A new world ahead: with new life changes underway, Stacy Hall is focusing on her own financial goals.

STACY HALL SAYS IT'S HER TIME NOW. "I've just begun to really think about my future," says Hall, 45, a divorced mother of grown children, ages 18 and 22, who are out of the house and self-sufficient. "Until now, I had to put all my energy into my family and my job--that was my priority."

Her future looks promising. In 10 years, Hall sees herself retiring from her $70,000 a year job as a production-team member with Toyota, relocating from Georgetown, Kentucky, to perhaps North Carolina, to open a bed and breakfast or to buy a Victorian house and convert it into a coffeehouse.

"Where I live now, there isn't a market for such a place," says Hall. "I want a place where people can come and talk, relax, have dessert, and shop."

Retirement is now on the horizon, and Hall has set 55 as her ideal age. She has developed some good financial habits that will help ensure her success once she defines her path. She has nearly $80,000 in her 401(k), more than $47,000 in a pension, $34,600 in a money market account, $1,500 in a CD, and $2,500 in a checking account. Although she admits to treating herself by purchasing a Coach handbag once a year at Christmas, Hall mostly shops at Wal-Mart or Marshall's.

Hall has managed to curb her extravagant spending. "I felt if I worked hard then I could have what I wanted," she confesses.

Hall, who grew up poor and is motivated to stay ahead financially, now has a budget and sticks to it. "I have a notebook of my bills. I know what my electric bill is likely to be next month," she says. Her credit card has about $500 on it and she typically pays off her debts in full each month. Hall owes less than $10,000 on her 2005 Camry and approximately $92,000 on the house she purchased in 2000 for $111,000, which is now worth $130,000.

So what stands between her and her dreams? Hall believes she has to go beyond saving and begin investing. "Investing intimidates me. I'm risk adverse. I don't like to take chances," she says.

She knows she could be growing the money in her money market account, which was originally intended to help fund her children's education. But when both of her children decided that they didn't want to go to college, Hall was left with a nice sum of cash that she can use toward retirement or starting her business.

Since she admits she knows little about investing or running a business, Hall knows she needs help so as not to squander her resources. "I should have gotten serious about investing a long time ago, but I also know it's never too late. I want more out of life."

THE ADVICE

BLACK ENTERPRISE paired Hall with Kathleen Williams, president of Williams Financial Services Group in Oklahoma City. Hall has a lot working in her favor, says Williams. She has term life insurance, she controls her cash flow by paying off her debt within 30 days, and she participates in her 401(k) at work. Hall also has enough cash for emergencies through liquid vehicles such as a CD and a money market account.

Hall's goals include: purchasing a new home for about $180,000 with an interest-only loan, moving to North Carolina when she retires at age 55, opening a bed and breakfast or a coffee shop, and saving $100 a month for her grandchild's education.

Set Priorities. Hall should determine her most important goals over the next one, five, and 10 years, says Williams. "Thoroughly researching one goal at a time will help her make a decision on the most feasible, desirable, and practical solutions to problems," says Williams.

Learn Investing. "Stacy should take a basic investing course at a community college or technical school, along with reading basic investment books." Then she'll be ready to find a financial planner. She can get recommendations from family, friends, coworkers, or a professional group like the Certified Financial Planner Board of Standards (www.cfp.net; 888-237-6275).

Learn About Real Estate. Williams says Hall should start with a real estate investing course since she expressed an interest in investment properties. "She could begin buying investment properties to supplement her income when she chooses to retire at 55," says Williams.

Get the Right Mortgage. Although Hall wants to trade up to a new home by using an interest-only loan, Williams says that's not the best way to go. Hall should consider a 15-year fixed-rate mortgage for her larger home and use an interest-only mortgage for the investment property she wants to buy. An interest-only mortgage allows you to make monthly payments that consist only of the interest you're charged on the principal amount you've borrowed for a specified period of time (usually three to 10 years). This works for Hall because she expressed interest in moving in 10 years, when the interest-only period of her new loan would end.

Reallocate Portfolio. While there are ways for Hall to tap her 401(k) at age 55, Williams doesn't recommend doing so. Leaving the money alone until age 59 1/2 avoids tax headaches, and the longer the money rides, the better. "Stacy has some lessons to learn in developing a sound investment strategy,"says Williams. Diversification is needed over different asset classes within her 401(k). "She needs to limit exposure to losses in any one sector of the market," says Williams.

In analyzing Hall's risk profile questionnaire, Williams determined Hall is a moderately conservative investor, so a portfolio with 6% fixed-income or cash, 49% bonds, 34% domestic stocks, and 11% international stocks, would be suitable for her. Williams also advises that Hall put the excess $15,000 to $20,000 that she has for emergencies in an investment vehicle.

Fund Grandchild's College Education. Hall is hoping her grandchild will pursue college. Williams recommends that Hall use her $2,000 contest winnings to pay off the small debt she has on her credit card from holiday spending, then use the rest to open a 529 college plan for her grandchild.

Financial Snapshot:
Stacy Hall

HOUSEHOLD INCOME

Gross Income               $70,000

ASSETS

Checking                   $2,500
Pension                    48,814
Money Market               34,600
401(k)                     79,127
Certificate of Deposit      1,500
Value of Home             130,000
Value of Car               13,150
Total                    $308,691

LIABILITIES

Mortgage                  $92,268
Car Loan                    8,981
Credit Card Debt              500
Total                    $101,749

NET WORTH                $206,942

According to Kelley Blue Book