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Newsweek
27-04-2025
- Business
- Newsweek
Americans Share Best Financial Advice They Ever Received—It's Eye-Opening
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Separating needs from wants and saving money as early as possible are among the top money tips that Americans have received, a new poll has shown. The poll conducted for Newsweek by Talker Research between April 11 and 17 asked 1,000 Americans to share the most-impactful financial advice they have ever been given. The responses reveal a common thread of caution, planning and prudence, with many pointing to the power of early savings and restraint. At the start of April, which marks National Financial Literacy Month, President Donald Trump shared a statement saying: "I urge families, communities, schools, and institutions to commit to bolstering their financial knowledge." The percentage of adults in the United States with poor financial literacy rose from 20 percent in 2017 to 25 percent in 2023, and the lack of financial literacy cost Americans an estimated $388 billion in the same year, according to a study by Moneyzine. In Trump's statement in April, the president noted that "research shows financial literacy leads to greater investments, higher retirement savings, and ultimately more household wealth." Below, we highlight some of the best financial advice Americans have received. An illustration featuring a man holding a stack of cash in one hand, a woman holding shopping bags and hands placing coins into a savings jar and piggy bank. An illustration featuring a man holding a stack of cash in one hand, a woman holding shopping bags and hands placing coins into a savings jar and piggy bank. Photo Illustration by Newsweek Start Saving Early One survey respondent noted: "My father-in-law got me to start saving money at an early age and told me never to touch it till I retire. Now I am the first in my family to be well off, with no debt to pay off." Other participants shared this sentiment with practical tips such as "save as little as a dollar a day" and "save every little bit you can, it all adds up," reinforcing the adage that "a penny saved is a penny earned." Doug Carey, a chartered financial analyst (CFA), is the founder and owner of WealthTrace, a retirement and financial planning software. He told Newsweek that the best piece of financial advice he ever received is to "start saving early to my 401(k) [retirement fund] and max it out if possible." "The difference between starting savings to a retirement plan at age 25 versus 35 is startling," Carey noted. For example, if you have a 25-year-old who saves $20,000 per year to her 401(k) plan, she retires at age 65. "If she achieves a 7 percent annual rate of return, she would have $4.3 million when she retires," Carey said. "Now let's say this person instead starts saving at age 35. Incredibly, by waiting 10 years her 401(k) balance drops all the way down to $2 million at retirement," Carey noted. He said: "This example just shows the power of compounding at work. The earlier people save, the more of that magical compound interest they get." … And Save Regularly Some respondents emphasized structured saving habits. One said they were told to "save at least $200 every time you get paid," while a different respondent advised, "spend only 25 percent of your income." So, what is the ideal amount we should be saving every month? "While there are general rules and percentages, average savings rates are unlikely to fit you as an individual," Jay Zigmont, a certified financial planner, told U.S. News & World Report in March 2023. "Each person's savings rate should reflect their finances and financial goals," he said. Stock image: A hand placing a coin into a piggy bank next to a pile of coins. Stock image: A hand placing a coin into a piggy bank next to a pile of coins. iStock / Getty Images Plus Stay Out of Debt Becoming debt-free was another common theme, with one respondent saying they were told to "pay off all debt as soon as possible." Carey, agreed, telling Newsweek that "another great piece of advice I have gotten is to stay out of debt, except for a mortgage." He said: "The more people are in debt, the less they can save. It is debt that delays savings for so many people and they do not get the power of compounding over time, which is the single best to way to ensure a large nest egg at retirement." Carey said that another way of looking at it is to "live at or below your means," adding "I have always lived by the adage—if you can't pay cash, you can't afford it." Know Your Needs Vs. Wants Understanding the difference between needs and wants was another common tip. One person cited the best advice they received was: "Separate your wants and your needs." Another said: "Before you spend any money, ask yourself 'do I really need this?'" When it comes to impulse spending, particularly on clothes, one participant said they were told to do a simple mental check, adding, "If you are debating buying a piece of clothing, just ask if you'd wear it for a day per dollar." So, a $20 item would translate to 20 days. Have More Than One Source of Income According to the U.S. Bureau of Labor Statistics, over 8.5 million people aged 20 and older were reported to have more