MONEY Retirement

These Simple Moves By Your Employer Can Dramatically Improve Your Retirement

150512_RET_MillennialSaving
Sarina Finkelstein (photo illustration)—iStock (2)

Easy enrollment procedures and automatic escalation of contributions dramatically increase 401(k) participation rates and savings.

Nearly four decades into the 401(k) experiment, employers and policymakers may finally understand how to get the most from these retirement accounts—and it all boils down to a principle that Warren Buffett has long espoused: Keep it simple.

Nothing promotes participation and sound investment practices in 401(k) plans more than simple plan choices, according to a report from Bank of America Merrill Lynch. Last year, 79% of workers offered Express Enrollment in Merrill-administered plans followed through and began contributing to their plan. That compares to just 55% who enrolled after being offered a more traditional experience requiring choices about investment options and deferral amounts, Merrill found.

These findings jibe with other research that has found that inertia is most workers’ biggest obstacle to saving for retirement. A TIAA-CREF survey found that Americans spend more time choosing a flat-panel TV or a restaurant than they do setting up a retirement account. The Merrill report underscores the inertia factor, noting that, when considering how much of each paycheck to contribute, workers typically just choose the first rate listed.

Features like automatic enrollment and automatic escalation of contributions, with an opt-out provision, turn inertia into an asset. These features are now broadly employed and have greatly boosted both participation and deferral rates. Among companies with a 401(k) plan, 70% have some kind of auto feature, reports benefits consultant Aon Hewitt. Merrill found that plans with auto enrollment had 32% more participants, and those with an auto escalation feature had 46% more participants increasing their contributions.

Merrill oversees $138 billion in plan assets for 2.5 million participants and credits simplified enrollment for big gains in the number joining a plan or contributing more. The number of employers adopting Merrill’s simplified Express Enrollment more than doubled last year. Meanwhile, the number of participants raising their contribution rate jumped 18%.

A key feature of any simplified enrollment system is that workers are put into a diversified and age-appropriate target-date mutual fund, or some other option with similar characteristics, and that they begin deferring 5% or more of pay—generally enough to fully capture any employer match. Many employers also add auto escalation of contributions to keep up with raises and inflation—or to catch up if the initial deferral rate was lower. In many plans, the default rate is just 3% of pay.

Merrill found that 64% of employers now have plans with both auto enrollment and auto escalation. One in four employers who did not have both plan features in 2013 did last year.

Taking simplification further, more employers are now using the annual health benefits enrollment period to educate workers about 401(k) plans, Merrill found. As a result, twice as many workers enrolled in a plan or raised their contribution rate the second half of 2014 vs. the first half—a trend that Merrill says has been in place for several years.

 

 

 

 

MONEY Kids and Money

Why Mothers Know Best About Money

150507_FF_MomKnowsBest
Jamie Grill—Getty Images

Eight in 10 Americans say they learned something about money from Mom. That's good, because Dad may have been a tad overconfident.

Moms deserve a lot of credit for the things they teach kids about money, and with Mother’s Day this weekend what better time to celebrate their financial tutelage? More than eight in 10 Americans say they learned something about money from their mother, a new survey shows.

The chief overall lesson: live within your means. That motherly wisdom was cited by 55% in the survey from BeFrugal.com. The same percentage said she taught them the difference between a want and a need. Some 44% said Mom emphasized the importance of being self-sufficient. Mom also taught them how to shop wisely: 67% said she taught them about sales, and 57% said she taught them about coupons.

These findings jibe with other research on the subject. A few years ago, TD Bank found that in many families Dad doles out allowance and oversees big purchases, and that Dad tends to be the most confident about money and most interested in results. Meanwhile, Mom is most interested in the kids’ money learning process and the day-to-day aspects of financial management.

Mom’s softer approach to money lessons probably stems from motherly wisdom in many areas. Life lessons like “don’t be late” and “practice, practice, practice” and “don’t be afraid to ask for help” and many others have direct application to the money world. After all, it’s sage advice indeed to never make a late payment and to seek advice on complicated money matters.

Given the financial mistakes that many parents have made—poorly managing credit cards, for example—some argue that young adults would do better to skip parental advice altogether and find a financial adviser or third-party online advice. But the best advice is probably to listen to both Mom and Dad. They often see financial matters differently. That’s natural—opposites attract. And through discussion and compromise, your parents probably run the household finances better together than either one would alone.

