Having the Money Talk with Your Children

How much financial knowledge do they have? Some young adults manage to acquire a fair amount of financial literacy. In the classroom or the workplace, they learn a great deal about financial principles. Others lack such knowledge and learn money lessons by paying, to reference William Blake, “the price of experience.” Broadly speaking, how much financial literacy do young people have today? At this writing, some of the most recent data appears in U.S. Bank’s 2016 Student and Personal Finance Study. After surveying more than 1,600 American high school and undergraduate students, the bank found that just 15% of students felt knowledgeable about investing. For that matter, just 42% felt knowledgeable about deposit and checking accounts.1 Relatively few students understood the principles of credit. Fifty-four percent thought that having “too many” credit cards would negatively impact their credit score. Forty-four percent believed that they could build or improve their credit rating by using credit or debit cards. Neither perception is accurate.1 Are parents teaching their children well about money? Maybe not. An interesting difference of opinion stood out in the survey results. Forty percent of the parents of the survey respondents said that they had taught their kids specific money...
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One Couple, Two Different Retirements?

After many years together, some retired spouses may find their daily routines far apart. When you see online ads or TV commercials about retirement planning, do they ever show baby boomer couples arguing? No. After all, retirement planning is about the pursuit of a happy outcome – a fun and emotionally rewarding “second act” that spouses and partners can share. Realizing that goal takes communication. As you approach retirement, you may not be who you were at 30 or 50. You and your significant other may want different daily lives once you retire. This is a frequently ignored reality in retirement planning. In preparing to retire, you might want to consider your individual preferences and differences when it comes to these factors: How you spend your days. What does a good day in retirement look like to you? What does it look like for your spouse or partner? Social engagement. How much time do each of you want to spend working, volunteering, or socializing? Your preferences may differ. Your health. If you contend with serious health issues, you may define a “good day” in retirement much differently than your spouse or partner does. Your spending. Where will your retirement income...
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Beware of Emotions Affecting Your Money Decisions

Today’s impulsive moves could breed tomorrow’s regrets. When emotions and money intersect, the effects can be financially injurious. Emotions can cause us to overreact – or not act at all when we should. Think of the investors who always respond to sudden Wall Street volatility. That emotional response may not be warranted, and they may come to regret it. In a typical market year, Wall Street can see big waves of volatility. This year, it has been easy to forget that truth. During the first third of 2017, the S&P 500 saw only 3 trading days with a 1% or greater swing – or to put it another way, 1% swings occurred just 3.5% of the time. Compare that to 2015, when the S&P moved 1% or more in 29% of its trading sessions.1 The 1.80% May 17 drop of the S&P stirred up fear in some investors. The plunge felt earthshaking to some, given the placid climate on the Street this year. Daily retreats of this magnitude have been seen before, will be seen again, and should be taken in stride.2 Fear and anxiety can also cause stubbornness. Some people have looked at money one way all their lives....
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