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Money

Thursday’s need-to-know money news

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Today’s top story: How much it costs to adopt a child. Also in the news: Why money is so confusing, and the true history of credit scores.

How Much Does It Cost to Adopt a Child?
The adoption process can be long and cost anywhere from less than $1,000 to more than $50,000.

Why Is Money So Confusing?
Understanding some of the common barriers, along with strategies to cope, could help you finally get a handle on your finances.

The True History of Credit Scores
Critics contend that the system still has discriminatory effects.

Why is money so confusing?

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Managing money is an essential life skill, yet most U.S. adults would fail a financial literacy test. Consider the results of a survey meant to measure financial literacy, called the TIAA Institute-GFLEC Personal Finance Index. On average, U.S. adults correctly answered only 50% of its financial literacy questions in 2022.

In other words: If you find money confusing, you’re far from alone. But the reasons you’re baffled may have more to do with how our brains work than how money does. In my latest for the Associated Press, understand what could help you to get a handle on your finances.

The 3 biggest money decisions you’ll ever make

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Some factors that influence your financial success are beyond your control. Older people tend to be richer than younger people. White U.S. households, on average, have many times the wealth of black or Hispanic households. Those born into the top or bottom of the economic strata typically stay there.

But the decisions you make about three key areas in your life can have an outsize impact on whether you’re able to build financial stability.

In my latest for the Associated Press, the three biggest money decisions you’ll ever make.

Wednesday’s need-to-know money news

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Today’s top story: 7 ways to ready your finances for divorce. Also in the news: Tips for the Class of 2017, simplifying your savings, and how a credit union raised the roof on credit card rewards.

7 Ways to Ready Your Finances for Divorce
Preparing for a difficult time.

Class of 2017: Get a Jump on Adulthood With These 7 Tips
No more kidding around.

Simplifying Saving with the 52-Week Money Challenge
You can do it!

How a Credit Union Raised the Roof on Credit Card Rewards
A Chicago-based credit union is taking rewards to the next level.

Are you saving too much?

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Zemanta Related Posts ThumbnailWe know Americans aren’t great at math, so there may be people taken in by a column headlined, “If you have savings in your 20s, you’re doing something wrong.” The post went viral, leading to counter-posts by virtually everyone in the known universe who understands how money works.

Bottom line: You can’t ignore the power of compounded returns. If you don’t know why that’s so important, Google it or read this column by Michelle Singletary in the Washington Post: “In your 20s? Don’t squander your biggest asset: time.”

Carpe diem isn’t exactly a new idea. Since the beginning of time (or at least since the invention of money), people have argued that living for today is far more important than saving for tomorrow. But smart folks do both. I traveled a lot in my 20s and 30s, including a trip around the world, and did other expensive things like learn to fly an airplane. But I also saved money–a ton of money–for retirement. And now, decades later, I have a lot of options that people who got a late start saving for retirement don’t have. I can retire early or cut way back on our savings, and we’ll be fine.

It is certainly possible to save too much, but it’s not that common. If you’ve maxed out all your retirement savings options and are looking for additional ways to save, maybe it’s time to think about loosening up (unless you’re making up for a late start). But we’re certainly not facing an epidemic of over-saving–among young people or anyone else.