Lists

IF MONEY ISSUES HAD the urgency of a broken air-conditioning system on a 100-degree day, we’d all be in great financial shape.
But all too often, financial troubles are years in the making. We bumble along, vaguely aware that things aren’t quite right. Sure enough, one day, the red lights are flashing and the alarm bells are ringing. But by then, it’s usually way too late to fix the problem—because the fix required taking action years earlier.

THE MARKETS AREN’T predictable—but the talking heads sure are. Like a dog with a favorite fire hydrant, financial commentators return to the same themes again and again.
The silver lining: There’s no need to waste hundreds of hours in 2021 reading the business section and watching financial news channels, because we already know what the pundits will be saying next year—and probably the year after that and the year after that. Look for these seven stories in 2021:
1.

MONEY IS IMPORTANT. But how do we ensure it has the right importance in our life—and no more? Here are 11 signs we’ve got it about right:

We aren’t jealous of others or lust after the things they have.
We borrow when we must—but we never borrow so much that we stress ourselves out today or put our future self at risk.
We consciously spend a little less today so we enjoy the long-run happiness that comes with money in the bank and the knowledge that we can cope with financial adversity.

THROUGHOUT THE DAY, we make countless snap judgments, often without realizing it. Think about navigating the grocery store. This involves a blizzard of decisions—which brand, what size, whether it’s good value, will it stay fresh—and yet we do so almost effortlessly.
Most of the time, this is a good thing. If we carefully pondered the assumptions behind every judgment we make, life would become painfully unproductive. Still, it’s helpful occasionally to question whether we’re misjudging the world,

MANAGING MONEY is ridiculously simple—and unbelievably hard.
Figuring out what we should do with our dollars is typically straightforward: We should save regularly, diversify broadly, rebalance occasionally and so on. Instead, the tough part is getting ourselves to do what we intellectually know is right.
Take the notion of buying low and selling high. Every investor knows that’s the goal—and yet, when the S&P 500 slumped 34% earlier this year, many folks just couldn’t bring themselves to buy stocks.

IT SEEMS QUAINT NOW, but a quarter century ago conversations would often degenerate into arguments over facts. How much do homes typically appreciate? How much does the average American have saved by retirement? What does a nursing home cost? Such questions would trigger tedious debates built on anecdotal evidence and half-remembered newspaper articles.
But as my father—who died in 2009—often remarked during the final decade of his life, there’s no point anymore in arguing over facts.

AS THE MARKET plunged earlier this year, I recalled the sage advice of billionaire investor Mark Cuban: “When you don’t know what to do, do nothing.” My wife and I are 100% in index funds, so doing nothing was easier for us than for more active investors. Still, we did take some action and, more important, learned some valuable lessons.
Examples? With the bear market apparently behind us, I decided to create a record of the steps we took,

YOU KNOW THOSE timeless financial principles? Sometimes they don’t age so well.
Since I started writing about money in 1985, all kinds of financial principles have gone out the window—and that’s continued right up until 2020. Indeed, if you’re still hewing to the financial wisdom of the 1980s, you’re likely hurting yourself today. Here are four examples:
1. Goodbye, Peter. In the late 1980s, America’s most celebrated fund manager was Fidelity Magellan’s Peter Lynch.

AS WE MAKE FINANCIAL, political and other decisions, we’re bombarded with messages that supposedly offer helpful information. But as savvy consumers of news and advertising, we need to realize that we aren’t nudged just by the content of these messages. It’s also the packaging that can have a huge influence.
Below are 21 ways that information is packaged to make it more enticing. Think of this list as a follow-up to my earlier article,

THIS PANDEMIC HAS changed the way we live: Many people are physically distancing themselves, washing their hands more often and wearing a mask when they’re around others. But it’s also changed how I think about money—in six ways:
1. Emergency savings. Before the pandemic, I always thought a cash emergency fund equal to six months’ living expenses would be sufficient. Not anymore. The massive economic shutdown has led to millions of unemployed Americans—and it will take longer than six months for many of these folks to find work again.

IT SEEMS THE WORST of this economic crisis may have passed, though the health risks will be with us for some time. What have we learned? For many people, long-discussed financial risks became all too real in 2020.
There are two words that should always be part of our thinking: what if. Those two words aren’t always associated with bad things. What if I win the lottery? I have a plan for that, which varies depending on how much I win and whether it triggers estate taxes.

MANY OF US HAVE found ourselves with free time on our hands. I’ve read that folks are filling their days with shopping, baking, exercising and binge-watching TV. May I suggest another activity, one that may prove profitable?
Over the past few years, I’ve found significant amounts of money in unlikely places. These treasures often come not just with monetary benefits, but also great memories. Here are four places to look:
1. Forgotten savings bonds.

MANY MEMBERS OF THE military live in a crisis-like state. They’re frequently deployed to dangerous places. Their families often have to move every few years.
Today, that sense of crisis is shared by many others. In fact, with 23.1 million Americans unemployed as of April, a government paycheck seems stable by comparison. How can families prep their finances for ongoing economic instability? Here are five of the money principles I advocate in my work counseling soldiers,

FORCED TO SHELTER in place, I’ve used the time at home to organize my finances. I’d already read Marie Kondo’s Tidying Up. But I needed her new book, Joy at Work, to motivate me to organize my digital life. Sometimes, it helps to have a step-by-step guide to prod you to deal with such drudgery. Here are four tips I used to get myself organized:
1. Consolidate fixed costs.

EARLIER THIS YEAR, before the coronavirus hit, my family visited an amusement park. Everyone had fun—except my nine-year-old, who complained about the injustice of the rigged “down the clown” game.
You have probably seen this sort of thing: You’re given a handful of baseballs. Then, standing from about 10 feet away, the challenge is to knock down as many mechanical clowns as possible for a chance to win a prize. It doesn’t appear difficult—you aren’t that far away and the clowns are tightly spaced—but most people walk away empty-handed.