On The Road To Financial Fitness

By Carolyn M. Brown

the way I wanted to,” he says, “and at the same time take advantage of some social activities, such as traveling.”

Newlyweds Angelo and Arlene Matthews-Talley have spent the last year learning how to manage their money as one household while, whittling down combined debt. Arlene concedes that they did follow some of the advice given by Mark A. Mitchell, a registered advisor with AXA Financial Advisors in San Juan Capistrano, California. But other changes are still needed.

“One of [our] biggest conquests was getting in touch with a tax advocate to [help] clear up some of the problems we experienced with our 1998 tax disallowance,” says Arlene, 40. Angelo, 41, owed the IRS $6,000 as a result of taking earned income tax credits for which he was later deemed ineligible. Mitchell directed Arlene to file a Request for Innocent Spouse Relief so that her tax refund would not be seized to pay off Angelo’s debt.

“He now owes $0. Our tax debt has been cleared due to the 1998 tax allowance, our monthly payment agreement, and our filing jointly with the injured spouse claim. We would not have known how to go about this had it not been for [Mitchell’s advice],” adds Arlene. The couple also received a tax refund, which was originally $2,700, but they only received $671 since part of the money was used to settle any and all back taxes.

An employment change had a significant affect on them. Angelo took on a part-time job with Five Star Cleaning, earning nearly $300 every two weeks, to help supplement the family’s household income. In addition, he accepted a new position as a mail service courier with the University of Pennsylvania, which carried a $5,000 salary increase bringing his annual salary to $30,000. Arlene now works in the neonatology department at St. Christopher’s Hospital for Children in Philadelphia.

The couple used half of their $2,000 winnings to help buy braces for their 15-year-old daughter, Ashli, and the other half to pay off Arlene’s school loan. Now in her second year of nursing school, Arlene is receiving full tuition reimbursement from her employer. The couple also made arrangements to almost double the monthly payments on their $8,000 credit card balances in order to pay off that debt more quickly. They made the last payment on their $5,000 car note last month. In practice here is DOFE principle No. 5: To engage in sound budget, credit, and tax management practices.

Arlene, however, has not gotten around to rolling over her 403(b) account, which totals $1,682, into an IRA. Nor has she been able to readjust their disability insurance coverage, but she plans to do so the next enrollment period. Since the Talleys are just getting adjusted to their added income, there are still a few things that need to be addressed. “We have not monitored our cash flow [as of yet] but we are currently in the process of devising a working budget along with building emergency savings and a

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