More Than One-Third of Women Aren’t Happy With Their Financial Advisors

Hiring a financial advisor is a smart step on the road to financial security and independence. But new data from New York Life Investments reveals that women’s experience with advisors isn’t as positive as it could be. A good 40% of female respondents feel that financial professionals treat women differently from men, and 26% feel that they have less access to financial education than they should.

And it’s not just women who are average earners who feel this way. Though an estimated 70% of women with investable assets above $250,000 work with an advisor at present, 38% are less than completely satisfied with the professionals they’ve chosen. Not only that, but 67% of women change advisors because of poor service or lack of a personal connection.


It’s crucial that you feel not only comfortable with your financial advisor but satisfied with his or her services. If that’s not how you feel at present, here are a few things you should look for as you seek out someone new to manage your money.

1. Someone who understands your unique needs and challenges

Women often struggle to save appropriately for retirement, and the reason often boils down to the fact that they earn less than their similarly qualified male counterparts. Throw in the fact that women tend to live longer than men, and it’s no wonder so many are concerned about running out of money during their golden years. As a woman, it’s imperative that you find a financial advisor who can understand, and perhaps even relate to, these concerns, and who can help you devise a plan that accounts for them.

2. Someone who respects your appetite for risk

Not everyone’s risk tolerance is the same. For some people, loading up on stocks is enough to make them lose sleep. Other investors, meanwhile, can see their portfolios lose 10% of their value in a day and barely flinch. Finding an advisor who understands and respects your personal tolerance for risk is a crucial part of establishing a long-term financial plan, so don’t even think about working with someone who pushes investments without recognizing how the risk involved might affect you mentally.

3. Someone who’s transparent about fees

Financial advisors, like all other professionals, need to be paid for their services, but understanding how that fee structure works is an important part of building a trust-based, long-term relationship. Normally, advisors either are paid on a commission basis or take a fee as a percentage of assets under management. The latter is generally a preferable arrangement, since it motivates them to grow your assets and discourages them from pushing mediocre investments that offer generous kickbacks.

4. Someone who’s a fiduciary

Some financial advisors hold to the suitability standard, which means they must recommend investments that are suitable choices for you. Other advisors, however, act as fiduciaries, which means they must put your best interests ahead of theirs. Finding an advisor who holds to the fiduciary standard is ideal, because it effectively means that you always come first — as you should.

There’s no need to settle for a not-so-great financial advisor when there are plenty of respectful, knowledgeable professionals out there. If you’re not satisfied with your advisor, don’t hesitate to find a better one. After all, it’s your money and future at stake.

How to manage money in a marriage | The

Among the romance of it all, it is easy to put aside the fact that getting married means more than just saying ‘I do’.

For most couples, marriage means a merging of finances. With a lot of marriages ending because of disagreements over money, it is worth getting on the same page about how you will approach what can be a tricky area to navigate.

What changes after marriage?

In reality, not much changes in your everyday finances once you’ve taken your vows. You can receive some tax benefits under the marriage allowance (only if one of you isn’t a high-rate tax payer), and there are some benefits surrounding paying a lower rate of tax on interest earned from savings. One of the most significant gains is that if one of you were to die, the surviving partner would not be charged tax on anything he or she inherits from the estate.

However, the biggest change comes if you decide to take out a joint credit agreement in the form of a joint current account, mortgage or loan. Vows do not create a financial association, but these financial products do. This means that you are both responsible for the debt, and in the case of a joint current account, money is owned equally regardless of who deposited it into the account.

So how can you manage your money?

It is down to personal preference how you manage your money in a marriage, but here are three possible approaches you could adopt:

Separate accounts – You could just keep separate accounts for everything. In this situation you are not taking on any joint financial responsibility, but it could get complicated in terms of paying bills and household costs.

Halfway house – You could have a joint bank account that both of you pay a proportion of your salary into and that covers expenses and household bills. Then you would each maintain a separate bank account and therefore retain an element of financial independence. This can get complicated if there is disparity in your incomes, as you would need to work out what amount each of you should contribute to the joint account based on how much you earn. It can also become complicated if you add children into the mix, especially if one partner takes a hit financially by going part-time or giving up work in order to look after them.

Merge finances – The final option is to merge your finances entirely. In this case you would pay both salaries into one account (if you have two sources of income) and use that for everything. In terms of management, this makes it easier because you are just dealing with one pool of money, but it does mean a loss of financial independence. If you were to then separate, it could make it harder to divide up your finances.


The key thing is that in terms of debt, you are only liable for debts in your name, not for any debts of your partner. This applies to your credit score as well: if your husband/wife has an issue with debt, this will not affect your own credit rating unless the issue relates to a financial product that you jointly hold.

As with any sort of financial management, it is best to make a monthly budget and be aware of what you can and cannot afford. You can either do this separately, or if you are sharing finances, together. As difficult as it may seem sometimes, being aware of what money you have going in and coming out makes life that much easier and helps you to avoid getting into financial difficulty.

And as with anything in marriage, communication is key. It is best to discuss what financial responsibilities you and your spouse have both individually and jointly, and therefore what your money should go towards. From filling up the car to covering the mortgage, it all matters when you are sharing a life together.

Credit cards have a number of benefits. Among them is easy tracking of your spending, which can help you manage your finances, whether you’re married or not. If you’re after the top card offers on the market, a great place to start is our list of the top credit cards.

Five crucial money mistakes rich people never make

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Get rich by avoiding these 5 money mistakes

We all make mistakes, yet there are a few bad habits the super-rich tend to avoid. Here are five money missteps that may be keeping you from getting rich.

Financial advisor with laptop meeting with senior couple in dining room

When the stock market drops — as we saw in December, when major indexes all dropped at least 8.7% — you have to know what you are doing or you can get burned. If you don’t have time to spend a few hours a day tracking the market, the cost of a good financial advisor is well worth the investment.

Ivory Johnson, founder of Delancey Wealth Management in Washington, D.C., said most wealthy people don’t try to manage their money themselves — they hire financial planners, CPAs and attorneys to protect their assets and reduce their risks.

And when are risks the highest? When markets start taking investors on a roller-coaster ride.

“When investors are stressed, the odds of making a bad decision increase,” he said. “Wealthy people mitigate that stress by having good advisors.”

While some may balk at paying a fee, the returns on that money will, most years, be well above that amount. During the bad years, your advisor can help you mitigate your losses to preserve your wealth for the long haul.

A beachfront residence is seen in East Hampton, New York.

The average investor may have stocks and bonds in their 401(k) savings or investment portfolio. The rich branch out and diversify.

Remember Enron? Many employees of the energy giant bought into the company’s sales pitch so much that they put all of their retirement savings in its stock. And when the firm went belly up — so did all of their savings.

In addition to stocks and bonds, the ultra-wealthy invest in things such as real estate, limited partnerships and private markets, according to Tom Corley, author of personal finance tomes such as “Rich Habits.” That way, if stocks, for example, are having a really bad year, you may make up the difference with a good year in real estate or vice versa.

Another appealing factor that draws a lot of wealthy investors to real estate: It may provide an extra income stream. In addition to the potential appreciation of that property, if you rent it out you get an immediate source of income, which can give you a nice cushion should you lose your primary job.

And of course, you won’t be as worried in a year when stocks are down.

“Most wealthy families have real estate holdings because it offers recurring revenue, tax benefits and creates equity,” Johnson said. “It also puts less pressure on their stock portfolios to perform.”

A woman passes in front of a Bitcoin exchange shop.

The ultra-wealthy don’t get caught up in the latest fads, pouncing on the next “new” thing.

Take bitcoin, for example. The cryptocurrency took off in 2017, making instant millionaires out of some early investors. That spurred a lot of people to jump in and try their hand at making a fortune.

That could be fine — if you’re a professional trader or just want to play around with a little gambling money. Yet fads like bitcoin are risky business: The cryptocurrency has since fallen a stomach-churning 70% in the past year.

Warren Buffett, who is famous for his philosophy of investing in what he knows and then holding on to it for the long haul, told CNBC last year that “in terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending.”

