of the post stressful times in life are when people feel out of control. Some
examples include not being told when a delayed airline flight will take off or
sitting in stalled traffic and not knowing why.
are also many times when aspects of personal finance seem out of control.
Examples include stock market volatility, housing values, data hacks,
unemployment, reductions to employee benefit plans, and economic cycles.
to do? Control what you can about your finances. Below are five decisions or
actions that are totally within your control and can enhance your financial
¨Personal Health Habits- Follow expert recommendations for diet,
physical activity, sleep, dental flossing, and more. Spending less on health
care means more money available to build wealth.
¨Spending and Saving Habits- Choose to spend less and save more. Savings
provides access (e.g., to housing and health care), options, and financial
independence (i.e., the ability to support yourself without a paycheck).
¨Prudent Practices- Decide to prepare a budget, purchase
adequate insurance, shred outdated documents, prepare a will, and review your credit
report regularly for errors and evidence of identity theft.
¨Human Capital Investments- Make plans to take courses or other training
to increase your knowledge and skills. Doing so will enhance your employability
and could result in a better-paying new job or a promotion.
¨Time Management- Decide how you want to spend your time,
which can often affect your finances. While employers and family members are
definitely a big influence, people ultimately set their own time priorities.
department of Agricultural, Food, and Resource Economics at Rutgers University
recently held a seminar on Social Security for university faculty and staff.
Below are seven highlights shared by two presenters: Everett Lo, Deputy
Regional Communication Director for the Social Security Administration-New York
Region, and Gina Diouf, administrator of the New Brunswick, NJ Social Security
Security affects people throughout the life cycle including their birth, first
job, marriage, divorce, widowhood, and/or retirement. It is intended to replace
a portion of income but not be a sole source of income.
Social Security Retirement Estimator provides benefit estimates based on your Social Security earnings
record. Social Security benefits are based on a worker’s highest 35 years of
should check their Social Security statement annually to confirm that their
earnings information is accurate. To do this, use the “My Account” feature of the Social Security web site.
qualify for Social Security retirement benefits, a person must work 10 years and
be at least age 62. If you delay benefits beyond full retirement age or FRA
(age 66 to 67 depending on birth year), extra credits apply.
not make sense to wait for benefits past age 70 because no additional delayed
retirement credits are available. Between age 66 and 70, there is an 8% annual
increase in benefits. In an example provided at the seminar, a benefit of $1,000
at FRA of 66 would be equivalent to a $1,320 benefit at age 70.
Security benefits may be taxable if individual or household income exceeds
certain limits. Social Security can withhold federal income taxes or beneficiaries
can send the IRS quarterly estimated payments.
someone is working and receiving Social Security benefits, the earnings limit
($17,640 in 2019) applies before FRA. Future work plans are a key factor in
deciding when to claim Social Security.
recently attended the 2019 American Council on Consumer Interests (ACCI)
conference in Arlington, VA. Below are nine research findings that I took away
from the speaker presentations and posters:
¨Household Wealth- Cars are a major asset for low-income
households that do not own homes.
¨Research Lag Time- It takes 17 years for just 14% of research
to get translated into practice.
¨Choice Architecture- The framing of options for people can
greatly affect financial behavior (e.g., saving).
¨Positive Outcomes- Participants in an Assets for Independence
(AFI) matched savings program for low-income families were less likely to be
evicted and more likely to pay their utility bills.
¨Gig Economy- 1 in 10 workers has earned money through the
“gig economy.” Gig workers must generally provide the “physical capital” for
doing their work (e.g., use of a computer or a personal car for Uber).
¨Financial Education Impact- Financial education in high school can
decrease the probability of being over-confident about your finances, which is
associated with use of alternative financial services products.
¨Phased Retirement- Working part-time in later life avoids the
psychological challenges of jumping immediately from full-time work to
immediately retiring and helps to maintain older adult happiness.
¨Financial Self-Efficacy-This is a feeling of being able to deal with
financial situations effectively. A study found that a higher level of
self-efficacy significantly contributed to higher financial well-being.
¨Financial Capability- The Consumer Financial Protection Bureau
described three building blocks of financial capability: executive function,
financial habits and norms, and financial knowledge and decision-making skills.
According to online dictionaries, the word “boost” can be defined as “a
source of help or encouragement leading to an increase or improvement” or “to
lift, elevate, enhance, or raise.” It is often noted in reference to the
economy, minimum wages, tourism, organizational morale, production, sales, and
I started thinking about the word “boost” this week in a new way after
a recent personal experience. Last week, for two days, I was a sick puppy.
Vomiting and diarrhea and I’m not really sure why. Business travel, perhaps, a
Memorial Day party, or maybe some food poisoning? I don’t know. Regardless, there was one silver
lining. I lost four pounds after all the unpleasantness…. weight that I had
been half-heartedly trying to lose for months.
Then, an interesting thing happened. I became much more conscientious
about my food intake again because I wanted to keep those hard-won four pounds
off. So far, so good. I realized that I had experienced a “success boost” and
it was very empowering. I leap-frogged weeks of loosing a half-pound here and
there and had real results to be proud of… and to want to fight to protect. My
success boost changed my mindset and behavior.
Since I speak and conduct research about health and wealth
relationships, I started thinking about comparable financial “success boosts”
where people can make big, empowering progress leaps. Here are a few examples:
Snowball Repayment Method- Pay off debts starting with smallest balances first while making
minimum payments on larger debts. The psychological benefit of owing fewer
creditors provides positive feedback.
Save more when you earn more through raises, promotions, side hustles, or a
change of employment. Your cash flow will essentially remain the same and you can
save without feeling deprived.
“found” money (whether expected or not) as a precious resource. Set some aside
for emergency savings, repayment of outstanding debt, long-term goal savings,
and other high-priority items.
Matched Savings- Two
common examples are employer matching for 401(k) plan deposits and matched savings
for individual development account (IDA) program savings.
Become aware of opportunities for “success boosts” in your financial
life. If your work involves financial education or counseling, help others to
do the same. Everyone can benefit from a boost from time to time.