of this sort of stuff. You don't. It's learn on an as-needed basis. What you need to learn today, learn it and then move on to the next thing.

MARTIN: Which is why we have you.

Mr. HALL: Thank you.

MARTIN: We are so glad you came to see us.

Mr. HALL: I am so glad to be here.

MARTIN: Will you come back and see us some time?

Mr. HALL: Anytime. In the spring, I will be back.

MARTIN: Alright, our financial expert, Alvin Hall. He joined us in our studio in Washington. Alvin, thank you for being part of the program over this past year.

Mr. HALL: I have enjoyed it, it has been really wonderful.

MARTIN: And we look forward to seeing more of you in the future.

Mr. HALL: Thank you.

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