than one job in January 2025. Diversifying income was also seen as a key to financial health. "Always have multiple incomes," said one poll participant. Another added: "If you have two incomes, live off one and bank and invest the other." … And Your Own Bank Account When Married Financial independence within relationships was another tip mentioned. One respondent shared: "When you are married, always have a checking account in your own name in case of tough times." True Tamplin, who is a certified educator in personal finance (CEPF) and the founder of Finance Strategists, notes that joint bank accounts in marriage "can act as a catalyst for transparent conversations around money." However, Tamplin also warns that "financial disagreements are one of the leading causes of marital strife" and "one partner's frivolous spending or the other's overly conservative approach might lead to conflicts" when couples have a shared account. Focus on What You Can Control For managing financial stress, one poll participant offered a broader perspective. The respondent said: "One of the best pieces of financial advice I've ever received is 'focus on what you can control—cut expenses, increase your emergency fund, and don't panic.'" The respondent continued: "During tough times, it's easy to feel overwhelmed, but this advice helped me stay grounded. It reminded me to track every dollar, prioritize needs over wants, and build a cushion for the future—even if it was just a little at a time. Small, consistent steps really do add up, and staying calm can make all the difference when things feel uncertain." Remember That Money Goes Quickly Another response highlighted a more-sobering realization, saying: "Not really advice but I did have an old boss tell me that no matter how much money you make it always finds somewhere to go." The respondent continued: "I really noticed that throughout the years, even though I'm making more money, it's almost like I don't have any extra because it just finds places to go." Stock image: A person looking at bar graphs on a financial document, with one hand on a calculator. Stock image: A person looking at bar graphs on a financial document, with one hand on a calculator. iStock / Getty Images Plus Do you have a personal finance question or dilemma to share? Let us know via life@ and your story could be featured on Newsweek.
Yahoo
08-03-2025
- Business
- Yahoo
6 Stupidest Money Mistakes You Can Make This Year, According to Experts
Your money is either working for you or against you. If you make dumb financial moves, you're going to regret it. The worst part is that most people don't even realize they're making these mistakes until it's too late. Consider This: Find Out: Here are the stupidest money mistakes you want to avoid this year. The stock market has been volatile this year, and it's easy to get scared and feel like you should sell your assets before you lose money. That's a huge mistake! 'One of the worst mistakes you could make this year is freaking out over a market dip and selling your stocks or 401(k) at a loss. That's how people turn temporary downturns into real losses,' said Joseph Camberato, CEO at National Business Capital. 'With a new administration, the market might react negatively in the short term, and that's perfectly normal. But don't try to time the market. Stick with the S&P 500 and quality stocks.' Read More: Retirement might seem like a distant problem, something to worry about later. However, every year you delay saving for retirement, you lose out on the magic of compound interest. Saving early and consistently is of utmost importance due to the power of compounding. There's a huge difference between starting savings at age 25 versus age 35. 'Here's an example: If a 25-year-old starts saving $20,000 per year for 30 years at an 8% annual return, they would have $2.5 million saved at age 55. But if this person instead started at age 35 and saved until age 55, they would only have $980,000 saved,' said Doug Carey, founder and president of WealthTrace. 'Delaying saving by 10 years cost this person over $1.5 million. That is the power of compounding at work.' Digital currencies are highly volatile, and speculating on them is the worst mistake you can make. 'The crypto market has never been a good place to invest. At times it has been a profitable place for some to speculate. My belief is, 'Just Say No!' should guide your actions with respect to crypto,' said Robert Johnson, professor of finance at Creighton University and CEO at Economic Index Associates. 'One cannot invest in the wide array of cryptocurrencies. One can only speculate. 'Investing' in Bitcoin and other cryptocurrencies is pure, unadulterated speculation. I put investing in quotes because this is not investing; it's speculating.' Having money is good, but holding too much cash is dumb with inflation. 'Having an emergency fund and cash available to pay bigger bills throughout the year is necessary. However, at some point, it becomes too much. Most people should have three to six months of cash set aside for emergencies,' said Trevor Ausen, founder of Authentic Life Financial Planning. 