The legendary investor, who is worth $80 billion, according to Forbes, believes you have to know what you know — and stay the course.

“What counts is having a philosophy … that you stick with, that you understand why you’re in it, and then you forget about doing things that you don’t know how to do,” Buffett said at the Berkshire Hathaway annual meeting in 2018.

Those who are caught up in the “follow the herd” mentality may do so because they are focusing on “one thing they think can make them rich overnight,” said Johnson at Delancey Wealth Management. “It doesn’t work.”

Visitors look at the painting Le Printemps, 1881, by French painter Edouard Manet during its presentation at Christie's Auction House in Paris October 22, 2014.

Wealthy investors are patient and don’t necessarily think about short-term returns.

“Most people don’t sit down and actually plan out how they are going to invest their savings over the next 20 years,” Corey said. “The wealthy do. They just don’t wing it.”

And it’s not just about making money for themselves; it’s about creating generational wealth that can benefit their grandchildren and beyond.

“Instead of buying a painting for the living room, they’ll spend extra money for art that can appreciate,” Johnson said. “They join clubs and organizations so the relationships they make will offset the fees, even if they don’t realize it for several years.

“This demands foresight, estate planning and patience.”


The volatile stock market may make you want to run for cover. Because the rich are in it for the long term, they don’t tend to panic.

They also have a lot of liquidity and financial resources they can lean on when the stock market, real estate market or other investments go south, so they don’t “need” to sell, Corley said.

For Johnson, it’s also about the world giving us what we give out.

“Anxious investors receive anxiety, and confrontational people are always engaged in some form of conflict,” he said. Meanwhile, optimistic people experience more positive outcomes.

“Over a lifetime, this becomes a habit and you’ll often find that wealthy people who are happy got that way because they were optimistic, as opposed to becoming optimistic because they got wealthy,” Johnson said.

More from Invest in You:

  • Financial lessons a mother of two learned after an unimaginable loss
  • Two simple insurance charges to understand with health coverage
  • Josh Brown: How I explain the stock market vs. the economy

Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.


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Real Wealth Resides Under Our Feet by David Korten

For many years, I have been seeking to understand why we get our economic policies so terribly wrong and how we might get them right. I have long believed the problem can be traced to a failure of economists to distinguish between money, which is just a number of no intrinsic value, and those things essential to our existence, health, and happiness. The latter includes things we can buy like food, shelter, and entertainment. It also includes those things that can’t be bought, like peace, love, and finding meaning in life.

Reading the current issue of YES! highlighted with special clarity the implications of the disconnect between money and well-being. The theme of the issue is “Dirt,” and it emphasizes the nature and importance of the living soil on which our well-being depends. It includes inspiring stories from farmers restoring and nurturing the health of soils that previous human abuse destroyed.

Humans lived nearly 200,000 years without money. No human has ever lived without soil.

Somehow the extent of our human dependence on soil as the foundation of life and all real wealth had previously escaped me. Without soil, Earth is just another dead planet among the trillions of such planets in the cosmos. We would not exist. Could anything be of greater value to us than dark, rich soil teeming with microbiomes, worms and insects?

Yet rarely will we see any mention of soil in an economics context, either in a professional paper, a textbook, or news report. They may report sales, profits, and jobs created by agribusiness corporations that profit from practices that turn Earth’s living soils into dead dirt. But by ignoring life, they ignore the foundation of our well-being.

To get our future right, we must get our economics right. We are not talking marginal adjustments, but rather a fundamental rethinking of how we define the economy and the results we want it to produce. The economics that gained global currency in the 20th century and that shapes the current global economy begins with the assumption that with enough money we can buy whatever we need or want. If we want more, we simply need more money.

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Yet that argument falls apart when you consider money in isolation from an integrated economic system. Imagine you have survived a shipwreck and find yourself marooned on a desert island composed of just sand and rock. You are the only living thing in sight. You have loads of cash in your pocket and a billfold full of credit cards. But your island has no food, drinkable water, or shelter from the burning sun, and despite your wealth, your death is only a few days away.

Now change the scenario: you have landed on a lush tropical island rich with plant and animal life. Your money is still useless, but you can hunt, fish, and forage for food. You can drink from flowing streams. You can find wood to cook your food, and plenty of material to build a shelter. By applying your skills and a bit of labor, Earth will provide the essentials of your survival until rescue arrives.

Soil is what makes the difference between these two islands. Everything else follows.

Now consider a third scenario. This time you land on the island of abundance with fellow shipwreck survivors, people of varied skills. Some are toolmakers. Some farm. Some fish. Some are builders. Some know the medicinal properties of plants.

Together, you recognize you can all benefit from working cooperatively to share your expertise. So, you set up a system of exchange. It may be based on gifting according to need, or it may involve some form of money. Regardless of the method of exchange, the value resides in the gifts of the soil combined with human skills and labor.

In a healthy economy, money can be a useful tool, if we know how to manage it properly. We must always remember, however, that real value and the source of our well-being does not reside in the shells, pieces of metal, numbers on a slip of paper, or bits in a computer network. The value is in the gifts of the soil and the products of our labor.

Humanity is in deep trouble because we behave as if the value on which our well-being and happiness depends resides in the tokens of our exchange. We handsomely reward those who create and manage money, but neglect the soil and the labor of those who care for it.

We have it terribly wrong. It is within our means, however, to get it right. Although the details are complex, the principles are quite simple. We are living beings born of and nurtured by a living Earth. We must give priority to Earth’s care.

In so doing, we need not ask the advice of an economist who believes value resides in money. Instead, we would do well to seek the guidance of a farmer who knows how to build and nurture healthy soil.

Capital – How the paparazzi make their money

Santiago Baez has been a paparazzo since the early 1990s. Camera in hand, he’s witnessed the fallout of extramarital affairs, new babies, deaths, new love and breakups of some of New York’s most famous residents.

For paparazzi like Baez, earning a living requires an encyclopedic knowledge of where famous people live in New York, as well as a network of drivers, and shop and restaurant workers who call in tips when they spot celebrities in the vicinity. Often, the tips are from the celebrities themselves via social media: looking to build a following, they alert the public (mostly directed at photographers) about their movements, or their publicist will call an agency to dispatch a photographer.

Most pictures aren’t worth much, but a shot of a new baby, a celebrity kissing a new paramour, or a wedding can change fortunes overnight.

But Baez’s income is not dependably constant. His success balances his training and knowledge of celebrities with the crushing awareness that his earnings are remarkably variable and unpredictable.

The ‘paparazzi gold rush’

These fortunes are determined by a handful of people like Peter Grossman, the photo editor at Us Weekly from 2003 to 2017. But Grossman didn’t work with paparazzi directly; instead, a photographer like Baez sells his pictures to an agency that has the relationship with photo editors like Grossman. A paparazzo receives anywhere between 20% and 70% of the royalties the picture earns, depending on the photographer and the deal he or she negotiated with the agency. The more senior, skilled, and talented paparazzi command better terms, which often includes exclusively selling their pictures to just one agency.

Exclusive shots that make waves in the world of tabloid news can command huge sums: Grossman told me he paid “mid six figures” for a series of photographs of the actress Kristen Stewart in a passionate embrace with Rupert Sanders, the married director of Snow White and the Huntsman, a film she had starred in.

Grossman lived through the heyday of paparazzi photography: he was the man behind the rise of “Just Like Us” pictures in the early 2000s – candid shots of celebrities doing mundane tasks like getting coffee or pumping petrol that proved a hit with his magazine’s readers. Soon, lots of outlets were publishing their own “Just Like Us” pictures, kicking off what’s known in the industry as the gold rush years, coinciding with the heyday of Paris Hilton, Britney Spears, and Lindsay Lohan.

At the gold rush peak, an exclusive ‘Just Like Us’ picture would typically fetch $5,000 to $15,000

Although the price of a photograph depended on what the celebrity was doing and whether it was an exclusive, at the gold rush peak, an exclusive “Just Like Us” picture would typically fetch $5,000 to $15,000.