That’s good since kids—and even young adults—seem to depend on both Mom and Dad for financial advice. Two surveys last fall, one by Fidelity Investments and the other by TIAA-CREF, show that Millennials seek out their parents more than anyone else for financial guidance. Fidelity identified parents as their top choice for trusted money advice. TIAA-CREF found that 47% view their parents as especially influential in money matters.

So here’s to all the moms out there, imparting financial wisdom in ways only they seem able—and for being an important counter balance to all the fathers with misplaced confidence in their own money skills. Several studies have shown that women make better investors. But let’s give a nod to dads too. Embracing risk and a focus on results have their place, and the balance that both parents produce may be the best lesson of all.

Read next: What Dads Can Do to Really Help Mom This Mother’s Day

MONEY 401(k)s

1 in 3 Older Workers Likely to Be Poor or Near Poor in Retirement

businessman reduced to begging
Eric Hood—iStock

Fewer Americans have access to a retirement plan at work. If you're one of them, here's what you can do.

A third of U.S. workers nearing retirement are destined to live in or near poverty after leaving their jobs, new research shows. One underlying cause: a sharp decline in employer-sponsored retirement plans over the past 15 years.

Just 53% of workers aged 25-64 had access to an employer-sponsored retirement savings plan in 2011, down from 61% in 1999, according to a report from Teresa Ghilarducci, professor of economics at the New School. More recent data was not available, but the downward trend has likely continued, the report finds.

This data includes both traditional pensions and 401(k)-like plans. So the falloff in access to a retirement plan is not simply the result of disappearing defined-benefit plans, though that trend remains firmly entrenched. Just 16% of workers with an employer-sponsored plan have a traditional pension as their primary retirement plan, vs. 63% with a 401(k) plan, Ghilarducci found.

Workers with access to an employer-sponsored plan are most likely to be prepared for retirement, other research shows. So the falling rate of those with access is a big deal. In 2011, 68% of the working-age U.S. population did not participate in an employer-sponsored retirement plan. The reasons ranged from not being eligible to not having a job to choosing to opt out, according to Ghilarducci’s research.

She reports that the median household net worth of couples aged 55-64 is just $325,300 and that 55% of these households will have to subsist almost entirely on Social Security benefits in retirement. The Center for Retirement Research at Boston College and the National Institute on Retirement Security, among others, have also found persistent gaps in retirement readiness. Now we see where insufficient savings and the erosion of employer-based plans is leading—poverty-level retirements for a good chunk of the population.

At the policy level, we need to encourage more employers to offer a retirement plan. On an individual level, you can fix the problem with some discipline. Even those aged 50 and older have time to change the equation by spending less, taking advantage of tax-deferred catch-up savings limits in an IRA or 401(k), and planning to stay on the job a few years longer. That may sound like tough medicine, but it’s nothing next to struggling financially throughout your retirement.

MONEY Financial Education

Kids and Money: The Search for What Really Works

piggy banks with chalkboard saying "savings 101"
Getty Images

A new study aims to understand the effectiveness of the money lessons kids learn in school.

Those who oppose integrating financial education into our nation’s classrooms have long argued money lessons don’t actually change behavior. Slowly, evidence to the contrary is emerging. But much more proof is needed before personal finance will be taken as seriously as math, science, or history.

That line of thinking underlies a new $30 million commitment from professional services firm PwC, which in 2012 launched its Earn Your Future program, designed to help educators gain the tools and knowledge they need in order to teach kids about money. PwC pledged $100 million worth of service hours from its employees and $60 million in cash over five years.

This new commitment is all cash, and a good chunk of it takes aim at a research void: finding what teaching methods and strategies result in lasting behavior change among students who study personal finance. PwC has teamed with two major universities to analyze financial education programs in grade schools and colleges with the goal of understanding how students learn and apply money lessons.

“Financial capability techniques are still evolving,” says Shannon Schuyler, corporate responsibility leader at PwC. “We need to make sure that as we are implementing them into classrooms, we are measuring their effectiveness and adjusting our strategy and approach based on the findings from sound research.”

Critics say this may all be a waste of resources. They argue that marketing messages overwhelm the common sense you might learn as a young student, and that the financial landscape changes so fast that anything you learn about, say, bank fees and cell phone packages quickly becomes obsolete.

