MONEY Financial Planning

What’s Your Biggest Money Worry?

Do you worry more about repaying your student loans or saving for retirement?

We asked people in Times Square what’s their biggest money worry. Some said they worried about paying back their student loans–unlike the grads of this university, who got their degree for free–while some worry more about saving for retirement. One man even told us his biggest worry about money is how it can “control your mind.”

Read next: This Worry Keeps 62% of Americans Up at Night

MONEY Savings

5 Money Tips for Millennials Who Want to Start Planning for the Future

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Jenner Images—Getty Images

Many millennials have a pessimistic outlook on their personal finances because of the financial crisis.

Pilar Belendez-DeSha was trying to figure out her next move.

When the financial crisis hit in 2008, she was getting her geography degree at the University of Kentucky, but she did not have a plan.

“All the jobs I was looking at paid really poorly, and I wasn’t hearing about anyone getting hired except for internships that paid less than $25,000 a year,” said Belendez-DeSha, 30, now a graduate student in New York City. “College wasn’t paying off at that time … And I was kind of freaking out about having a financially sound life.”

There was an emerging consensus that so-called millennials – or people who reached young adulthood around the year 2000 – would face tougher financial challenges than their parents’ generation. At the same time, Belendez-DeSha saw her father lose money on the stock market and her mother struggle to find a job.

“When you see your parents try to figure things out, everything becomes a little iffy,” she said.

Belendez-DeSha is not alone. Many millennials have a pessimistic outlook on their personal finances because of the financial crisis.

According to insurer Northwestern Mutual, 28% of millennials are less comfortable taking risks with their finances than they were in 2008 and 71% prefer to play it safe with investments, even at the risk of lower returns. Additionally, 62% agree that over time there likely will be more financial crises.

“This generation is particularly concerned, confused and maybe even a little distrusting,” said personal finance expert Farnoosh Torabi.

Here are five financial tips for millennials who are concerned about their financial future.

Take Advantage of Your Age

Your youth is one of your biggest assets. Take advantage of your time and energy to make as much money as possible.

Not all of your income has to come from one source, said Torabi. You can rent out your apartment via Airbnb, find side gigs at TaskRabbit.com, a tutoring job via tutor.com and discover freelance opportunities at upwork.com.

But do not expect to hit pay dirt right away: With a friend, Belendez-DeSha started a small design business that made no money. She was also walking dogs, catering and cooking at various restaurants on the side.

Rethink Real Estate

During the financial crisis, many parents of millennials thought that real estate was a safe investment. “Property is just like any other investment,” said Chantel Bonneau, wealth management adviser at Northwestern Mutual. “Just like buying a stock, it won’t always work out.”

Buy a home because you want to live in it, not because you assume you will make a profit, experts say. Make sure you are not borrowing more than you can pay off.

Diversify

Every four years, a dip in the financial market is expected, said Bonneau. That is why it is important to diversify your investments. Examples of different assets are permanent life insurance, rental properties, emergency funds, cash holding accounts, primary property and nonretirement investments.

Save Early and Often

Bad and unexpected things can happen. Spend less than you earn and build an emergency fund to cover three to six months of expenses. Automatically deduct cash from your checking account weekly or monthly to fund the emergency account.

“The more money you have set aside, the better position you will be in for whatever life throws at you,” said Stuart Ritter, senior financial planning analyst at T. Rowe Price .

Make a Financial Plan

Work on your financial plan. Set goals. What is important to you? Is it having a family or owning property – or both?

Track your cash flow with apps like Mint.com or LevelMoney to see what comes in every month and what goes out. That will provide financial clarity.

MONEY Savings

Vanguard Founder Jack Bogle’s Surprising Retirement Advice

The one thing you absolutely, without question, unavoidably, simply must not do while saving for retirement.

Don’t you dare open that monthly statement you get about your retirement account, says Jack Bogle, founder of the mutual fund giant Vanguard, which now has about $3 trillion of assets under management. “You’re gonna get a statement every month,” says Bogle. “Don’t open it. Never open it. Don’t peek.” Wait until you actually get to your retirement, then you can open your statement (although, Bogle jokes, you may want to have a cardiologist on hand). Not knowing how much you have growing in a retirement account makes you less likely to want to raid it when your kids go to college or when you want to buy that shiny new car. It also makes you less likely to trade in and out of the market, which can be a fool’s errand.