The gold rush era brought about gold rush mentality, with many new photographers flocking to the industry, willing to break laws and giving paparazzi an even worse reputation for going too far and harassing celebrities and even their young children. Grossman urged everyone to take a coordinated step back, pay less for pictures, and not break laws or put themselves or others in danger to get the shot, but it didn’t work.

The global financial crisis and the rise of online media finally killed the gold rush. Digital media increased the demand for celebrity photographs but decreased the price media companies were willing to pay for them. Photo agencies began to consolidate or go out of business, and the remaining ones changed their business model. Instead of making magazines pay per photo, they offered a subscription service: publishers could use as many photos as they wanted to fulfill the greater demand for cheaper shots. As a result, paparazzi are paid a small fraction of the subscription fee; how much depends on how many of their pictures are used each month. That means an exclusive “Just Like Us” photo that would have fetched $5,000 to $15,000 before, now pays only $5 or $10.

Paparazzi are earning less and less. Gone are the days when many could count on a six-figure income. Now, getting a rare exclusive shot is necessary to earn big money.

Risky business

Seeing a celebrity often happens by chance, which is exactly part of the reason why Baez’s income is so volatile. Not surprisingly, Baez employs risk strategies in his craft similar to what people use in financial markets.

Financial economists separate risk into two broad categories: the first is idiosyncratic risk, or the risk unique to a particular asset. Suppose Facebook changes management; the future of the company is unclear, and the price of the stock might drop based on factors unique to Facebook that don’t impact any other stock. Idiosyncratic risk is risk that applies only to one individual stock or asset.

The paparazzi face lots of idiosyncratic risk. What a celebrity does today – whether she spends time with A-list or D-list friends, for example – determines how much the paparazzi earn that week. If a celebrity stops being interesting or popular, the value of these pictures decreases. Such images are like a stock: their value varies based on a particular photographer getting the right shot at the right time.

Photographers often form teams or alliances to share tips  to increase the odds they’ll be in that place

The paparazzi manage this idiosyncratic risk by spreading it around: photographers often form teams or alliances to share tips (on sightings) and sometimes royalties to increase the odds or payoffs they’ll be in that place.

Because each photographer bears lots of risk based on how lucky he is that day, an alliance pools their luck, reducing their idiosyncratic risk.

The second kind of risk is systematic risk, or risk that affects the larger system instead of an individual asset. Systematic risk is when every stock rises or falls together because the entire market surges or crashes as it did in 2008. Systematic risk events often happen because of a big economic disruption like a recession or an election result that people think will affect business. Systematic risks are harder to manage than idiosyncratic risks, and the downsides are potentially more dangerous. If the entire stock market tanks, you risk losing your job and stock portfolio at the same time.

You can see systematic risk play out with paparazzi, like the boom of the gold rush years and the crash when people stopped buying tabloid magazines during the recession. The downside of systematic paparazzi risk has become more severe in the last 10 years. It is harder for everyone to make money. Many paparazzi have left the business: after nearly 30 years of taking celebrity photographs, Baez moved back to the Dominican Republic in the summer of 2018, with his wife and son, to find new work.

Paparazzi – just like us?

The job of a paparazzo is riskier than most. But to some extent we all face some level of idiosyncratic and systematic risk in our careers, so we can learn a lot from these photographers.

The more systematic risk associated with your job, the more exposed you are

Suppose you want to change jobs from a safe, salaried support role to a sales job based on commission. Odds are you’ll earn more than you did in the salaried job because as a salesperson you will face both kinds of risk: it is a job with loads of idiosyncratic risk; for example, how much you earn will depend on your sales skills and the behavior of your clients (you can manage this risk by working in a team and having lots of clients). You will also face systematic risk because sales depend on the state of the economy.

Systematic risk is especially dangerous. In an economic downturn, your pay may be reduced or disappear entirely, it is likely to be harder to find another job, your assets might take a hit, and your partner’s income may be at risk too. The more systematic risk associated with your job, the more exposed you are.

Why we feel so much economic anxiety

The livelihood of the average paparazzo is threatened by major changes in the publication industry. The photographers manage idiosyncratic risk by forming unstable alliances, but the larger systematic risk that could wipe out their jobs is harder to manage. They could form a union and demand better terms from the agencies, but historically they struggle to cooperate with one another. And the paparazzi are not the only ones who face the risk that their jobs will no longer be viable.

One reason people seem to worry more about their economic future than they did in the past is that they sense more systematic risk in the job market. A few decades ago, most of the employment risk was idiosyncratic: conflict with the boss, a position that was a bad fit, a poorly managed company. If you lost your job, you could probably find another one just like it. Workers formed trade unions, banded together, and demanded better pay and benefits, confident that there was a need for their skills. The job market had its ups and downs, but risk seemed to be relatively easy to manage.

In today’s economy, systematic risk is more acute. There’s a chance technology – robots and artificial intelligence – could take over your job or at least require new skills you don’t have. If you lose your job during a recession, you may never find a similar one.

It is a larger trend that threatens everyone, but for paparazzi like Baez, the threat is more immediate. It is a risky business that is only getting riskier with fewer rewards.

This article is adapted from An Economist Walks into a Brothel by Allison Schrager, published by Portfolio.

To comment on this story or anything else you have seen on BBC Capital, please head over to our Facebook page or message us on Twitter.

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Make sure your kids grow up smart about money with these strategies

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9 things super-wealthy parents teach their kids about money

Money is big, and it’s all around us.

Adults, who have learned from experience about irresistible sales pitches, can find it hard to make good financial decisions. Imagine what it’s like for a wide-eyed 8-year-old to confront a dizzying array of choices. We know what can happen in the future if we don’t save.

Is it reasonable to expect a first-grader to understand the future consequence of present decisions?

In fact, you can teach kids to understand money, whether they’re 3 or 13.

And who better than you to deliver these lessons? After all, the family is the first place most of us learn about money. Over a third of respondents in the Invest in You Savings Survey said their financial role model was a parent. Men had a slight edge as the go-to parent: 19% of participants said it was their dad, and 18% said it was their mom.

Thomas Henske, a certified financial planner with Lenox Advisors, likes this metaphor.

“Why do we expect kids to know how to handle money when we don’t put it in their hands to let them practice?”
-Thomas Henske, CFP, Lenox Advisors

Imagine your kid wants tennis lessons. You drop him off at the courts, but you’ve neglected to bring one critical thing: a racket. So the fundamental component he needs in order to learn is missing.

The same analogy can be said for money. “Why do we expect kids to know how to handle money when we don’t put it in their hands to let them practice?” Henske said.

Most kids don’t stumble on money on their own.

“They get to college, and lacking experience with money leads to disastrous results,” Henske said.

Kids often don’t understand how credit works, so they sign up for a credit card at a school event and use it to pay for a pizza with their pals.

“Unless someone has been armed with some basic financial knowledge, that can turn into a ruinous situation,” Henske said.

Needs vs. wants

One of the biggest things you can teach young kids is the difference between needs vs. wants.

Any 7-year-old can see the difference between ordering a $3 soda in a restaurant and drinking water, which costs nothing. “Drinking is a need,” Henske said. “Drinking Coke or lemonade is a want.”

Patti Valeri, senior wealth strategist at PNC Wealth Management, recommends cluing kids into family discussions about other expenses, such as a car or an upcoming vacation. “Having the conversation sooner than later is important, even if it seems like it’s over their heads,” she said. Let them hear decision-making around how you spend money.

Rethink consumerism

Some families take living large literally. Wendy Juvenal Mays, 48, a criminal defense attorney, is the mother of six. She recently retired her law practice to spend more time with her family. “I couldn’t be the best at both, so now I stay home,” Mays said. On the side, she runs a podcast for families about financial independence.

Wendy Juvenal Mays, center, is always working on ways for her family of eight to live large on a budget.

With eight in the family, almost everything needs to be supersized, from meals to vacation plans to the size of their car, which needs to accommodate more people. Food is a challenge, and Mays says that getting meals on the table means stretching the budget creatively.

“We have to really think about consumerism,” Mays said. When she was folding laundry, she noticed that all the kids’ jeans had holes. Previously, she might have run out to buy more. Now she says she’ll mend the holes and they’ll all make do with what they have.

