Live chat with Alvin Hall, Thursday July 3rd 1-2pm

[carriemumsnet]

Hi all

Just to let you know that Alvin Hall, independent money saving expert, is coming along on Thursday to answer your questions about all things financial. A well respected author and presenter, Alvin advised the nation on BBC2's Your Money or Your Life and has written several books on the subject.

One of the reasons Alvin has agreed to join us is that he has recently worked with OMSCo, the Organic Milk Suppliers Co-operative, to compile Cheap Changes, a pocket guide full of money saving tips to help you to beat the 'credit crunch' without compromising your lifestyle. This is available as a pdf for Mumsnetters to download here

If you can't make it on the day, please post your questions in advance here. Otherwise - see you on Thursday.

MNHQ

[GeraldineMumsnet]

test

[AlvinHall]

Q - : If you were to have a windfall, would you save it or pay some of your mortgage off?

A - Rubyslipper
It would depend on if I already had three-to-six months of my living expenses saved in a bank or building society. Having this emergency cash cushion is an important part of prudent financial planning because you can never tell when you may need that money for an emergency. If you already have that amount of money in savings, it would then seem prudent to pay off your mortgage with the windfall. During times like the current credit crunch, I would not rely on a home equity line of credit as my ?cash cushion? as many people have done in the past. In the current credit environment, your bank may decide to restrict the amount it would lend you against the value of your property. Having cash in the bank is always good.

[AlvinHall]

Universally Challenged
A 7.5% interest rate is pretty good. In order to get a higher return you will more than likely have to place the money at risk and I don?t think that?s what you want to do. Keep the money safe and secure. And beware offers of a higher return that involve ?investing.? This word means there?s risk of loss involved.

[callmeovercautious]

Oh great you are here

[LynetteScavo]

Oooh hello Alvin!



Have you written about about how we can budget ect???

If so what's it called, if not, you should!

[AlvinHall]

A - MsDemeanor
Money is cited as being the cause of marital discord and divorce more often than infidelity. So it?s important for you to be open, not secretive, about money. This does not mean you have to a joint account or tell your partner or husband about everything you spend money on; but there must be some ground rules with which both of you are comfortable and with which both of you can live. You need to sit down, discuss the relevant issues point by point and establish clear parameters. One of the most important things if you are going to handle your money separate is whether your partner has any obligation to help you if your spending gets you in trouble. (The fact that you are more extravagant and want to be secretive about it suggests that you know you are spending more than you realistically should. (You are very likely projecting your own disapproval onto your partner.) You need to start talking sooner rather than later!

[Heathcliffscathy]

Dear Alvin,

Fantastic to have you on here! Once ISA allowances have been used, what is the next best place to put savings in your opinion in the context of the current economic climate?

Thank you

[LynetteScavo]

I meant a book - have you written a book!

[callmeovercautious]

Good Q soph. CMOC sits and awaits the answer.....

[AlvinHall]

In my book, 'Your Money or Your Life' I have an entire chapter on budgeting. I that doesn't help then you should try one of the money management software packages like Quicken. Budgeting is really about allocating money to your needs first (the things you have to pay every month). I also advocate saving an percentage of your money before even paying those expenses. The last thing you want to budget for is discretionary spending. These are the things you want. What makes it difficult for most people is that don't distinguish clearly between the needs and the wants.

[Windfall]

Alvin

In the next 12-18 months I'm hoping to earn a substantial sum - several 100k - enough to pay off the mortgage and leave me with a good investment, but not enough to retire on.

Big spend over the next 15 years may be school fees and looking after my parents (which may require a bigger house) so I need a fairly low level of risk. I assuming I can put a good wodge in low risk investments (high interest accounts, ISAs) but I'd like to see some growth beyond that and I'm a bit clueless about what to do to generate it - any ideas?

[AlvinHall]

Sophable:
In the current economic environment, it's probably best to hold your money in cash until things settle down. I had dinner with a friend last night and he talked about how he had been investing money and watching his investments go down. He was not happy. There no harm in holding onto cash and waiting to invest it when the markets look more positive.

[AlvinHall]

LynetteScavo:
I've written 6 or 8 books. My newest one, Show Me the Money, is for children, as well as their parents. It gives them a broad understanding of how money works. It's colorful and fun. You'll learn a lot from it as will your children.

[Heathcliffscathy]

so paying off mortgage no good either??? better to hold onto cash?

thank you so much for your swift response.

[Cathpot]

Hi Alvin, I put a small amount of money away each month into an ISA which tracks the stock market. It has been going for 4 years now and returns are currently very poor. This is an investment I am not looking to cash in for at least 10, probably 15 years. Should I continue to put the money in on the basis that it will be buying shares now at a low price and in 10 years time should be worth more, or should I stop and put money into a savings account? If I do stop adding to it will the money within it continue to be reinvested in shares? Thanks for your time.

[AlvinHall]

Windfall:
Congratulations. I'd like to have a windfall myself. Paying off your mortgage is good. But before you put the rest of the money to work, you have to determine you risk tolerance. Right now you are being very prudent and putting the money into a high-interest bank account which means it will not be at risk. The only way you can get a better return is to invest in shares; but I probably would not do so at this time given all of the undercertainty in the market. Be patient with yourself and the money. Wait for better investment days to come along. There's no harm in keeping your money just ticking over in a high interest account. At least you're not losing it.

[MsDemeanor]

Thanks for answering my question, Alvin. What would you in your personal opinion think is the ideal way for a two-income couple to manage their money?

[RubySlippers]

oh Alvin - thanks for answering my question

you are fab

[Oliveoil]

Alvin

huge fan here too, mwah

of your books, which in your opinion, would be the best to get, for general budget/investment etc advice?

seeing as though I am watching my £££ like a good girl, I am not buying the lot (my children are 5 and 3 and are not aware of money yet so the latest one may not be the best?)

[RTKangaMummy]

{btw the money is not from us}

Our son is 13 now and he has about £6,000 to invest this year {ie now}

Next year, he will be given another £6,000

And so on for the next 5 more years {each year he will be given another approx £6,000 to invest}

So we need somewhere secure with HIGH interest

BUT WHERE??

Building Soc or national saving bonds or somewhere else

ALL of this money is for him for the future

ie NOT to be withdrawn until he is an adult

Thanks

RTKM x

[MsDemeanor]

Poor Alvin -he's drowning in drool here!

[WideWebWitch]

where are the questions answeered earler? another thread?

[AlvinHall]

Cathpot:
By continuing to contribute to your ISA you are taking advantage of pound cost averaging. Your money is buying more shares while the prices are low. This will lower your overall costs of what you own. The reason your ISA has performed so badly is that the markets have been bad recently. All of the major indices are in negative territory. However, given that your timeframe is so far away (I wish I were as young as you) I would probably continue to contributing. What you may want to look at are other ISA that have provided a better long-term return--and I| emphasize long-term over short term.

[AlvinHall]

A - RTKangaMummy
It?s commendable that you putting money away for your son?s future. But what you are looking for?a secure investment with high interest?is impossible to find without there being the risk of loss. If you are your using secure to mean ?risk free? then you must be willing to accept the relatively low interest rate paid by a bank or building society on the money deposited for you son. If you want high interest, you may need to give up some of the security you seek and invest in a unit trust that is made up of shares. You may get a better return over the long term that you would at a building society, but you are exposing that to volatility and the possibility of loss.

[Windfall]

Alvin

Thank you: you're right, the key thing is for me to work out how risk tolerant I really am. Luckily I have a while to do that.

Just to join in the general adulation: am loving your work, by the way.