Such issues have been studied for years. We have a global library of some 1,400 papers on the subject. But only recently has this research begun to hone in on what really works. In a groundbreaking study in February, researchers at the University of Wisconsin Center for Financial Security tied personal finance lessons in school to higher credit scores among young adults. Other recent research sponsored by H&R Block found remarkable attitude changes in students following a nine-week personal finance course, including that 92% said learning about money management was very important and 80% wanted to learn more.

The new PwC commitment will also fund research into how iPads and other mobile technologies can speed learning of financial concepts—even as the firm sets aside more funds for good old-fashioned learning from print. A colorful six-page magazine through Time for Kids, Your $, spotlights financial literacy for kids. The print version is being distributed in New York schools and will roll out in Chicago this month. It is also available online.

Policymakers in the U.S. and around the world are embracing financial education as a way to help prevent or minimize the effects of another financial crisis. In the U.S., the Obama administration has made its priorities clear—it wants clean data that can be analyzed and used to find proof of financial education strategies that work. We seem to be moving that direction.

MONEY

The 5 Numbers You Need to Know to Get a Handle on Your Money

If they mean nothing to you, it's time to get better acquainted with your money

Do you really know your money? You would be surprised how many people don’t know anything about their all-important relationship with their finances. You may think you’re pretty financially savvy, but if you can’t answer these five questions you may need to get better acquainted with your money.

1. Monthly Income

This may seem very basic, but more often than not people can’t answer how much money comes into their home. That means knowing the gross and net income. Almost everyone knows what their salary is, roughly, but when it comes to pre- and post-tax income per month, many people have no clue. Look at your next paystub and take note of both your gross (pretax) and net (post-tax and other deductions) pay. This knowledge really comes in handy when putting together your budget.

2. Monthly Expenses

This one goes hand-in-hand with knowing your monthly income. While knowing how much you have coming in each month is important, it’s equally important to know how much you have going out. Get a grip on your expenses. Take the time to write down everything you spend your money on in a given month. You’d be surprised what expenses you have over and above your rent/mortgage, car, utility and insurance payments. An understanding of your expenses can help you identify areas where you’re overspending and can reveal new ways for you to save. If you want to have a well thought out and effective budget, knowing both your income and expenses is pivotal. Without this knowledge, you won’t know what you can (and can’t) afford and you could easily spend beyond your means.

3. Net Worth

You may think that a ‘net worth’ is only for wealthy people. Not so fast: Net worth, simply put, is the difference between what you own and what you owe. This begins with your bank account, income and expenses. Assets such as investments, cars and real estate all factor in to your net worth as well. Knowing your net worth provides you with a straightforward financial snapshot. If your number is positive, you can give yourself a pat on the back. If it’s negative, you might want to take a closer look at your finances so you can diagnose the problem, and create a plan to get you into the positive.

4. Debt-to-Income Ratio

While your net worth compares all of your assets to what you owe, a debt-to-income ratio shows you specifically how much debt you have compared to how much money you’re making. The first step to figuring this out is to pull up your credit report (to get the most accurate estimate pull it from all three bureaus, in case there is a debt that is reported to one and not the others; also make sure there are no errors in how your debts are reported). Once you’ve checked your free annual credit reports, you can monitor for changes to your credit reports every month by getting a free credit report summary on Credit.com. Tally up your monthly debt payments, and divide them by your gross monthly income (money before taxes and other deductions). As you could have guessed, the lower this number is the better off you’ll be. Ideally you want to keep that number below 35%.

5. Your Invested Income

You may know the number in your savings account, (this is invested income, too, despite the small return) — but do you know if you’re making the most of your money? Ask yourself what your money is doing for you. Is it sitting in the bank to use for a rainy day, or is it working to make you more money? Work with a trusted adviser to come up with a plan. Even if you’re just starting out with your first job, wrangle your money and make it start working for you. If you already have some investments, ask yourself if you know what the money is invested in, not just the old, “oh, it’s in an IRA.” Know who manages it, what you earn, what the money is invested in and what kind of returns you get. The younger you are, the more freedom you have to make that young money work hard to earn you the most possible future money.