A family of eight living on one salary means living on less while still finding ways to live large.

When Mays’ husband was asked to chaperone a school trip to Disneyland, he asked if he could purchase additional tickets at a discount so the whole family could go.

When a relative passed away, it meant the family had to drive 14 hours, because flying would have cost $3,500. “Those are the choices we have to make,” Mays said.

Take care of yourself

Working while you juggle responsibilities and manage to pay for day care is a challenge for parents of younger kids. This stage can seem as if it will never end, Valeri said. Care is expensive, and generally people are at an earlier career stage, so they are earning less money.

Even amid a busy life with small kids, Valeri said you need to look after yourself so that you can be there for them. “Make sure you put money away for retirement and take full advantage of anything available,” Valeri said.

More from Invest in You:
What surprises people most about Roth IRAs
‘Adulting’ is like anything else: Something you can learn
What people wish they’d done before a tragic accident

Take full advantage of the company 401(k) plan if you have access to one. If you’re self-employed, use an individual retirement account.

Check out your company’s health-care options. Even if there are just a few plans to choose from, understand all the terminology so you grasp how the plan’s co-pays, deductibles and co-insurance all work. If you have access and can spare some more money, fund a health savings account to offset future health-care costs.

Lay a foundation

Nicholas Hartford, 32, didn’t want his son to grow up with the same bad money examples he’d gotten from his father, who spent freely but ran into financial difficulties.

Nicholas Hartford (right) and his son Skyler.

A field service engineer in Maryville, Tennessee, Hartford wants Skyler, 10, to understand money basics, from simple banking concepts to cost versus value. Spending can lead to a good outcome or to nothing at all, he said.

Both parents talk about cost and value in terms Skyler can understand. If a toy costs $20 or $30 but is likely to break within a few days, is it worthwhile spending that money?

For about a year the family has been holding regular monthly budget meetings.

Since then, Hartford has watched his son’s spending habits change.

“He wants things that have more value,” he said.

Some video games run as high as $60, and Skyler will look for ways to save up or earn money for these. He is more interested in cost and value.

Skyler can earn money doing chores, and he is tasked with managing the family’s $100 monthly lawn-care budget. When he wants something, his parents will ask him to look around the house to see what he can do — take out trash or do dishes, for instance — to earn the money.

“He will usually negotiate, and he understands that he needs to do something that helps out so he can get something.”

Hartford’s advice is to be patient.

“They’re coming from no knowledge at all on the subject,” he said. “We try to use basic terms and oversimplify things.”

Give an allowance

When it comes to how kids learn to handle money, the weekly allowance is critically important, Henske said — and he doesn’t believe in tying it to doing chores or getting good grades.

The allowance is a way to teach kids how money works, how to budget, how to plan their spending. “If you just give a kid money whenever he wants it, how does he learn?” Henske said.

When they are young, Henske recommends a dollar for each year, starting at age 10. They’d get $10. To parental objections that $10 seems like a lot of money, Henske asks parents to consider how much money they spend on their kids every week.

“Show me a parent who’s not spending $10 a week on their kid,” he said.

Learning about money and behavior are two separate conversations, and there will always be a reason to dock them. Use the allowance as a financial teaching tool and leave the emotions out of it.

Henske likes letting kids choose how to allocate money into three categories: spending, saving and charitable giving. Parents can match dollar-for-dollar or a percentage, depending on what matters most. To encourage kids to save, you could match by an equal amount. The spending jar generally does not receive a match.

“It’s such a personal thing,” he said. “A family might care more about donating time and volunteering than giving money to charity.”

Check out 4 Money Lessons Everyone Should Know by Age 25 via Grow with Acorns+CNBC.

Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.


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A 30-Year Look At America’s Money Since The End Of The Cold War

2017 AP YEAR END PHOTOS – U.S. President Donald Trump meets with Russian President Vladimir Putin at the G-20 Summit on July 7, 2017, in Hamburg. Trump and Putin met for more than two hours. (AP Photo/Evan Vucci)


November 2019 will mark the 30th anniversary of the official opening of the Berlin Wall by the East German and East Berlin government in 1989. That year witnessed world-shaking transformations taking place across the communist world. Now, the main adversary of the Cold War, the U.S.S.R., actually didn’t disintegrate until 1991. But the year 1989 marks a pivotal point, the point at which the international political settlement created after WWII — in which the liberal, capitalist West divided Europe and the world with the communist East — finally came to a definitive end. After more than 40 years, the specter of nuclear war up and vanished, and a whole slew of new governments took over in Europe.

In 1989, a wave of revolutions swept across the nations that had formed the communist Warsaw Pact, which for decades was pitted against the U.S. and its NATO allies. The Berlin Wall fell; communist parties across relinquished their monopoly on power; non-communist parties were elected and came to power; Soviet military forces withdrew from Eastern Europe, and also from Afghanistan after a decade-long war that’s often called “Russia’s Vietnam”; Soviet and American high commands agreed to limiting strategic nuclear weapons while President H. W. Bush announced the inauguration of a “new world order” in Sept. 1990.

The end of the Cold War was good news, of course, but it also marked the beginning of new uncertainties. The “Balance of Terror” during the Cold War did ultimately provide a degree of stability in international relations. With the disintegration of the Soviet Union from 1989 through 1991, the bipolar world of East vs. West, capitalist vs. communist, came to an end and new troubles quickly emerged — in the merger of East and West Germany, in the breakup of Yugoslavia and resulting wars, in the First Gulf War and at home in the U.S. in the form of an economic downturn.

Read on to find out how Americans’ money has changed since the end of the Cold War.

Kuwait City, Kuwait – April 1, 1991: Damaged tank on road with burning oil fire from Persian Gulf War. The invasion of Kuwait by Iraq caused an acute energy crisis, sending the price of oil skyward.


1. Brave New World: 1989 – 1995

The period got off to a rocky start during the crucial years of the disintegration of the Soviet Union. The U.S. entered a recession in July 1990, lasting eight months until March 1991, according to the National Bureau of Economic Research (NBER).

Several factors contributed to the onset of the early 1990s recession. One factor particularly tied to the time period was the impact on defense and defense-related industries of the ending of the Cold War. According to Federal Times, the early 1990s saw significant slashes to the Pentagon budget, the shutting down of many military facilities due to the Base Realignment and Closure Act, culminating in the so-called “last supper” in July 1993, in which the Deputy Defense Secretary William Perry informed industry leaders that they’d need to start tightening up their finances and eliminating overcapacity.

The early 1990s saw serious disruption in the realm of consumer spending when Americans were faced with the 1990 oil price shock. The principal cause was the Iraqi invasion of Kuwait, which not only eliminated Kuwait as a major supplier of oil, but also Iraq itself. On Aug. 6, 1990, the United Nations passed sanctions forbidding any country from importing oil from Kuwait or Iraq. As a result, the price of oil more than doubled, from $17.05 a barrel in June 1990 to $39.53 by Sept. 1990, according to the U.S. Energy Information Administration.

Americans felt the impact in their wallets. According to the Bureau of Labor Statistics’ Consumer Expenditure Survey, in 1989, Americans spent an average of $985 on gasoline and motor oil that year. By 1990, Americans were now spending more than $1,000 a year on gasoline and motor oil. Fortunately, the price shock didn’t last too long, and by Feb. 1991, the price per barrel of West Texas Intermediate (WTI) had fallen down to $19.28.

American incomes also experienced a rough ride during the final years of the Cold War and after. Based on data from Statista, the median household income in 1990 was $54,621, before dropping to a low of $52,334 by 1993 in the wake of the early 1990s recession.

In the end, the recession proved to be one of the shortest in the modern era, on par with the eight-month recession from 1957-1958, and the 2001 recession. The economy returned to 1980s level growth by 1993, fueled by the digital revolution, internet boom, low interest rates, low energy prices and a bourgeoning housing market. According to Census Bureau, by 1995, the median household income had rebounded to $54,600, less than in 1990, but significantly higher than the previous year and the lowest point in 1993 when the median income was $52,334.