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MONEY 401(k)s

This Is the Single Biggest Threat to Boomers’ Retirement Savings

Roulette Wheel with ball on "0"
Alexander Kozachok—Getty Images

401(k) balances for longtime savers soared to $250,000, but many are taking big risks in the stock market.

IRA and 401(k) balances are holding steady near record levels. But certain risks have been creeping into the typical plan portfolio, which after a long bull market may be overexposed to stocks and otherwise burdened by a rising loan balance, new research shows.

The average balance in both IRA and 401(k) accounts dipped slightly in the second quarter, but continues to hover above $91,000 for the past year, according to new data from Fidelity Investments. Savers who have participated in a 401(k) for at least 10 years, and those who have both an IRA and a 401(k), now have balances that top $250,000.

Much of this growth owes to the stock market, which has more than doubled since the recession. But individual savers are stepping up as well. For the first time, the average 401(k) participant socked away more than $10,000 (including company match) in a 12-month period, Fidelity found. That occurred in the second quarter, when the total contribution rose to $10,180, up from $9,840 the previous quarter.

Yet bulging savings have tempted some workers to dig a little deeper into the 401(k) piggy bank. New plan loans and participants with a loan outstanding held constant in the second quarter, at 10.1% and 21.9% respectively. But the average outstanding plan loan balance climbed to $9,720, compared to $9,500 a year earlier. This leaves borrowers at greater risk of losing tax-advantaged savings and growth.

Plan loans are a primary source of retirement account leakage—money that “leaks” out of savings and never gets replaced. This may occur when a worker switches jobs and cannot repay the loan, which becomes an early distribution and may be subject to taxes and penalties.

Meanwhile, savers who are not invested in a target-date fund or managed account, and who have not rebalanced to maintain their target allocation, may find that the brisk rise in stock prices has left them with too much exposure to stocks. Baby boomers especially are at risk, Fidelity found. Pre-retirees should be lightening up on stocks, while adding bonds to reduce risk. But unless they regularly rebalance—and few people do—boomers have been riding the recent market gains, so they are holding an ever larger allocation in stocks than they originally intended.

That inertia could hurt boomers just as they move into retirement. During the last recession, 27% of those ages 56 to 65 had 90% or more of their 401(k) assets in stocks, which fell some 50% from the market peak in 2007. Those kinds of losses could wreck a retirement.

Could this scenario repeat? Very possibly. Nearly one in five of those ages 50-54 had a stock allocation at least 10 percentage points or higher than recommended, Fidelity found. For those ages 55-59, some 27% of savers exceed the recommended equity allocation. One in 10 in both age groups are 100% invested in stocks in their 401(k). It’s possible that these investors are holding a significant stake in safe assets, such as bonds or cash, outside their plans, which would cushion their risk. But that often is not the case.

Whether you’re approaching retirement, or you’re just starting out, it’s crucial to hold the right allocation in your 401(k) plan. Younger investors, who have decades of investing ahead, can ride out market downturn, so a 80% or higher allocation to stocks may be fine. But a 60-year-old would do better to keep only 50% invested equities, with the rest in a mix of bonds, real estate, cash and other alternatives. To get a suggested portfolio mix, try this asset allocation tool. And for tips on how to change your portfolio as you age, click here.

Read next: Americans Left $24 Billion in Retirement Money on the Table Last Year

MONEY strategy

Why Focus Is Essential to Building Wealth

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Jorg Greuel—Getty Images

Persistence is the key to any successful endeavor.

Building wealth is a process, not an event — a process that takes discipline and a long-term outlook. You must focus on yourself, not what others are doing. Work hard and maintain a consistent approach. This may not be easy, but it’s doable for most people if they choose to make a commitment and stick to it.

In the end, though, the “stick to it” part is what usually trips people up.