Finally, your money should be in line with your future goals. Know what those goals are and the compatibility with your money. Saving money alone is not enough when it comes to having good financial health. You have to make sure you’re paying attention to what amount of your savings is for what, and whether you’re not on track for the big things.

When it comes to managing your money, it’s easy to get overwhelmed if you don’t really know your money. Between knowing all the terms and numbers, you can quickly lose track and get discouraged. However, if you take the time get to know your money and how it impacts your life, it’ll be easy to see that financial health comes down to being in the know. So the next time you want to have a close relationship with your money situation, take a deep breath, and jump in as if you were interviewing your money for a job … to work for you.

More from Credit.com:

This article originally appeared at Credit.com.

 

TIME Taxes

Here’s How Unlikely It Is the IRS Will Actually Audit You

But fines and jail time still await tax frauds

Here’s something the IRS probably doesn’t want you to know: Our entire tax code mostly works on the honor system. The much-feared agency only audited 0.86% of individual tax returns in 2014, the lowest percentage since 2004, Bloomberg reports. Among households with incomes greater than $1 million, 7.5% were audited.

The auditing rate is falling because the IRS is bleeding employees. By 2014, the number of revenue agents had declined 16% from its 2010 peak, to 11,629. It’s a trend that IRS Commissioner John Koskinen called “deeply disturbing” in a Tuesday speech.

At its peak efficiency, the IRS was auditing about 1.11% of individual returns back in 2011. Even if those figures seem small, getting caught committing tax fraud can result in heavy fines or jail time—which seems to be enough to keep most citizens honest.

[Bloomberg]

MONEY Kids and Money

The High School Class That Makes People Richer

Graduates with $$ on their caps
Mark Scott—Getty Images

Kids really do benefit from learning about money in school, new data show

Most experts believe students who study personal finance in school learn valuable money management concepts. Less clear is how much they retain into adulthood and whether studying things like budgets and saving changes behavior for the better.

But evidence that financial education works is beginning to surface. Researchers at the Center for Financial Security at the University of Wisconsin recently found a direct tie between personal finance classes in high school and higher credit scores as young adults. Now, national results from a high school “budget challenge” further build the case.

Researchers surveyed more than 25,000 high school students that participated in a nine-week Budget Challenge Simulation contest last fall and found the students made remarkable strides in financial awareness. After the contest:

  • 92% said learning about money management was very important and 80% wanted to learn more
  • 92% said they were more likely to check their account balance before writing a check
  • 89% said they were more confident and 91% said they were more aware of money pitfalls and mistakes
  • 87% said they were better able to avoid bank and credit card fees
  • 84% said they were better able to understand fine print and 79% said they were better able to compare financial products
  • 78% said they learned money management methods that worked best for them
  • 53% said they were rethinking their college major or career choice with an eye toward higher pay

These figures represent a vast improvement over attitudes about money before the contest, which H&R Block sponsored and individual teachers led in connection with a class. For example, among those surveyed before and after the contest, those who said learning about money was very important jumped to 92% from 81% and those who said having a budget was very important jumped to 84% from 71%. Those who said they should spend at least 45 minutes a month on their finances jumped to 44% from 31%.

The budget challenge simulates life decisions around insurance, retirement saving, household budgets, income, rent, cable packages, student loans, cell phones, and bank accounts. Teachers like it because it is experiential learning wrapped around a game with prizes. Every decision reshapes a student’s simulated financial picture and leads to more decision points, like when to a pay a bill in full or pay only the minimum to avoid fees while waiting for the next paycheck.

Block is giving away $3 million in scholarships and classroom grants to winners. The first round of awards totaling $1.4 million went out the door in January.

The new data fall short of proving that financial education leads to behavior improvement and smarter decisions as adults, and such proof is sorely needed if schools to are to hop on board with programs like this in a meaningful way. Yet the results clearly point to long-term benefits.

Once a student—no matter what age, including adults—learns that fine print is important and bank fees add up she is likely to be on the lookout the rest of her life. Once a student chooses to keep learning about money management he usually does. Added confidence only helps. Once students develop habits that work well for them and understand pitfalls and mistakes, they are likely to keep searching for what works and what protects them even as the world changes and their finances grow more complex. Slowly, skeptics about individuals’ ability to learn and sort out money issues for themselves are being discredited. But we have a long way to go.

