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Treat your marriage like a business

September 20, 2016 By Liz Weston

My artist husband likes to say that if I were in charge of our spending, we’d be sitting on milk crates instead of furniture and that if he were in charge, we’d have no retirement accounts.

The fact that we have both nice furniture and retirement funds is a testament to compromise — and the wealth-building power of marriage.

Married people are significantly wealthier than single people in every age group, and the gap tends to widen as people approach retirement age. Married couples age 55 to 64 had a median net worth, excluding home equity, of $108,607 in 2011, the latest available Census Bureau figures show. By contrast, single men in the same age bracket were worth a median $14,226 and single women $11,481.

Income and education also contribute heavily to wealth — and to the likelihood that people will marry. But a 15-year study of 9,000 people found that even after controlling for those and other factors, marriage itself contributed to a 4 percent annual increase in net worth. The same study found that wealth typically began to drop four years before a divorce, which ultimately reduced people’s wealth by 77 percent.

Since marital status is so powerfully associated with financial status, people would be smart to view marriage as a business arrangement in addition to a romantic one. Taking a few pages from the business world has certainly made our 19-year marriage stronger as well as wealthier.

In my latest for the Associated Press, a look at what works for us and how to apply it to your own marriage.

Filed Under: Liz's Blog Tagged With: business arrangement, finances, marriage, tips

Secrets of next-door millionaires

August 22, 2016 By Liz Weston

The way most Americans build wealth is no secret: Save, invest, repeat. How average people keep their wealth, though, gets a lot less attention.

It boils down to how they handle risk. It’s hard to accumulate wealth without taking some risks, but there are perils that “next-door millionaires” seem to avoid.

Next-door millionaires weren’t born into wealth. They haven’t invented killer apps or won the lottery, exercised a pile of stock options or played professional sports. They’re the majority of millionaires, and they include teachers, small business owners and professionals who accumulate wealth gradually over time. They’re often in their 50s or 60s before their net worth ticks over to seven digits.

In my latest column for the Associated Press, how to apply the secrets of next-door millionaires to your own finances.

Filed Under: Liz's Blog Tagged With: finances, millionaires, tips

Three reasons not to simplify your financial life

January 13, 2016 By Liz Weston

January seems to beg for fresh starts, organizing binges and articles about simplifying your life. In some ways, though, a little complexity is a good thing.

Of course, paring and consolidating your financial accounts, for example, can help you better track your money. You may find it easier to coordinate your investments, save on account fees and spot fraud.

But there are times when less is not more. In my latest for Reuters, three reasons why you may not want to take simplification too far.

In my latest for DailyWorth, a look at seven smart ways to save for retirement.

Filed Under: Liz's Blog Tagged With: finances, financial life, Retirement, tips

Friday’s need-to-know money news

December 11, 2015 By Liz Weston

Zemanta Related Posts ThumbnailToday’s top story: The 13 key numbers to understanding your finances. Also in the news: How to save on taxes, what to do with an unexpected inheritance, and the financial lies we tell ourselves.

These 13 Numbers Are the Keys to Understanding Your Finances
Understanding your potential.

Three Moves In December To Save Taxes Next April
Act now, save later.

5 Things to Do With an Unexpected Inheritance
Choose wisely.

12 Financial Lies We Tell Ourselves
Time for the truth.

New startup aims to ‘Trim’ the fat from your monthly spending
Eliminating recurring payments.

Filed Under: Liz's Blog Tagged With: finances, financial lies, Inheritance, recurring payments, Taxes, tips

Wednesday’s need-to-know money news

November 4, 2015 By Liz Weston

Stress Level Conceptual Meter Indicating MaximumToday’s top story: Passing the financial sleep test. Also in the news: How to tell if you have a good 401(k) match, how to tell if a purchase will truly make you happy, and the most tax-friendly states for retirement.

Does Your Financial Plan Pass the Sleep Test?
Are your finances causing you to lose sleep?

How to Tell if You Have a Good 401(k) Match
Is your employer generous enough?

Plot Your Purchases Along the Fulfillment Curve to Know When It’s Worth It
How to know before you buy.

These Are The 10 Most Tax-Friendly States For Retirees
Is yours on the list?

Filed Under: Liz's Blog Tagged With: 401(k), 401(k) match, finances, purchasing tips, Retirement, sleep test, Taxes

The magic of tidying up your money

May 26, 2015 By Liz Weston

ClutterFor the uninitiated, it probably seems weird that a book with the unlikely title “The Life-Changing Magic of Tidying Up” can be a New York Times bestseller–or that the introverted Japanese author Marie Kondo is now so famous she can no longer ride the Tokyo subway for fear of being mobbed.

Kondo contradicts a lot of the accepted wisdom about the best ways to organize, urging marathon sessions and encouraging people only to keep what “sparks joy.”

Here’s how the New York magazine writer Molly Young describes the appeal:

In theory, Kondo should translate poorly to American audiences. We don’t like being scolded, we don’t like foreigners telling us how to live, we don’t like our sloppily balled socks treaded on. We don’t like paying $16.99 for 224 pages of nagging. Our roommates and spouses do that for free.

But Kondo doesn’t nag. Instead, she urges a kind of animistic tenderness toward everyday belongings…Kondo’s thesis—that the world is filled with worthy recipients of mercy, including lightweight-microfiber ones—is as lovely as it is alien. It’s empathy as an extreme sport.

While reading the book, it struck me that while you may not want to apply all Kondo’s principles to your stuff, they actually work pretty well when applied to your money. For more, read my DailyWorth column, “The Life-Changing Magic of Tidying Up Your Finances.”

 

Filed Under: Liz's Blog Tagged With: DailyWorth, finances, Marie Kondo, organizing, organizing personal finances

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