The year 1995 would see the liftoff of the digital and dotcom boom so often associated with the 1990s. Indeed, according to the NBER, the expansion of the economy from March 1991 to March 2000 (120 months) is the longest period of economic growth in U.S. history, beating out the 106-month expansion of the 1960s, which was during the heyday of post-WWII American preeminence.

Here’s a look at the top grossing domestic movies of the period 1989-1995, according to Box Office Mojo, in unadjusted dollars:

  1. Jurassic Park – 1993: $357,067,947
  2. Forrest Gump – 1994: $329,694,499
  3. The Lion King – 1994: $312,855,561
  4. Home Alone – 1990: $285,761,243
  5. Batman – 1989: $251,188,924

Silicon Valley blew up in the latter half of the 1990s as the digital, and internet, revolution fueled the economic prosperity of the decade.


2. The Golden Years: 1995 – 2001

After the end of the early 1990s recession in March 1991, the U.S. entered a “Belle Époque”: A brief golden age, fueled by the growth and innovation of the Third Industrial Revolution in information and communications technology (ICT), and reflected in the romanticized, nostalgic sheen that Americans have thrown across that era from the late 1990s to the turn-of-the-millennium.

According to the Federal Reserve Bank of St. Louis, at the beginning of second quarter 1991, U.S. GDP was $6,126.86 billion (or $6.127 trillion). Ten years later, by the beginning of second quarter 2001, GDP had reached $10,597.82 billion ($10.6 trillion) — an increase of 73 percent in a decade. The U.S. economy went on a 120-month streak of sustained growth, the longest in history.

Incomes reflected the startling economic growth of America’s Belle Époque. Real household incomes were already on the upswing in 1995, having risen from $52,942 in 1994 to a median of $54,600 the following year, according to the Census Bureau. The surge continued to 1999 when median household income topped out at $60,062. As the dotcom bubble peaked and deflated, so did the economy, and median household income fell to $58,609 in 2001.

But like the Belle Époque in Europe — the time period leading up to the First World War in 1914 — wealth inequality grew substantially in America’s Belle Époque. According to Piketty’s “Capital in the 21st Century,” in 1990, the top 10% of earners accounted for about 40% of total U.S. national income. Over the course of the decade, the top 10%’s share of national income grew substantially, eventually accounting for over 45% of national income by 2000 — a level not seen since the late 1920s.

Yet it’s easy to miss this growing inequality when times are good, as they very much were in the latter half of the 1990s. And the good times could be seen not just in the private sector, but in the public. Over the course of the 1990s, the federal government, according to the Mercatus Center, cut federal spending down from 21.9% to 18.2% of GDP, all the while politically divided between the Republican-controlled Congress and the Democrat commander-in-chief, President Bill Clinton.

President Clinton and his Vice President, Al Gore, were both major proponents of the digital revolution and the adoption of the internet. This major development fueled a dramatic rise in stock prices. On Jan. 1, 1995, the Dow Jones closed at 3,867.41. Three years later, on. Jan. 4, 1998, the Dow closed at 7,580.40, which equates to an increase of 96%, just shy of doubling. Two years later, at the height of the dotcom bubble, the Dow closed at 11,722.98 on Jan. 9, 2000 — thus tripling over five years from 1995 to 2000.

The five top-grossing domestic films of the period 1995-2001:

  1. Titanic – 1997: $600,788,188
  2. Star Wars: Episode I – The Phantom Menace – 1999: $431,088,295
  3. Harry Potter and the Sorcerer’s Stone – 2001:$317,575,550
  4. The Lord of the Rings: The Fellowship of the Ring – 2001: $313,364,114
  5. Independence Day – 1996: $306,169,268

Brand new houses in the Maryland suburbs of DC. Speculation on the housing market, which was then institutionalized, was a primary engine of the stock market surge of the 2000s.


3. Sowing the Wind: 2001 – 2007

Expectations about the future ran high as the new millennium approached. The digital revolution that underpinned the economy’s boom, however, was also responsible for the growth of what would later be termed the dotcom bubble.

A great snapshot of the dotcom bubble can be observed in the fortunes of According to, Priceline went public at $16 a share in March 1999. On its first day of trading, the price rose to $88, before settling at $69, giving Priceline a market capitalization of $9.8 billion — making it the largest first-day valuation of an internet company to that date. Under the surface, however, Priceline amassed losses of $142.5 million in its couple of quarters. It was a hallmark of internet businesses of the day, promising to change the world while pursuing a strategy to attain ubiquity and corner a particular market.

As the fervor for internet businesses increased, the stock markets rose to dizzying historical heights. The Dow Jones peaked at 11,722.98 in Jan. 2000, a level it would not surpass for more than six years. Dotcom companies really ran up the tech-heavy Nasdaq, which peaked on March 10, 2000, at 5,048.62. Soon, however, time had run out for the dotcoms, as many businesses failed to create a realistic path for making money in the long-run. By April 2000, the Nasdaq had lost 34.2% of its value since its peak the month before.

If the dotcom bubble bookmarks the end of the belle epoque of 1995-2001, then the September 11 attacks in 2001 mark the beginning of the next period, which lasts from 2001 to 2007. The attacks by Al Qaeda shut down Wall Street trading. When markets reopened, according to Investopedia, the New York Stock Exchange (NYSE) fell 684 points, a 7.1% decline, which set a record at the time for the biggest loss in a single day of trading. At the close of trading that Friday, the Dow Jones was down nearly 1,370 points, for a loss of roughly 14%, while the SP500 closed having lost 12% of its value.

Related: The Financial Impact of the 9/11 Attacks

The 2001 recession was technically fairly short, lasting eight months from March to Nov. 2001, but the economy remained sluggish for years. It wasn’t until well into 2003 the SP500 turned around, and not until 2007 that it reached the highs attained during the dotcom bubble.

One of the main engines of the stock market turnaround would be the U.S. housing market. The collapse of the dotcom bubble sent many investors away from riskier tech stocks, towards more traditional and supposedly safer sectors. American housing, thus, seemed like a sound investment.

Indeed, housing was heating up after 2001, as residential construction soon soared above 5% of GDP. According to a report by the Center for Economic and Policy Research, by the peak of the building boom in 2005, residential construction accounted for 6.8% of GDP. All this building occurring while vacancy rates steadily marched upward, reaching a milestone level of 13.2% in the third quarter 2004 — well before the peak of the U.S. housing bubble.

At the same time, outside of the U.S., the War on Terror — initiated with the invasion of Afghanistan in Oct. 2001 — escalated and expanded into new theaters, namely, Iraq. Based on limited evidence of a connection to Al Qaeda, and idealist notions of bringing democracy to Iraq, the U.S. launched an invasion of the country on March 20, 2003.

Quick victory over the regular armed forces of Saddam, however, did not translate to peace. Irregular warfare began, and by 2004, the Insurgency was in full-swing. The military’s budget began to markedly rise year-over-year, with the Insurgency escalating into near-civil war in 2006. In 2007, the Department of Defense’s combined base and Overseas Contingency Operations (OCO)/Other Budget exceeded $601 billion for the first time, according to the Department of Defense.

Household incomes reflected the sluggish economy. According to the Census Bureau, median household income stood at $58,609 in 2001, before going on a three-year decline down to $57,674 by 2004. Then, as the U.S. housing market heated up to record temperatures in 2005, household incomes rebounded. In 2005, real median household income was up to $58,291; in 2006, it reached $58,746; and by 2007, at the peak of the housing bubble and business cycle, the real median household income had reached $59,534, the highest since 2000.

Yet, there were some people who already recognized the dangerous seeds that were being planted by the ballooning housing market, specifically in the proliferation of subprime mortgage lending. A combination of easy credit and lax lending standards; use of adjustable rate mortgages and innovations like interest-only mortgages, in which the borrower only pays the interest on the loan for a set period, after which they then have to pay the principal as well; securitization of subprime mortgages, which multiplied leverage exponentially, and therefore the potential impact of a downturn in the market; and the behavior of banks, which held onto these bad assets rather than trading them off the balance sheet and funded them in a fragile manner, and thus faced a liquidity crisis when these assets proved nearly worthless. If 2001 to 2007 saw the sowing of these potentially lethal seeds, the period 2007 to 2013 would witness their reaping.

