Alice Wofford Hallford

Alice Wofford HallfordAlice is the principal of Hallford Financial Advisors, a fee-only financial planning firm in Jackson, Mississippi.In 1991, Alice started the company as a result of her own need for financial planning services.See Alice's Journey for a description of the history of HFA.

Alice is a CERTIFIED FINANCIAL PLANNERTM certificant.She holds memberships in the National Association of Personal Financial Advisors (NAPFA) and the Financial Planning Association (FPA).Alice graduated from Millsaps College, Jackson, Mississippi in 1969 with a B.A. Degree in Education.She is a registered investment advisor with the states of Mississippi and Texas.Alice is a native of Drew, Mississippi.

Alice is married to Chuck Hallford, a United Methodist minister.

Our financial planner Alice Hallford avoids potential conflicts of interest by working solely for you.

"The penalties for early withdrawal can be painful," says Alice Hallford, a financial planner in Jackson, Mississippi.

What's more, this could be a terrible time to sell off your retirement assets.Most stock funds have declined sharply during the last two years -- so you'll be selling at bargain prices.Many past bear markets have led to strong recoveries in stock prices, but if you sell now, you'll miss out on any gains from such a recovery.

Even more important, you'll lose the opportunity to continue earning tax-deferred returns on your past savings.For example, let's say you have $50,000 in a 401(k).
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"Before you cash out, look at your overall financial picture to make sure there are no better options," says Alice Hallford.

First, draw a careful bead on your spending patterns.Many Americans became more careless about spending during the boom years of the '80s and '90s, and you may discover that there is plenty of fat built into your budget.You may be able to trim some items temporarily to help you ride out a period of unemployment.

Better yet, revise your entire budget based upon your current sources of income.That income might come from severance pay, unemployment benefits, emergency savings or a working spouse's income.

"The penalties for early withdrawal can be painful," says Alice Hallford, a financial planner in Jackson, Mississippi.

What's more, this could be a terrible time to sell off your retirement assets.Most stock funds have declined sharply during the last two years -- so you'll be selling at bargain prices.Many past bear markets have led to strong recoveries in stock prices, but if you sell now, you'll miss out on any gains from such a recovery.

Even more important, you'll lose the opportunity to continue earning tax-deferred returns on your past savings.For example, let's say you have $50,000 in a 401(k).
...
"Before you cash out, look at your overall financial picture to make sure there are no better options," says Alice Hallford.

First, draw a careful bead on your spending patterns.Many Americans became more careless about spending during the boom years of the '80s and '90s, and you may discover that there is plenty of fat built into your budget.You may be able to trim some items temporarily to help you ride out a period of unemployment.

Better yet, revise your entire budget based upon your current sources of income.That income might come from severance pay, unemployment benefits, emergency savings or a working spouse's income.

Alice Hallford, a certified financial planner with Hallford Financial Advisors in Jackson, said employees should diversify their portfolios and look at their income as part of their retirement plans.

"The problem is when you work for a company, they're paying your salary so your income is already tied up with the company," she said."Diversify and consider income as part of the plan, and from there look at the different options.Even if you have the greatest company in the world, you still have to diversify."

Hallford suggested that employees look at options other than their company's stock for their 401(k) plans.Investing in a diversified mutual fund can be helpful.

"Even if you had an Enron type stock or one of the technology stocks, you'd still be diversified," she said.

Another way to achieve diversification, Hallford said, is by investing not just in different companies but in different types of stock.

"If you're in a large value-type fund you're not going to be as diversified, but you will be across certain industries and that's important," she said.

Hallford recalled one client who was worried about how much he had invested in Enron through his diversified mutual fund after Enron announced its bankruptcy.

"It was a very small amount he had invested in Enron," she said."It had almost no effect on his portfolio."

Bonds can also be helpful in diversifying a portfolio.Hallford said the amount of risk is negligible and there is a steady return over the years.But she said now may not the best time to buy bonds.

"It might be better to wait until bond prices come down a little more although they have come down some," she said.

"Many people who track their spending find areas where they're wasting money, and that helps them change their spending habits quickly," says Alice Hallford, a financial planner in Jackson, Mississippi.

Once a new budget has been created, continue to track your spending. (That task is a breeze if you use personal finance software such as Quicken or Microsoft Money.) Review the results and make adjustments until you have a realistic and comfortable budget that includes a monthly contribution to savings.

Use automatic savings plans.Such plans offer one of the best ways to keep your savings on track.For example, you might be able to ask your company to contribute part of your salary to a retirement savings plan such as a 401(k) -- that way you don't have the opportunity to skip an occasional payment.Likewise, you can arrange with mutual fund sponsors to shift money from your savings or checking account into a mutual fund account.
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"Since you don't see the money, you don't miss it," Hallford said.

Increase your savings rate by looking for opportunities to save more.Perhaps when you receive a pay increase or bonus, or when your children finish college and your tuition spending decreases.And bear in mind that even small savings increases can make a big difference over time.

Avoid easy fixes.High-flying funds offer the potential to boost your net worth quickly, but they can also deal a serious setback to your plans if they crash.