Money Coach Offers Tips for Moms
MICHEL MARTIN, host:
We're going to shift our focus now to financial education for moms. Many women are their families' chief financial officers on top of every thing else they do, but are they taking care of themselves as well as everybody else in this critical area? So as we prepare to celebrate Mother's Day this Sunday we thought, what financial advice to moms need? Here to school us on these matters is our financial expert Alvin Hall. Welcome. You're in London I take it.
Mr. HALL: (Money Coach) I'm in London, in the middle of my production office here in London.
Mr. HALL: Happy Mother's Day to you.
MARTIN: Well, thank you so.
Mr. HALL: You have twins, right?
MARTIN: Yes, I do.
Mr. HALL: Good!
MARTIN: Is it in your experience as a, sort of, financial advisor and as an educator that many women hand over financial issues to the men in their lives?
Mr. HALL: I think, yes.
MARTIN: And not to get into people's business, is that a mistake?
Mr. HALL: It is a huge mistake. And a lot of women do it because there has been a re-emergence, it seems, in society of the fact that a lot of women feel they want to be taken care of. They want the husband to be the major decision maker about the money, they want to raise the kids and just abdicate all that responsibility. And that is totally wrong if you're in a relationship.
Communication is key because what happens if your husband drops dead? What happens if your husband develops a gambling problem? Which is what happened to a friend of mine. Her husband developed this problem. He was hiding it all those years. And when he finally decided to leave, she discovered that there was no equity in the house because he was pulling money out of the house to support this gambling habit.
MARTIN: What is the minimum that a person in a committed relationship should keep his or her hand in. Because many, you know, couples - whether they're same sex couples or whatever - you know, people tend to divide up the tasks of the household. So what is the minimum you should try to keep your hand in, assuming there is a trusting relationship?
Mr. HALL: Exactly. Four things: One, the flow of the money month-to-month out of a central checking account. You need to know what both parties are spending on, what your spouse is spending on, so you can track what's going on and where if they're going off the deep end. Two, you need to be aware of how much money is being put into the 401(k) program or any other retirement program, because more than likely as a spouse you're the chief beneficiary to that program. So you need to know how it's progressing and to make sure the person hasn't suspended payments into that.
Three, you need to make sure that there is a policy on the house. If you have a mortgage then you should have mortgage insurance in case one of the parties dies, so that the other one is not left struggling to make the mortgage payment. And then, finally, the will. You must make sure there is a will in place. Too many spouses who are in love and still think they're immortal never put a will in place. They die, and then it takes forever to the estate to be solved.
MARTIN: And I assume that you should be sure you're signing those taxes?
Mr. HALL: Oh, yes, signing those taxes, and not just signing them blindly. This is something that I have never forgotten, a story that a friend of mine still tells. She's 87 years old, and when she married her second husband she would just blindly sign the taxes. Little did she know that the taxes were completely over the top, too many deductions, and when he finally just disappeared and filed for a divorce, she found that she owed hundreds of thousands of dollars in back taxes? Read what you sign. Yes, you may trust your spouse, but trust yourself more.
MARTIN: Trust, but verify. Where have we heard that before?
Mr. HALL: Exactly! And if you're a single mom - you know, I was raised in a single household. I think the single moms have a very difficult situation, but the kids of so appreciative of what they do and how hard they work. But one of things single moms have to worry about is disability insurance. If you're the sole support for your household, think about getting disability insurance in case something goes wrong.
MARTIN: OK, that's important. Now, Alvin, as I mentioned, you're in London. When you come back you're going to start our series on investment 101.
Mr. HALL: Yes.
MARTIN: What are some of the things you're going to tell us about, very briefly?
Mr. HALL: I'm going to talk about key words people need to understand when they're making investments. We all know what a mutual fund is, we all know what diversification is. But we're going to explain those in a little bit more detail so maybe people who don't know it can get information about it, and those who do know it, will have a greater insight into it. We're going to talk about investing in mutual funds, how to achieve diversification at low cost. We're going to talk about systematic investment plans. How you can invest a small amount of money, as a little as 25 dollars a month, into a mutual fund that over time will yield to you a great return.
MARTIN: All right, good advice, not just for moms but for anybody who wants to know more. So thanks for that. Financial guru Alvin Hall joined us from London. Bring me a present.
Mr. HALL: I will.
Mr. HALL: What would you like for Mother's Day?
MARTIN: I don't know, come up with something. Thanks to you.
Mr. HALL: OK.
NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.