The five top-grossing domestic films of the period 2001-2007:

  1. Shrek 2 – 2004: $441,226,247
  2. Pirates of the Caribbean: Dead Man’s Chest – 2006: $423,315,812
  3. Spiderman – 2002: $403,706,375
  4. Star Wars: Episode III – Revenge of the Sith – 2005: $380,270,577
  5. The Lord of the Rings: The Return of the King – 2003: $377,027,325

Signs from multiple reality companies hang in a neighborhood in El Cajon, California, on Sunday, Sept. 23, 2007. Sales of previously owned U.S. homes fell in August to a five-year low, extending a slump that threatened to stall economic growth. Photographer: Jack Smith/Bloomberg News


4. Reaping the Whirlwind: 2007 – 2013

The Great Recession of 2007-2009 really was the worst economic downturn since the Great Depression. According to the National Bureau of Economic Research, in the Great Depression, the U.S. economy contracted for 43 months, from August 1929 to March 1933. After this, the Great Recession clocked in at 18 months of contraction, from December 2007 to June 2009. Two other notorious post-WWII recessions — one from November 1973 to March 1975, and the other, July 1981 to November 1982 — saw the economy contract for 16 months.

The good news is that each of these historical recessions were followed by recessions that were significantly less severe. After the Great Depression, the economic contraction suffered during the “Roosevelt Recession” lasted less than a third of the time the Depression’s lasted. The recessions of 1980 and 1990-1991 each lasted eight months compared to 16 months of the recessions immediately preceding. Based on these historical patterns of some of the worst downturns, the next one will probably be comparatively milder than the Great Recession of the late 2000s.

The global financial crisis of 2007-2008 was set off by the collapse of the American housing market. When major investment banks like Bear Stearns and Lehman Bros. failed, they severely disrupted the global money market which had been operating for years on a circuit of round-tripping dollars, with Europe investing the most in U.S. housing via these investment banks. As the housing market imploded, the value of the securities based on these mortgages evaporated. This undermined liquidity for many domestic and international banks, causing inter-bank lending to dry up dangerously in 2007-2008 and bringing the global financial system to a halt.

While the American housing market was causing domestic woes, on the international stage, America’s War on Terror was reaching its climax. In 2007, amid near-civil war in Iraq, the U.S. increased military deployment and extended tours in the Iraq War, in a move that has been nicknamed “The Surge.” The U.S. military budget climbed over the years, reaching its peak in 2010, according to the Department of Defense.

Under President Obama, the U.S. began drawing down its forces from Iraq, officially ending operations in Dec. 2011. Across the board, the military budget declined significantly each year after 2010. American forces were reallocated to the Afghanistan theater, but overall, this period of time was one of military drawdown.

American households saw their incomes reach heights not seen in several years. According to the Census Bureau, median household income was $59,534 in 2007, the highest since 2000 when it had been $59,938. But when the bottom fell out of the housing market, dragging down the financial institutions that helped construct its faulty foundations, incomes plummeted. From over $59,000, household income fell to $54,569 by 2012, more than an 8% drop.

The American economy suffered a significant contraction during the Great Recession. According to the U.S. Bureau of Economic Analysis, U.S. real GDP stood at $15,761.97 billion ($15.76 trillion) in the fourth quarter of 2007. Less than two years later, real GDP had fallen to $15,134.12 billion ($15.13 trillion) by the end of the second quarter 2009, for a massive decline of 4%. Home prices would continue their decline until bottoming out in Feb. 2012, according to the SP/Case-Shiller U.S. National Home Price Index.

The 2007-2008 global financial crisis dealt America’s wealthiest a temporary blow, reducing their overall share in national income — but only briefly. Income inequality, as measured by the Gini index, a metric which ranges from 1 (representing total inequality) and 0 (representing total equality), was equal to 0.467 in 2007, according to the U.S. Census Bureau. By 2013, the Gini index had risen to 0.4811. By 2017, it had risen again to 0.4822, showing that despite the downturn of the Great Recession, the wealthiest still manage to keep the lion’s share of income for themselves.

The five top-grossing domestic films of the period 2007-2013:

  1. Avatar – 2009: $749,766,139
  2. Marvel’s The Avengers – 2012: $623,357,910
  3. The Dark Knight – 2008: $533,345,358
  4. The Dark Knight Rises – 2012: $448,139,099
  5. The Hunger Games: Catching Fire – 2013: $424,668,047

Counter-protesters chant and hold signs during the Unite the Right 2 rally in Washington, D.C., U.S., on Sunday, Aug. 12, 2018. The rally, being held in Lafayette Park near White House, marks the one-year anniversary of the Charlottesville, Virginia, rally where a car driven into a crowd of counter protesters killed 32-year-old Heather Heyer. Photographer: Aaron P. Bernstein/Bloomberg

© 2018 Bloomberg Finance LP

5. Fire Rises: 2013 – 2019

From the depths of the Great Recession, the U.S. economy marched forward, initiating a period of business expansion lasting from 2009 to now; if it continues to June 2019, this period of expansion will reach 120 months, and will thus tie for first place with the 1990s boom for the longest period of economic growth.

Yet America’s recovery was uneven. On paper, household incomes are looking great. According to the Census Bureau, real incomes have recovered, initially in big rebounds — from $55,613 in 2014 to $58,476 in 2015 — and then in smaller, though still sizeable increases — from $60,309 in 2016 to $61,372 in 2017. But looking beyond national averages reveals patchy recovery, weak growth and rising inequality.

For instance, Chicago is not a city often associated with the housing crash, versus, say, how Las Vegas, Miami or Phoenix are. Chicago home prices soared during the housing bubble just like they did in nearly every city, but unlike in many others, Chicago home prices have not recovered. According to the SP/Case-Shiller IL-Chicago Home Price Index, as of Jan. 2019, Chicago home prices are still down over 27% from their peak in March 2007, and the rate of appreciation is slow compared to the U.S. overall. In addition, according to the Bureau of Economic Analysis, Chicago’s GDP grew at a slower rate than the national average for metropolitan areas for all years from 2012 to 2017 with the exception of one:

Out of 383 metro areas tracked by the BEA, Chicago’s average annual GDP growth (3.3%) from 2012 to 2017 ranks No. 187. The top 10 fastest growing economies in terms of average yearly growth from 2012 to 2017 include the following metro areas:

  1. Bend-Redmond, Oregon: 9.6%
  2. Midland, Michigan: 9.6%
  3. Elkhart-Goshen, Indiana: 9.4%
  4. San Jose-Sunnyvale-Santa Clara, California: 8.8%
  5. Provo-Orem, Utah: 8.7%
  6. George, Utah: 8.3%
  7. Greeley, Colorado: 7.8%
  8. Austin-Round Rock, Texas: 7.5%
  9. Salisbury, Maryland: 7.1%
  10. San Antonio-New Braunfels, Texas: 6.8%

The 10 metro areas that have seen the worst growth, indeed outright decline in GDP on average, include the following:

  1. Lafayette, Louisiana: -4.4%
  2. Houma-Thibodaux, Louisiana: -3.7%
  3. Peoria, Illinois: -3.1%
  4. Anchorage, Alaska: -2.3%
  5. Farmington, New Mexico: -2.2%
  6. Watertown-Fort Drum, New York: -1.7%
  7. Longview, Texas: -1.4%
  8. Charleston, West Virginia: -1.3%
  9. Sierra Vista-Douglas, Arizona: -1%
  10. Pine Bluff, Arkansas: -0.8%

Several of the cities with negative GDP growth are facing potentially severe housing crises.

The tech industry, especially with the evolution of Web 2.0 in this period, fueled much of the economic growth in metro areas like San Jose and Austin. The latter city has experienced spectacular growth in recent years. According to the Census Bureau’s 2017 American Community Survey, Austin’s population currently stands at 916,906, up 20% from 2010 when the population was 764,129.

The U.S. stock market recorded solid growth from 2013 on, with the Dow Jones rising from 13,488.43 on Jan. 7, 2013, to a peak of 18,272.56 on May 11, 2015. After this, international uncertainties such as the Greek debt crisis and Brexit kept the Dow from achieving much growth for more than a year.