In an excellent post on his blog Seeking Wisdom, Jana Vembunarayanan gives a fantastic summary of how to succeed at just about anything. Here are his observations and recommendations, to which I’ve added some suggestions for applying them to your finances.

1. Recognize that it takes a long time to create anything valuable. Investing works over long periods of time. The market has never lost money over any 20-year stretch. The problem for many people is that they don’t understand their time frame. They confuse short- and long-term money and end up bailing at the worst possible moment. Finding a strategy that works, and sticking with it for decades despite the inevitable booms and busts of the markets, is not exciting. While you might feel you are missing out on the latest big thing, you will most likely have the last laugh.

Read next: 4 Personality Quirks That Sabotage Your Savings

2. Work hard every day even if you don’t see improvement in the short term. Building your skills enables you to earn a higher income, so you can save more. Small increases in savings each year are barely observable at first, but over time you can be working toward saving 20% of a $100,000 salary, which will provide great rewards in the future. Many will give up because they become impatient with a seeming lack of progress. Accept the short-term stagnation knowing you will be rewarded with the miracle of compounded returns in the future.

3. Keep doing it consistently for a very long time without giving up. Persistence is the key to any successful endeavor. While it might satisfy a short-term urge to remodel your kitchen by raiding your 401(k) account, resist this temptation and stick to the plan. Investing is simple but not easy. Track your wealth accumulation yearly, not daily. This encourages you to build your future, not mortgage it.

4. Enjoy the process, and don’t worry about the outcome. Put things on autopilot. Set your plan to save a certain percentage of your salary, with an increase of a percentage point or two each year until you maximize your contributions. Find a few diversified, low-cost index funds, add an automatic yearly rebalance, and forget about it. Enjoy your life and ignore the daily end-of-the-world events that saturate the financial media in their quest for advertising dollars. Focus on the fact that you will be financially secure by sticking to your plan. In your free time, devote your energies to finding things you like to do. Find ways to increase your skill level and eventually make money from a “job” that doesn’t seem like work. This way to supplement your income might lead you down some surprising paths while you have the security of your savings plan at your day job.

5. Don’t compare yourself to others; instead, compare yourself now to yourself two years ago. Keeping up with Joneses is, as serial insulter Donald Trump would say, a loser’s strategy. A phenomenon called “lifestyle creep” can sabotage the best-laid plans. It means that the more you make, the more you spend. Your only accomplishment is making the hamster wheel spin faster. Don’t worry about what others have. No matter how rich you are, there will always be someone who has more than you. And such people might just be renters anyway, buying their goodies with credit cards with huge balances. Look at yourself instead. Build a disciplined savings plan, and follow it with no deviations. Competing with your neighbors over who has the most “stuff” is not a good use of your time.

As Warren Buffett once said, “Games are won by players who focus on the playing field, not by those whose eyes are glued to the scoreboard.” Keep these five points in mind, and your probability of success will increase immensely. Good habits will eventually lead to superior results in whatever you do. The key is to figure out what works for you and stick to it. Your process will determine your future. Spend time developing it, and then enjoy your life.

Read next: 19 Secrets Your Millionaire Neighbor Won’t Tell You

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MONEY Savings

42 Ways to Save by Cutting Out Food Waste

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Evan Sklar—Getty Images

Start by embracing your freezer.

In a recent episode of Last Week Tonight with John Oliver, the comedian-host addressed America’s relationship with food waste. Long story short? We waste a TON of food, and we’ve got to put an end to it.

According to the NRDC (Natural Resources Defense Council), as much as 40 percent of the food produced in America gets trashed. As a country, Americans throw away $165 billion worth of food every year; individually, that comes out to about 20 pounds of food per person, per month. That’s about as close as we can get to throwing away money.

Not only are there huge environmental concerns about all that produce rotting in landfills, but the issue takes on a new weight when you take into account that 50 million people in the U.S. experience food insecurity.

