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Despite Stock Market Gains, Workers Worry About Retirement

Filed under: Retirement, Retirement Living, Retirement Plans, 401K, SavingAlamy

The stock market has climbed back to a record high, but workers remain pessimistic about having enough money for retirement. The Employee Benefit Research Institute’s annu…

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Living Without Credit Cards: She Made It Work, and You Can Too

Filed under: Credit Cards, How to Save Money, Credit History, Credit Repair, Debit Cards, Saving(Photo Courtesy Liz Smiley)Every time you make a plane reservation or rent a car or pay for concert tickets, you’re asked to provide a credit card number. L…

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Not Saving Enough? Your Native Language May Be to Blame

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English Translator If you’re reading this without the help of Google Translate, chances are your saving habits stink, and you’re not as healthy as you could be either.

According to recent research by Yale University behavioral economist Keith Chen, the language you speak plays an important role in how you approach saving money. This might seem absurd, but his research has shown a strong correlation between language and future decision-making.

“Languages force you to pay attention to time,” Chen explains. Languages such as English, French, Italian and Tamil are what he calls “strong future-time reference languages” — languages that have a different tense for the future. “Weak future-time reference languages,” such as Mandarin and German, don’t make as much of a distinction between the present and the future; in German, for example, “Morgen regent es” translates as “it rains tomorrow.”

The greater the linguistic distinction between present and future, Chen says, the less likely you are to plan ahead. That may be why speakers of future-less languages are likely to have 39 percent more wealth than their future-speaking counterparts by the time they retire. They are also 31 percent more likely to have saved more.

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The study also found that future-language speakers tend to be unhealthier: They get less exercise, practice unsafe sex, and smoke more than their future-less language counterparts. According to Chen, they choose “current pleasure in exchange for future pain.” He realizes that the whole premise sounds far-fetched, but his research has yielded statistical evidence showing that future-less language speakers are 24 percent less likely to smoke, 29 percent more likely to exercise, and 13 percent less likely to be obese.

Critics of Chen’s work suggest that the differences observed are not related to language but rather to culture. But he responds that he controlled for that factor by testing in multilingual countries. In those nations, he notes, you can find families living next to each other with the exact same education and socioeconomic factors, but different languages, and different levels of saving. Sure enough, the families conversing in the future-less language were on average saving more.

Chen says that what his study essentially shows is “how we represent these problems to ourselves.” So instead of purchasing a copy of Rosetta Stone, you might want to consider changing your perception of time.

Photo Credit: Alamy


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9 Ways to Teach Teenagers About Money

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Teenager moneyWhile learning budgeting skills is not likely to be a high priority for most teenagers, teaching money management skills is as essential to raising kids as reminding them to brush their teeth and eat their vegetables. If the financial crisis taught us anything, it should be that everyone needs to be smarter about money.

While some school systems have added financial literacy to their curricula, many have not, and in the end, responsibility for ensuring your offspring are ready for adult financial life is on your shoulders. Fortunately, there are plenty of ways you can add to your teens’ practical knowledge.

Start with a game. Websites like and have free games that teach teens about money management. For example, on the Learn4Good site, teens can play “Record Shop Tycoon” or “Burger Restaurant” to learn about running a business. The Practical Money Skills site has “Financial Football” geared to teens who must answer questions about money to move on the football field and “Road Trip to Savings” to teach them about why they need to save.

Put them on a monthly budget. If you haven’t already started your kids on an allowance, you should consider the benefit of a monthly infusion of cash into your teen’s pocket. Instead of handing out $20 bills when they’re heading out with their friends, you can teach them to control their spending by limiting them to a specific amount each month. You’ll need to be ready to say no when they ask for more money after they spend all of the allowance in the first week, but that’s the only way for them to learn.

Pay them for choosing to save. Train your kids to pay themselves first by putting at least 10 percent of any gift money or anything they earn into a savings account. You can even offer to match the savings as an incentive for them to save more. Your teens will learn more if they do the research themselves to find the account with the lowest fees and highest interest rate. Teens who already have jobs may be ready for a checking account with a debit card. If so, warn them about the risk of racking up fees if they opt for an overdraft protection program, and consider arranging an automatic transfer from a savings account to cover overdrafts instead.

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Give them a clothing allowance. Instead of paying out-of-pocket for each pair of jeans, have your son or daughter come up with a list of needs for each quarter or season. Figure out a practical budget and then put that money on a prepaid debit card. This gives them the power to choose between blowing their budget on a pair of sneakers or spending more carefully and having enough for an extra pair of jeans and a couple of shirts, too.

Teach them the art of thrift. Teach your kids to appreciate “vintage” clothing for style and savings. Thrift stores and flea markets can be a great resource for gifts, books, and DVDs. Your teens can get a lot more out of their limited spending power if they learn frugal shopping techniques.

Give them a budgeting project. Whether you need a new cellphone plan or are planning a vacation, ask your teen to do the research. A teenager may be better than you are at wading through the various mobile phone options, and will have a vested interest in boosting the availability of data for her iPad or smartphone. A teen can also help look for deals for a family vacation for hotel rooms, flights, or car rental and develop a spending plan based on your budget and destination.

Encourage them to get a job. Nothing teaches money skills faster than getting a paycheck with all the taxes . Before that first paycheck arrives, make a plan with your son or daughter for saving part of every check. Depending on your teen’s level of maturity, determine whether the rest of the income will go toward a specific financial need such as car insurance or whether your teen will have full control over the money.

Talk about college financing. According to recent research by FICO, the average amount of student loan debt was more than $27,253 in 2012. Talk to your high school student about their options for college and what your expectations are for their financial contributions during their college years. Giving your teens information about the cost of college and about the burden of student loan debt can help them make decisions about working during college and where to attend.

Warn them about identity theft. A 2012 study by AllClear ID, an identity-theft protection company, showed that minors are 35 times more likely than adults to have their identity stolen. Warn your teen about the importance of safeguarding their Social Security number, name, and bank account information.

Teaching your teen about money matters can not only help them in the future, but it may help your own money management, too.

Photo Credit: Shutterstock


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Her Financial Goal: Cut Out All Those Small Money Wasters

Filed under: Family Money, Budgeting, Savings Accounts, Saving
Everyone has things they want to improve about their financial lives, even those of us who are paid to write and think about money on a daily basis. To that end, the editors at Daily Financ…

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