 

MONEY IRAs

This Innovative Idea Could Improve Your Retirement

State governments are starting to step in to help workers save. Here's why that's a good thing.

A rare innovation in retirement saving is taking shape right now in, of all places, Illinois. In January the state became the first to okay an automatic IRA for workers at certain small businesses that don’t offer retirement plans. Those companies will be required to funnel 3% of their employees’ paychecks into a state-run Roth IRA, though workers can opt out.

It may seem surprising that Illinois is breaking ground in this area—after all, the state’s pension plans are among the worst funded in the nation. But Illinois is actually part of a broad movement. Some 30 states, including California and Connecticut, are developing similar savings programs. Says Sarah Mysiewicz Gill, senior legislative representative at AARP: “We’re reaching a critical mass of states.”

A Local Approach

Why are states taking on retirement planning? Half of private-sector employees don’t have an employer plan—a crucial tool for building a nest egg. In fact, just having access to a retirement plan through work makes a huge difference in whether you save. While 90% of those with a workplace plan have put aside money for retirement, only 20% of those without one have, according to the Employee Benefit Research Institute.

So states will face a huge drain on their budgets as workers with no savings reach retirement and need services such as Medicaid and food assistance. “If Washington were moving faster on this, the states wouldn’t have to,” says Illinois state senator Daniel Biss, who sponsored the new IRA.

No question, Congress has long dodged addressing the looming retirement crisis; it has failed to fix Social Security or create a federal automatic IRA, which President Obama proposed again in his most recent State of the Union address. Obama did introduce the myRA last year, which will allow savers without employer plans to put away as much as $15,000 in Treasury securities. But without auto-enrollment, the myRA’s effectiveness will be limited.

The Illinois program may prove to be an appealing prototype. (First it will need approval by the Department of Labor and IRS.) Still, each state is crafting its own version. In Connecticut, the automatic IRA may be paid out as a lifetime annuity or in a lump sum. Indiana is looking at setting up a voluntary plan with a tax credit. “States are a great laboratory for experimentation,” says Kathleen Kennedy Townsend, founder of Georgetown University’s Center for Retirement Initiatives.

Reason to Hope

Of course, it’s far from certain that state savings plans will make much headway: at 3%, Illinois’s minimum contribution is far below the 10% to 15% of pay that retirement experts generally recommend. And a hodgepodge of state IRAs would be less efficient and more costly than a national plan.

That said, states can sometimes get it right. State-run 529 college savings plans have helped countless families with tuition bills. The Massachusetts health care plan was a model for the national plan that has meant coverage for millions. Perhaps the states’ efforts will push retirement savings higher up the federal government’s priority list. If Illinois can lead the way on retirement, anything’s possible.

 

MONEY

What the Oscar Movies Can Teach Us About Money

The envelope please...

2015 Warrens Award
Leah Bailey

The Oscars do a fine job of honoring great movies. But who honors great movies about money?

No one—until now, that is. To accompany the 87th Academy Awards, MONEY is inaugurating its own prizes to commemorate 2014’s finest cinematic lessons in personal finance. We’re calling them the Warrens, in a nod to Warren Buffett, the shrewd money manager who’s also a celebrated dispenser of financial common sense.

Had the Warrens existed in past years, awards likely would have gone to movies like Blue Jasmine, for which Cate Blanchett won a 2014 Oscar portraying a woman whose life falls apart after her husband’s Madoff-like fraud is exposed. One key lesson from that movie: Don’t abdicate all financial responsibilities to your spouse. Another: Bad things can happen if your self-image is tied up in your net worth.

Another past recipient would have been the 2009 Best Picture Oscar winner, Slumdog Millionaire, which, despite its focus on a get-rich-quick game show, argues that love, not money, is the key to happiness.

So which 2014 movies win this year’s Warrens, and what lessons do they teach?

The envelope please….

— By Kara Brandeisky, Margaret Magnarelli, Susie Poppick, Ian Salisbury, Taylor Tepper, and Jackie Zimmermann

 

  • Best Argument for the Value of Education

    BOYHOOD, Patricia Arquette, 2014.
    Matt Lankes—IFC Films/Courtesy Everett Collection

    Boyhood

    In this Best Picture-nominated movie, Olivia (played by Oscar favorite Patricia Arquette), raising two children without their father, goes back to school to earn her bachelor’s and master’s degrees. That effort ultimately helps her land a dream job as a psychology professor. At a lunch celebrating her son Mason’s high school graduation, Olivia encounters a young man she once hired to install her septic tank and whom she had encouraged to go to community college. Turns out he did just that and now runs the restaurant where she’s eating. “You changed my life,” he tells Olivia. No, it was education that did it—for both of them. (For a guide to affordable colleges that have the strongest economic payback, check out Money’s Best Colleges.)

