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Financial Tips For 2009

As we begin 2009, many of us are concerned about the economy and our own personal finances. Financial Planner Jill Schlesinger, executive vice president of StrategicPoint Investment Advisors, stopped by The Early Show to answer some of the most important questions you and your family can ask as we head into the new year.

The big question for 2009 is whether people should go shopping.

"This is a terrible question to ask a financial planner. But here is the deal: there are some tremendous bargains. This is a very hard time for consumers, and we see that the consumer confidence numbers by the way in November and December - horrible. The worst numbers we've ever seen since they started measuring them," Schlesinger points out. "If you have to buy a suit for work, get a bargain and do it and buy it because I don't think we're going to see these kind of bargains in this year. Because I think the retailers aren't going to buy as much stuff and won't have as much inventory. Sales won't be as good. Buy what you need and use your head."

Should people keep their credit cards?

"Here is the thing: you definitely need a credit card for an emergency. If you have credit card debt, your number one priority in 2009 is to chip away at that debt. It's very hard to do," Schlesinger advises. "Huge interest rates. Look through your budget. Scour your cash flow and say 'I'm not going to go to Starbucks and get a coffee. I'm going took take the $5 every day and put it aside and pay down the credit cards.' If you pay off your credit every month you can keep using it, but really watch yourself. Pay back debt, high interest debt first and work your way backwards."

With the market down dramatically in 2008 and at a low level right now, is this the time to start investing?

"I was just in the green room. A 24-year-old guy asked me 'Should I keep using retirement plan and keep investing?' The answer is 'Of course, you need to do it more than ever right now but you have to diversify.' Even if you were diversified in stocks and bonds and cash and commodities, your accounts went down this year, no doubt about it, but you did better than someone who was in 100 percent in stocks. So you've got to spread your risk out. Keep putting as much as you possibly can put away. You really have to keep doing it," Schlesinger explains.

"Depending how old you are. If you're old or young you want to have more or less in stocks and cash money market, whatever else," The Early Show's Jeff Glor remarks.

"Absolutely," Schlesinger says. "But you have to know yourself. If you've had this horrible experience and you can never have that experience again, you say even if I'm 40 years old and it was hard to take that risk, you say, you know what? I'm just not going to make as much when the market goes back up and I have to agree that it's like the super pinkie swear you make with yourself, I can't make as much if I don't like the risk but I'll put more money away so I don't have to go through this again.

Last but not least, should one fire their financial adviser?

"I love this question. The reason why is, you know, I'm a financial adviser and it's a question I get. Why should I have you? You know? It really does depend. You know that this is a business where you can do it yourself. But it is a drain on your time, your energy, and your emotions. And it may cost you more not to have a financial adviser. So my advice is, I'm registered as an investment adviser, if you hire someone, know how much it costs and understand what you're getting. Is someone working in your best interest? We call that a fiduciary. You ask the person do you register...," Schlesinger explains.

"By law, they are required to," Glor remarks.

"That's exactly right," Schlesinger says. "By law, are you required to put me ahead of you and your firm? If the person says yes, I am more inclined to work with that person. I like a fee-based person. If you're not getting anything, say sayonara.