Here’s How to Save Hundreds on Groceries

No doubt, you—our budget-savvy, smart shopping readers—are far less wasteful than most. But in light of the enormity of the problem, here’s an exhaustive refresher course in how to cut back on (and even eliminate!) household food waste:

At the store/unpacking at home
1. Be careful when buying in bulk (stick to non-perishable foods and home supplies)
2. Clean out your pantry and use the oldest items up first.
3. Organize your refrigerator the right way.
4. When unloading groceries, rearrange the fridge so the items that expire soonest are toward the front.
5. Don’t immediately trash food that’s past its sell-by date.
6. Print this helpful chart that details produce shelf life.

Take full advantage of fresh produce (and preserve it!)
7. Stay on top of the produce in your refrigerator, so nothing gets lost in the shuffle.
8. Eat fruit that’s in season.
9. Preserve the life of spring and summer berries.
10. Make your own jam (in 30 minutes or less)
11. Can summer’s fruits and vegetables at home and save money.
12. Don’t have the patience for canning? Try quickling! (My new favorite word.)
13. If greens wilt a little bit in the fridge, revive them in cold water.
14. Cook with food scraps.
15. Use leftover vegetables up in the crock pot.
16. Stuff zucchinis, peppers and more to turn veggies into a main course.
17. Spiralize vegetables for a healthy, hearty “pasta” dish.
18. Find new uses for basil this summer.
19. Then freeze fresh herbs to use all winter long.
20. Use long-in-the-tooth veggies in a super-easy stir-fry or fried rice.
21. Learn how to tell when an avocado is ripe.
22. And keep avocados from turning brown in your fridge.
23. Peel a mango without losing much of the flesh.
24. Brush up on our produce-saving kitchen hacks.
25. Learn to love ugly produce.

Don’t leave pantry staples hanging
26. Use every last bit of peanut butter in the jar (hint: our trick involves your morning oatmeal!)
27. Soften brown sugar that’s become rock hard—in seconds.
28. Revive stale bread with a little water and heat.
29. Keep an eye out for fruit powder.

Love your leftovers
30. Have a little yogurt left in the tub? Use it in a frozen treat.
31. Cook soups that freeze well.
32. Seriously, in general, embrace your freezer.
33. Learn the best ways to freeze produce, chicken, ground beef, bread and more.
34. Come winter, use frozen vegetables.
35. Bring restaurant leftovers home for a second meal or snack.
36. Pass on what you can’t use with these smart apps (check out #3).
37. Get creative with leftover ingredients.
38. Use up leftover chicken.
39. …and leftover turkey.

…and more
40. Invest in kitchen gadgets that make food prep easy.
41. Grow your own garden! And if you have a bumper crop, share it with neighbors.
42. Consider composting.

This article originally appeared on ALL YOU.

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MONEY IRAs

This Is the Biggest Mistake People Make With Their IRAs

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Jan Stromme—Getty Images

Too many investors view IRAs simply as parking accounts for their rollover 401(k) money.

Millions of American have IRAs. Some people, like me, have multiple IRAs, but hardly anyone makes regular contributions to these accounts. According to a recent study by the Investment Company Institute (ICI), only 8.7% of investors with a traditional (non-Roth) IRA contributed to them in tax year 2013.

The Employee Benefit Research Institute’s IRA database, which tracks 25 million IRA accounts, estimates an even smaller percentage of investors contributed to their traditional IRA accounts—just 7%.

The problem, it seems, is that many people have come to see IRAs as a place to park money rather than as a savings vehicle that needs regular, new contributions. Most IRAs are initially established with money that is rolled over from an employer-sponsored 401(k) when a worker changes jobs or retires.

As savings options, IRAs are inferior to 401(k)s, which typically offer employer matches and a tax deduction for your contribution. With IRAs, the deduction for contributions is more limited. If you are already covered by a plan at work, you qualify for a tax deduction to a traditional IRA only if your income is $61,000 or less. Moreover, the contribution limit for IRAs is low—$5,500 a year, or $6,500 if you’re 50 and older. By contrast, the contribution limit for a 401(k) is $18,000 this year ($24,000 for those 50 and older).

Still, traditional IRA accounts will let your money grow tax-deferred; with Roth IRAs, you contribute after-tax money, which will grow tax-free. Adding an extra $5,500 a year to your savings today can make a sizable difference to your retirement security. Even if you don’t qualify for a deduction, you can make a nondeductible contribution to an IRA. (Be sure to file the required IRS form, 8606, when you make nondeductible contributions to avoid tax headaches.) Still, as these new findings show, most people don’t contribute new money to any IRA.