  • Best Lesson in Estate Planning

    THE GRAND BUDAPEST HOTEL, from left: Paul Schlase, Tony Revolori, Tilda Swinton, Ralph Fiennes, 2014.
    Martin Scali—Fox Searchlight/Courtesy Everett Collection

    The Grand Budapest Hotel

    In director Wes Anderson’s Oscar-nominated movie, famed concierge Gustave H (Ralph Fiennes) is willed a priceless work of art, “Boy With Apple,” by a rich patron of his hotel—who also happened to be his lover. The deceased’s progeny are none too pleased by this unexpected turn and go to great lengths to reclaim the valuable piece of art. This drama could have been avoided if the murdered Madame D (Tilda Swinton) had simply followed good practices in estate planning, such as identifying which possession should go to which people.

  • Best Career-Change Advice (tie)

    BIRDMAN OR (THE UNEXPECTED VIRTUE OF IGNORANCE), (aka BIRDMAN), from left: Zach Galifianakis, Michael Keaton, 2014.
    Alison Rosa—20th Century Fox

    Birdman

    Onetime movie star Riggan Thomson (Michael Keaton) sinks his life savings into a Broadway play to revitalize his career; the attendant pressures, financial on top of personal, pose serious threats to his mental health. One key takeaway: If you’re looking for a second-act career, make sure you have the resources to fund your new venture without having to make the drastic move, in Thomson’s case, of refinancing the Malibu home you promised to your daughter.

  • Best Career-Change Advice (tie)

    LETS BE COPS, from left: Damon Wayans, Jake Johnson, 2014.
    Frank Masi—20th Century Fox Licensing/Everett Collection

    Let’s Be Cops

    This buddy movie won’t win any Oscars — it scored a pathetic 30 of 100 on Metacritic—but it’s got our vote for job-switching smarts. Pals Justin (Jake Johnson) and Ryan (Damon Wayans Jr.) dress up as the fuzz for a costume party, find they like the attention their garb garners, and decide to keep up the act. After they get mixed up in a real crime, one of them—spoiler alert!— heads to the police academy. It’s a smart move to do a trial run on a dream second career. Not so smart: breaking the law in the process.

  • Best Performance by a Financing Campaign

    VERONICA MARS, Kristen Bell, 2014.
    Robert Voets—Warner Bros/Courtesy Everett Collection

    Veronica Mars

    Spunky detective Veronica Mars (Kristen Bell) transitioned from the small screen to the big one in 2014 to help clear the name of her hottie ex Logan Echolls (Jason Dohring). While fans of the cancelled TV show were delighted to see the Neptune High gang reunited, it wasn’t the contents of this film that earned it a Warren — it was the financing. Appealing to a rabid Veronica Mars fan base, Bell and show creator Rob Thomas launched a Kickstarter campaign to crowdfund the film. The effort paid off: The film stands as Kickstarter’s highest-funded film project, and the sixth-highest-funded project ever for the site. If you have a project you’d like to raise money for, start with these tips for a successful crowdfunding campaign.

  • Best Small-Business Strategy

    CHEF, from left: Emjay Anthony, Jon Favreau, 2012.
    Merrick Morton—Open Road Films/Courtesy Everett Collection

    Chef

    This indie hit isn’t just about food and family. It’s also about how to promote your small business on social media—and how not to. High-powered chef Carl Casper (Jon Favreau) makes a big mistake after joining Twitter, losing his cool and firing off a series of obscenity-laced tweets at a famous restaurant blogger. After Carl loses his job, however, his son Percy uses savvier social media posts in a wildly successful effort to promote Carl’s new venture, a Cuban sandwich truck.