Finally, the stock market got a jolt from the election of Republican candidate Donald Trump. From closing at 17,888.28 on Oct. 31, 2016, the Dow Jones jumped about a thousand points in a week, to 18,847.66 by closing on Nov. 7, 2016. The Dow Jones went on a sustained march for over a year, reaching 26,616.71 on Jan. 22, 2018, before declining for the rest of the first quarter.

Though times have been technically good, the distribution of that prosperity is very uneven. The Economic Policy Institute’s appropriately named report “The new gilded age: Income inequality in the U.S. by state, metropolitan area and county,” makes it apparent that income inequality in America has reached levels not seen, ominously, since the late-1920s, just before the Wall Street Crash and Great Depression. The top-earning households are grabbing a greater share of national income while the middle class and those below take on more and more debt, most recently in the area of student loan debt and historic levels of auto loan debt. Younger generations, saddled with student loan debt, face difficult obstacles to homeownership, a key financial milestone that’s being increasingly put off by Americans these days.

The five top-grossing domestic films of the period 2013-2019:

  1. Star Wars: The Force Awakens – 2015: $936,662,225
  2. Black Panther – 2018: $700,059,566
  3. Avengers: Infinity War – 2018: $678,815,482
  4. Jurassic World – 2015: $652,270,625
  5. Star Wars: The Last Jedi – 2017: $620,181,382

The Bottom Line

So, how has Americans’ money changed since the end of the Cold War? In terms of real household income, Americans are earning more now than in 1989, $61,372 in 2017 vs. $55,329. However, this growth in income needs to be tempered by the simultaneous growth of income and wealth inequality during these years.

Income inequality had reached a historical low-point in the early-to-mid-1970s, right around the time of the 16-month 1973-1975 recession that marks the end of America’s post-WWII economic supremacy. Since then, income inequality has been on an inexorable rise, reaching levels not seen in this country since the Roaring ‘20s, when Wall Street was booming all the way until it crashed in 1929.

According to the Census Bureau, in the U.S. in 1989, the Gini index — a metric that measures income inequality from 0, which means total equality, to 1, which means total inequality — was 0.431. By 2017, it has increased dramatically, to 0.482 — an increase of 11.8%. Back in 1989, the top-5 percent of households accounted for 18.9% of total U.S. income. In 2017, this share had risen to 22.3% of national income. So, while real incomes, unemployment, GDP and other economic metrics have shown overall improvement, the progress has been uneven, creating greater and greater socio-economic inequality in the U.S. One could perhaps describe current conditions as ‘the best of times and the worst of times.’

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Savings mistakes to avoid at every age

Family birthday party

Compassionate Eye Foundation/Natasha Alipour Faridani/Getty Images

It’s never too early to start saving. Learning the true value of money can never come soon enough. Whether you’re self-taught or have loved ones who can show you the way, making important savings steps is vital to your financial future.

To be sure you’re on the right track, learn from other people’s mistakes. Nick Holeman, CFP, a senior financial planner at Betterment, says it’s important for people to build good savings habits as early as possible — even in your teenage years.

“If you’re a parent with a teenager, this is a good time to open a joint checking account,” Holeman says. “Teach your teens how to manage money, budget and track their spending. Encourage your teen to open an IRA when they get their first job.”

Regardless of age, there are certain mistakes to be mindful of at every age.

Savings mistakes to avoid for 20-somethings

Graduating college and dealing with the burden of student loan debt can make you feel like you barely have enough to make ends meet, let alone stash money away. Dawn-Marie Joseph, president and founder of Estate Planning Preservation in Williamston, Michigan, believes an emergency savings fund is critical at this stage.

“Recently, I was working with a college graduate who is paying $500 per month in student loan repayment,” Joseph says. “Bills like this can be overwhelming and take your focus off the future. Building an emergency savings can help with the loss of a job or vehicle repair.”

Joseph recommends putting money into a savings account from every paycheck, even if it’s only $5 or $10. It will add up.

Holeman notes that putting off retirement savings can hurt, too.

“It might seem like it’s a long way off, but the time to start saving for retirement is in your early 20s,” Holeman says. “Is a 401(K) or other retirement plan offered by your employer? If not, open an IRA and start making that money work for you.”

Savings mistakes to avoid for 30-somethings

Life in your 30s is much different than your 20s. Your job might be a little more stable. Your paycheck might be a bit higher than it was a decade ago. Your goals might be different, too. Maybe you want to buy a home or expand your family.

“Supporting children is a big expense,” Joseph says. “You’re likely still paying down your education debt, but you’ll have to learn how to manage new expenses as well. This is when you’ll need to develop a savings habit.”

It might be hard to factor in the added cost of a child, but it’s possible once you budget for it. Restructuring your budget is important for any major change in your life, so research those expenses and crunch the numbers and figures beforehand so you’re not caught off guard.

If children aren’t in your plans, but buying a home or getting married are, you should still lay out a budget reflective of those lifestyles.

“Whether it’s a wedding, a house, a big trip or college for your kids, each of these goals has a different amount needed and a different time horizon,” Holeman says. “Decide which of these goals is most important to you and how much you have to save each month to achieve them.”

Instead of having a regular savings account, look into high-yield savings accounts. These are accounts that pay a higher annual percentage yield than traditional savings accounts. The best offers are more than 2.00 percent. Try to find accounts that charge low or no fees as well. The less money taken out for fees, the more you can save for the big milestones to come.

Savings mistakes to avoid for 40-somethings

Retirement feels closer than it did a few years ago. By now you may have a solid hold on your budget. You’re trying to save but might not be doing as well as you think you are.

“Your 40s are when your financial responsibilities become palpable,” Holeman says. “One of the biggest mistakes people in their 40s make is not countering ‘lifestyle creep.’”

Lifestyle creep is when you start to spend more as you earn more. While earning more money is great, that doesn’t mean you should overspend to keep up with the Joneses. Live within or below your means and save for major financial goals.

Those goals may include helping your children pay for college tuition, retirement or paying off your house. Instead of spending more, keep saving for your future or those of your loved ones.

Savings mistakes to avoid for 50-somethings

If you have children on their way out of college, do they know how to handle the financial responsibilities of adulthood?

“Take the time to have a serious discussion with (your kids) about what they plan to do after graduation,” Holeman says. “It’s great to help out your children, but you’ll want to make sure you’re not jeopardizing your own security.”

That means you don’t want to jeopardize your own retirement by helping your children start their own lives after school. Set clear rules and expectations. Continue to put as much away for retirement as possible. And use any extra money to make catch-up contributions to your accounts.

Holeman also suggests having the difficult but necessary conversation about death.

Estate plans provide a roadmap for important decisions regarding your health and assets, and generally cover two phases: before and after your death,” Holeman says. “By having one in place, you’ll remove any ambiguity around your wishes when it comes to protecting your family, loved ones and assets, in case you’re unable to do so.”

Savings mistakes to avoid for 60-somethings and beyond

Your best working years are behind you, but that doesn’t mean you need to stop working. But you should still plan ahead.

“At this age, the biggest mistake is underestimating your needs,” Holeman says.

Those needs won’t be what they were 10 or 20 years ago. Consider rising healthcare costs and downsizing your living space. Evaluating how you’re living or planning to live will impact your savings.

“In order to make sure your bases are covered, budget for the ‘boulders’ in your life — the large or recurring items you prepare for monthly, such as your rent, mortgage or car payment,” Holeman says. “Once that’s done, monitor your personal checking account for how much is safe to spend until the next month.”

At this stage in life when your income is more fixed or even reduced, it’s important to watch your budget closely, save for unexpected expenses and cut back on spending.

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3 Economists Share Their Personal Retirement Strategies — and Their Biggest Money Mistakes

Have you ever wondered how people who work with money spend their money?

Here at MONEY, we did. So we interviewed three economists about they manage their their personal finances: everything from their saving strategies, what they like they to spend money on, how they prepare for retirement, and what their biggest money mistakes have been. Are they much better-off than the rest of us thanks to their extensive knowledge about personal finance and the economy? Their answers may surprise you.