I get it. I have two traditional IRAs from rollovers and have been making the mistake of not contributing more to them for years. Since my traditional IRAs were started with a lump sum, I mistakenly viewed them as static (though still invested) nest eggs. If I had thought of them as active vehicles to which I should contribute annually, I would be on much firmer footing in terms of my “retirement readiness.” (I also have a SEP-IRA that I can only contribute to from freelance income, and a Roth IRA which I converted from a third rollover IRA one year when it made sense tax-wise to do so, but also now can’t contribute to. No wonder I find IRAs confusing.)

The ICI’s report suggests that very low contribution rates for IRAs “are attributable to a number of factors, including that many retirement savers are meeting their savings needs through employer-sponsored accounts.” But that explanation is misleading. Even those lucky enough to have access to 401(k)s need to have been making the absolute maximum contributions every year since they were 23 years old to feel confident they’re saving enough.

IRAs are a valuable and often overlooked part of the whole plan—and for many without 401(k)s, they are THE whole plan. There has been a lot of attention on improving 401(k) plan participation rates by automatically enrolling employees. But only recently has there been more focus by policymakers on getting people to contribute to their IRAs on a regular basis, including innovations like President Obama’s MyRA savings accounts and efforts by Illinois and other states to create state savings plans for workers who lack 401(k)s. These are worthy projects that need an even bigger push.

Konigsberg is the author of The Truth About Grief, a contributor to the anthology Money Changes Everything, and a director at Arden Asset Management. The views expressed are solely her own.

Read next: Americans Left $24 Billion in Retirement Money on the Table

MONEY Spending

Why You Should Spend More Money in Retirement

illustration of senior couple taking money out of purse
Jason Schneider

Money worries can make you unnecessarily frugal. Here's how to overcome them.

You’ve saved up money your whole career. So in retirement, don’t deny yourself the pleasure of spending it.

Not a problem, you think? Actually, it can be. In 2014, 28% of people 65 and older with at least $100,000 in savings pulled less than 1% from their accounts, reports the research firm Hearts & Wallets. That’s well below the 4% that many financial planners say is safe.

Misgivings about spending play a big role, says Hearts & Wallets partner Laura Varas. In focus groups, retirees described big spenders their age as irresponsible and expressed shame about their own spending. And as people age, they tend to get more emotional about complex money decisions, says Christopher Browning, a financial planning professor at Texas Tech University: “No one gives you instructions on how to turn your savings into income. It can be a paralyzing process.”

First determine if a shortage of money is the problem rather than an inability to spend. The tool at troweprice.com/ric can help you figure out whether you indeed have enough funds for a good retirement. Then, if it’s worry that’s stifling your spending, try these steps to put yourself at ease.

Make Your Own Pension

Living off a steady income stream, not portfolio withdrawals, can boost your confidence about spending. A Towers Watson survey found that retirees relying on pension or rental income are less anxious than those who live off investments. Don’t have a pension and don’t want to be a landlord? You can create regular income by buying an immediate fixed annuity. A 65-year-old man who puts $100,000 into one today, for example, would collect about $500 a month for a lifetime.

Add up your monthly fixed costs, such as a mortgage and health insurance. If that amount exceeds your Social Security and any other guaranteed income, fill that gap with an annuity. (Get quotes at ImmediateAnnuities.com.) Granted, if you’re hesitant to spend money, you may be hesitant to lock up funds in an annuity. If so, annuitize a fraction of your money and add more once you’re more comfortable with the idea.

Bucket Your Money

Should you not want to tie up any money in an annuity, you can get comfortable about spending by dividing your portfolio into accounts for different needs. Browning suggests sorting your savings into three buckets. One provides income for everyday expenses over the next few years, the second is for fun pursuits, and the third is for future needs: day-to-day living, emergencies, and bequests.

Put the first two buckets in secure and liquid investments: money-market accounts, CDs, or high-quality bonds. The bucket for later years can have stock holdings for greater long-term growth.