'You also should have some cash available for larger expenses that happen throughout the year (car insurance and repairs, home repairs, medical bills). After that, 100% of your money should be invested. The only exception is if you have other larger purchases that you're saving for, such as a home or car purchase and big travel,' Ausen added. While savings accounts can grow your money, thinking about it as some sort of investment strategy is stupid. 'Yeah, 4 to 5% sounds nice compared to what we had before. We're all happy our interest is better than 0.000001%, but if you're just letting your money sit there instead of growing it, you're basically letting inflation eat away at your future,' added Lucas Barcelo, founder of Thrivin Life. Debt is a wealth killer. Incurring unnecessary debt is way riskier. 'There's a lot of uncertainty about how the economy will look in the next six to 12 months. This is not the time to incur debt to add an addition to your house or finance a big trip,' said Ashley Morgan, debt and bankruptcy lawyer at Ashley F. Morgan Law. 'Keep any debt purchases to a minimum. If you need to buy a new car, try to limit the amount financed as much as possible. Limiting debt is always ideal, but right now, making sure you have limited it as much as possible is critical.' More From GOBankingRatesI'm Retired and Regret Not Claiming Social Security at 65 -- Here's Why This article originally appeared on 6 Stupidest Money Mistakes You Can Make This Year, According to Experts Sign in to access your portfolio
Yahoo
02-03-2025
- Business
- Yahoo
3 Key Signs You Should File for Social Security Sooner Rather Than Later
Deciding when to claim Social Security could be an important key for older adults unlocking their retirement future. Claiming early could be the best move for retirees in poor health, who need immediate income or for other reasons taking benefits could be a wise financial move. Be Aware: Try This: Here are three key signs you should file for Social Security sooner rather than later. Many financial experts don't recommend filing for Social Security early, because the reduction in payments can be drastic. Doug Carey, a chartered financial analyst (CFA) and founder and owner of WealthTrace, a consumer retirement and financial planning software company, said claiming at 62 instead of the full retirement age of 67 could be costly. 'Their payments are reduced by 30% per month,' Carey said. 'Over time, this can add up to thousands of dollars in reduced payments.' However, Carey said if an older adult has a lower life expectancy, then filing for Social Security sooner rather than later makes financial sense. 'Generally speaking, if you expect to live to at least age 75, it wouldn't make sense to take Social Security early,' Carey said. 'But if you have serious health conditions or a family history of shorter lifespans, claiming early could be the right strategy.' Find Out: Claiming Social Security early may be a wise move, depending on one's marital status. Joseph Patrick Roop, president and founder of Belmont Capital Advisors, said filing for Social Security sooner could be an option for a single person in poor health who is no longer working or a married couple. 'Spouses should strategize to determine which one should file last to maximize benefits by waiting until age 70,' Roop said. 'Typically, the higher-earning spouse should delay filing until 70 to maximize their benefit.' Roop explained, 'After one spouse passes away, the surviving spouse will continue receiving the larger of the two benefit checks while the smaller check is lost.' Melissa Pavone, founder at Mindful Financial Partners, said divorced retirees who were married for at least 10 years and are unmarried now may be eligible for spousal benefits based on their ex-spouse's earnings. 'In some cases, claiming early may make sense, especially if your own benefit is lower.' For older adults whose spouse is deceased, Pavone said surviving spouses can claim reduced survivor benefits as early as age 60. 'But switching strategies — claiming their own benefits later — can optimize overall payouts,' Pavone said. The Social Security Trust Fund will face a shortfall within the next decade unless Congress acts sooner rather than later to shore up funds for the federal entitlement program. Economists at the Peterson Foundation, a fiscal think tank, estimate that 'without reform, the combined Social Security trust funds will be depleted in 2035, at which point program benefits would be reduced by 17%.' Krisstin Petersmarck, a National Social Security Advisor (NSSA) and investment advisor representative at New Horizon Retirement Solutions, said many people are worried about the future of the Social Security Trust Fund. 'It is not uncommon for individuals who are worried that the benefit could be reduced or eliminated to make the decision to claim early and receive income before it may not be available,' Petersmarck said. She said older adults should understand that they cannot go back once they have claimed their benefits and received payments for 12 months. 'The best decision is to consult with a financial advisor who specializes in retirement planning to weigh the different claiming options and how it can impact you long term,' Petersmarck said. More From GOBankingRates This article originally appeared on 3 Key Signs You Should File for Social Security Sooner Rather Than Later Sign in to access your portfolio