All three take different approaches to their financial lives, but have managed to set themselves up to be relatively comfortable in retirement and save responsibly, even if they splurge now and then. One was never that worried about saving and tries not to overthink her finances; one has more retirement accounts than the average person can keep track of, and one said that the way her family handled money when she was young influenced her to become a super saver.

Monique Morrissey

Retirement economist at the Economic Policy Institute

Money style:

Monique Morrisey, retirement economist at The Economic Policy Institute

Monique Morrissey, 52, a retirement economist at The Economic Policy Institute, had a string of low-paying jobs at non-profits when she started out in the working world, but she was never much of an obsessive saver. She lived off her student stipend and borrowed money from her brother to make rent every month during grad school.

“I’m pretty hands off,” says Morrissey of her money style. “I think I’m fairly typical.” Most years she has been able to max out her 401(k) to the legal contribution limit, but this year she neglected to bump it up when she hit the age limit for catch-up contributions, which allows people who are 50 and over to add an additional $6,000 each year (the regular contribution limit is $18,000).

In terms of other savings, Morrissey has money sitting in a handful CDs that she is “too lazy to deal with.”

“It stays there getting very low interest — that’s kind of stupid,” she acknowledges. But she is married to someone who has a secure union job, so Morrissey is one of the lucky Americans who can still rely on a pension to enjoy a comfortable retirement. Pension aside, she points that out being hands-off — within reason — has it’s benefits.

“Hands-off is sometimes considered good. You don’t want someone trying to time the market,” Morrissey says, referring to everyday investors who believe they can determine when the market will rise and fall and therefore take their money out at the “right” time. But research over the past few decades shows that people who put money in the market and leave it there as long as possible fare much better than those who take out funds during a moment of panic over losses or a moment of euphoria about recent gains.

The benefit of a “set it and forget it” mindset like Morrissey’s helps you maximize the benefits of compound interest — when you earn interest on the interest of your original sum of money, creating a snowball effect that helps your money grow, a key to building up a sizable retirement nest egg.

Overall, Morrissey says she spends her money on travel (her family’s favorite splurge) and convenience, rather than expensive products or cars.

“We’re thrifty in terms of our possessions,” she says, “On the other hand, what we pay for is garage space. We don’t have a lot of time, so we tend to spend on anything that saves time.”

The 1 Money Regret:

Until recently, Morrissey was invested in a less than ideal 401(k) plan offered by employer — it had high-fees thanks to the plan’s administrator. Excessive fees can cost workers thousands of dollars over a lifetime, eating into your hard-earned retirement cash. But an internal push from employees to find an alternative to the company’s costly provider changed that. Now Morrissey and the rest of her organization have excellent 401(k) plans, a retirement-savings win for everyone.

Her company contributes a generous 9.25% to their employees’ 401(k) accounts annually — and it is not contingent on the employees contributing to their 401(k) themselves. So Morrissey can contribute $0 to her account every year and still receive her employer match, which is rare. Most companies these days require workers to contribute a certain percentage of their salary in order to qualify for the company match. The average company match these days is around 4.1%, according to Fidelity.

“That was a responsible thing to do, continuing to push on that,” Morrissey says. “There were many years where I was paying higher fees than necessary.”

Jeffrey Miron

Director of economic studies at the Cato Institute, Director of undergraduate studies in the Department of Economics at Harvard University

Jeffrey Miron, director of economic studies at the Cato Institute and the director of undergraduate studies in the Department of Economics at Harvard University

Money Style:

Jeffrey Miron, 62, director of economic studies at the Cato Institute and the director of undergraduate studies in the Department of Economics at Harvard University, takes a definitively more hands-on approach to his retirement strategy than Morrissey.

“I did open a 401(k) as soon as I was able to too, and an IRA as soon as I had an income,” says the Harvard economist, who teaches a personal finance class there in the spring.

“I don’t have every single possible flavor, but I have a lot,” he says of the myriad retirement savings vehicles he has contributed to over his career: 401(k), 403(b), 401(a), a 457 plan, traditional IRA, ROTH IRA, SEP IRA, and a Keough. That may be overkill for some people, but Miron likes to capitalize on as much tax-advantaged savings as possible. He has been able to contribute the maximum amount to to all of his retirement accounts without it negatively impacting his standard of living.

But even if you can’t afford to max out your accounts, the one time it always makes sense to max out is when your employer matches your contribution, because you double your money automatically with an employer match, he says.

Given his own treasure trove of retirement accounts, one of his biggest sources of personal woe comes from seeing just how many people, friends and family included, don’t contribute enough to the tax-deferred retirement accounts available to them.

“I’m always stunned at how many people are not [contributing to tax-deferred retirement accounts] because they want to spend more now and don’t want save it,” he says. “The return is so much better on tax deferred savings, and particularly when you get an employer match.”

Miron likes to spends his money playing “interesting golf courses” and traveling to see his children.

The 1 Money Regret:

One of Miron’s biggest regrets? Never cashing in on the Bitcoin craze — though he may have ended up on the right side of that regret given the volatility of crypto currency markets over the past few years.

“I asked my wife if we could put $1,000 in it, and she said ok,” says Miron. “But you couldn’t buy it very easily. You had to set up a bank account in Japan.”

Romina Boccia

Economic expert at The Heritage Foundation

Romina Boccia, economic expert at The Heritage Foundation

Money Style:

When Romina Boccia, 34, an economic expert at The Heritage Foundation, was growing up in Germany her family always gave monetary gifts during holidays like Christmas, which instilled the value of money to her at a young age.

“My grandma always emphasized importance of saving in order to have independence, and a rainy day fund so you don’t end up in trouble when you are in trouble,” she says.

She also got a nudge from her education: At her German elementary school, local bankers came to her class and gave the students savings books and piggy banks, and if they kept track of their savings after a few months, it was deposited into an account the banks opened for them.

When it comes to saving for retirement, she has a 403(b), which is a 401(k) equivalent for non-profits, an IRA and an Health Savings Account. She maxes out her HSA first because it’s “the account where I can most easily access my money if I need it,” followed by her 403(b) which she maxes out when she can afford it. She puts money into her IRA last.

Her advice to friends and family is to max out their own HSA accounts, which she believes is an under-utilized retirement savings vehicle. When you put money into an HSA you can deduct it from your taxes, it then grows tax-free, and your withdrawals for qualified expenses do not incur any taxes, either. More popular retirement accounts like 401(k)s and IRAs are not tax-exempt and have penalties for early withdrawals. For Boccia, it’s a no brainer.

“That’s more money in your pocket that you can save,” she says. “The benefits are just that much better.”

The 1 Money Regret:

Boccia is working on becoming comfortable spending more money. She worked full-time through college and graduate school to avoid having any student loans, but it took a toll on her personal life.

“It was rough, because I didn’t have time for social activities because I was either studying, in class or working,” she says. “But I knew that time would come to an end.”

Now, she uses more of her money to travel in her free time and knows she will be able to continue to do so comfortably in retirement. “I realized I was saving too much and withholding the simple pleasures of life,” she says. The only debt she ever incurred was for the mortgage on her house, which she continues to improve and considers an investment.

While she has time to make up for a few lost vacations, a money mistake she made early on was not negotiating a higher starting salary at her first job, the consequences of which can last over the course of your career, and ultimately impact your ability to save for your golden years.

“I think it depressed my earnings for at least two years, and that’s just money that I will never recoup,” she says. “I’m sure I left money on the table by making a lowball offer.”

That’s something you can change if you are proactive in your own career, she says. After learning she was being paid less than her colleagues, she asked her boss to have a conversation about her compensation.

“I asked my supervisor for lunch and prepared a report on the responsibilities that I had taken on, the work I had performed, and what I thought I had done well to make the case,” says Boccia.

What started as a money mistake became a moment of professional success when her boss offered her the raise. And she’s working on spending it — but never at the expense of saving for retirement or taking on debt, she emphasizes.

“I realized that life is finite,” she says. “I spend most of my money on travel now. This is what I enjoy the most and that’s an expenditure that I’m happy to make.”