Once that’s done, you can start collecting income—a paycheck for retirement. Set up a regular transfer from a money-market account that’s in your first bucket—enough to cover, with Social Security, monthly bills and usual expenses. Then relax and enjoy.

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MONEY Financial Planning

What Every Married Couple Should Understand About Community Property Laws

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Hero Images—Getty Images

5 must-know facts about marital property.

So Jennifer Garner and Ben Affleck are splitting up. It’s a sad story (hey, I like Ben and Jen both), but there’s an interesting lesson for all of us in this news: That they agreed to divide their assets amicably (or so we are told) and mediate their divorce. This type of adult behavior is indeed rare in a split.

More importantly, they resided in California – it’s one of a handful of community property states, which has an effect on your finances as a couple (or to-be-former couple).

Community property statutes date back to when the U.S. annexed the southwestern states when it was Mexico’s territory. The states adopted the communal rules of family, a traditional approach to property rights that was based more or less on a homemaker and a working spouse (here’s a current list of community property states).

Community property is simple: Most assets accumulated during marriage are split equally between the spouses, no matter how they were earned. I am not a lawyer so I don’t give legal advice, but I am educated in this area and have been involved with divorces informing clients of what the general community property laws mean for them. Every state that has this law is different, so check with your state for specifics. Keeping that in mind, here are five must-know things about community property.

1. Retirement Accounts

Even though they are accumulated separately, they are considered community property and divided equally between spouses. Social Security is an entitlement account and is handled differently.

2. Inherited Money Is (Usually) Separate Property

Inherited money is usually considered separate property, but there is a catch. If the money is used to purchase other assets after the inheritance or new assets are generated, then it can be considered community property.

3. Businesses You Own

This is considered community property. This one can get ugly since the value is split with the spouse. It may be tough to raise the cash to pay the spouse. Imagine also having other shareholders involved or partners! It can get complicated. Talk to an experienced attorney about getting a spousal exclusion to those assets (like a postnuptial agreement). This is a very overlooked area in planning.

4. Prenuptial Agreements

It may seem sad that a contract for the possible end of a marriage is made before the marriage commences, however this is the contract that will effectively stand up in court against the community property laws. Since this is a true contract, it should by all rights be a pre-division of assets. If you move from a state without community property laws to one that has them and there is a prenup in place, that is usually still binding.

5. Property Acquired Prior to Marriage

Assets accumulated prior to the date of marriage are considered separate property, but there is a catch. Make sure you detail those assets and valuations before the date of marriage. Remember I mentioned retirement accounts? Take inventory of your stuff prior to the marriage date. This will avoid the cost of a forensic accountant trying to figure out what belonged to whom.

As you go through a divorce, and after it’s final, it’s also important to check your credit to make sure all accounts you’re responsible for are being reported accurately. You can get your free annual credit reports from each of the three major credit reporting agencies from AnnualCreditReport.com.

These are some of the basics, but it is not comprehensive. What ultimately happens though if a divorce suit is filed? Well, like the Garner-Affleck story, as long as both parties agree to the terms, community property laws may not come into play since there is an agreement. If not, then a judge in a court may ultimately decide on the division of assets based on state law.

If you are a person with a simple or complex wealth plan and are getting married, or remarried, and you live in a community property state, consult a Certified Financial Planner (CFP) or a family attorney to get good advice about your situation. You may not want to think about your marriage ever ending — nor the laws that apply if it ever does. However, you might one day be faced with the inevitable, so it can help to make sure you are ready for it.

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MONEY Family

The Hidden Upside to Living With Mom and Dad

Recent college grads may think living at home is less than ideal, but it has its advantages.

CNN’s Christine Romans thinks it’s the perfect solution. If you’ve just graduated from college, there’s a good chance you’ve got at least a little bit of debt. Romans advises you to take a year at home to save up money, start paying off your loans, and get on your feet financially. But don’t stay forever, she says. Make a plan – you can even sign a contract – with your parents on what responsibilities you’ll take on, and how you plan to be out of the house before two years are up.

Read next: Why Millennials Are Better Off Waiting 10 Years to Buy a Home

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