  • Best Real Estate Recommendation

    NEIGHBORS, from left: Rose Byrne, Seth Rogen, 2014.
    Glen Wilson—Universal/Courtesy Everett Collection

    Neighbors

    Mac and Kelly Radner (Seth Rogen and Rose Byrne), adjusting to life with a newborn, suddenly have their lives turned upside down when a fraternity moves in next door. Frats throw parties—loud ones that make it hard for babies to fall asleep—and soon the couple and the frat engage in an escalating series of pranks meant to make one another’s lives unbearable. Don’t want to end up like the Radners? Make sure you follow these steps when shopping for a home, and find a good real estate agent who is extremely knowledgeable about the neighborhood where you’re looking.

  • Best Sales Pitch

    A MOST VIOLENT YEAR, from left: Oscar Isaac, Albert Brooks, 2014.
    Atsushi Nishijima—Courtesy Everett Collection

    A Most Violent Year

    In this movie from Margin Call director J. C. Chandor, beleaguered heating-oil company owner Abel Morales (Oscar Isaac) coaches his sales force on how to close a deal. The key, he says, is projecting an aura of quality in even the subtlest of gestures—if a customer offers coffee or tea, for example, take tea because it’s the “fancy” choice. “We’re never going to be the cheapest option, so we have to be the best,” he says. “When you look them in the eye you have to believe that we are better—and we are—but you will never do anything as hard as staring a person straight in the eye and telling the truth.” Of course, sending a message about quality—whether or not it’s true—does something else: it gets people to spend more. That’s why we pull back the curtain on all the subliminal tricks that salespeople use to loosen your purse strings.

  • Best Argument for Having a Nest Egg

    THE GAMBLER, from left: Mark Wahlberg, John Goodman, 2014.
    Claire Folger—Paramount/Courtesy Everett Colle

    The Gambler

    You’ve probably heard of the importance of building up an emergency fund in order to cope when disaster strikes in the form of a job loss, or perhaps a costly family health issue. The necessity of having a nest egg to fall back on takes quite a different level of importance in this film, in which a literature professor and severe gambling addict named Jim Bennett (Mark Wahlberg) winds up owing several hundred thousand dollars to various underworld characters. At one point, Bennett turns for help to another loanshark named Frank (John Goodman), who offers a brilliant lecture on why an emergency fund is so critical—only with a lot more expletives than the typical personal finance expert. “Somebody wants you to do something, f*** you. Boss p***** you off, f*** you! Own your house. Have a couple bucks in the bank,” Frank explains. “A wise man’s life is based around f*** you. The United States of America is based on f*** you.”

    It’s worth noting that there are also better ways to pay off debt than turning to loansharks. Assuming, of course, your life isn’t on the line in the matter of a few days.

MONEY Love and Money

Why Cupid Is a Tightwad

In the new normal, fiscal prudence is sexier than ripped abs or buns of steel

When it comes to romance, who needs good looks? These days, Cupid is all about smart budgets and a sterling balance sheet, according to the latest findings on love and money.

A whopping 78% of Americans in a relationship say they prefer a partner who is good with money over one who’s physically attractive, according to a recent poll from rewards credit card Citi Double Cash. More than half believe their partner is looking out for their financial future.

Which is not to say Cupid is blind—but the arrow-slinging god of desire may simply be smarting from the Great Recession. Only recently have jobs and wages begun to show much strength. In this new normal, financial survival is sexier than ripped abs or knowing your way around a wine list. So it is that 52% of Americans expect their valentine this year to order takeout, not take them out, according to a love and money study from Ally Financial.

The Ally study also found that 55% are attracted to potential mates with strong budgeting and saving strategies. Specifically, 21% are attracted to those who pay as they go and avoid debt of any kind, while 18% are attracted to those who know how to chase down and seize a bargain. Just 3% are attracted to a suitor who appreciates the finer things and has a high credit card limit.

These findings help explain the rise of a dating site like creditscoredating.com, which seeks to address the concerns of the fiscally prudent lovelorn.

Yet love and money will always have an oil and water quality. People in a relationship are more than twice as likely to say they are the saver and that their mate is the spender in the union, according to a poll from SunTrust. About half agree that they and their partner have different spending habits. And among those who cop to relationship stress, the top cause is financial behavior.

The good news is that two-thirds say they do not have serious recurring arguments with their partner about money, Ally found. So this Valentine’s Day why not go cheap? The data suggest your date will adore you for it.

Read next: This is the sexiest financial habit

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