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This month's money makeover

January 30, 2011

Who: Michael Abedor, 40, and Maria Magallanes, 39.

Assets: $128,000 in retirement savings, $40,000 in other savings, $30,000 set aside for children's college costs, 402,000 in home equity.

Liabilities: $313,000 mortgage, $50,000 in credit card debt.

Goals: Generate enough income from Michael's new business to support the family and send Maria back to school; pay for children's college education; buy a new home; take family vacations.

Advice: Reaching the couple's goals is a tall order. Michael needs to get a clear idea of his new venture's economics and separate the business' finances from his family's. He also has to make a business plan rooted in a realistic evaluation of his prospects. The couple should drastically reevaluate their goals, which may not include a home purchase or vacations for the foreseeable future. Maria should consider working part time while back in school. The couple should continue to fund their retirement and reduce expenses to fund savings.

About the planner: Alfred McIntosh is a certified financial planner with McIntosh Capital Advisors in West Los Angeles.

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