RISING COLLEGE COSTS have long been a major concern. How much might your family pay? Consider some numbers:

According to the College Board, it costs an average $24,920 in tuition, fees, food and housing to send a child to an in-state university for the 2024–25 academic year, while the tab for a private college averages $58,600. Sound steep? At some elite private colleges, the annual cost is now more than $80,000.
Some have contended the real cost hasn’t climbed nearly as fast as the sticker price,

THIS IS AN ISSUE THAT can prompt heated arguments among parents. Some insist that their children do chores in return for their allowance and that, once they’re teenagers, they should earn their spending money by babysitting, cutting grass or getting a job at the local ice cream parlor. Others believe that pocket money shouldn’t be tied to doing chores—because the latter is integral to being part of the family—and that forcing teenagers to take menial jobs gives them an uninspiring view of the work world and takes away from their far more important goal,

AS YOUR CHILDREN grow older, you’ll want to give them more financial responsibility, talk about money in depth and prod them to make smarter decisions. These strategies might help:

As with younger children, you want your teenagers to feel like they’re spending their own money, even if it’s your money that they are spending. For instance, you might deposit their allowance in a bank account that comes with a cash-machine card. That way, when they want money,

IF THERE IS ONE financial skill you should teach your children, it’s the ability to delay gratification. This isn’t just good for them. It’s also good for you. After all, if your kids grow up to be financially irresponsible adults, there is a fair chance you will ride to the rescue. Want to teach younger children to be smart about money? Try these five strategies:

Values are passed down through the generations in the stories that we tell.

AS AN ALTERNATIVE to dollar-cost averaging, consider value averaging, a strategy developed by a former Harvard Business School professor, Michael Edleson, and described in his 1993 book Value Averaging.
The math involved is fairly complicated. But the idea is simple enough: You set a target growth rate for your stock portfolio and then vary your regular investment, depending on how your stocks perform. Let’s say you want your portfolio to grow $500 a month.

SUPPOSE YOU STASH $400 each paycheck in your employer’s 401(k) plan. Whether you know it or not, you’re engaging in dollar-cost averaging. A good idea? Saving on a regular basis is a great habit to get into. But despite what some folks suggest, it’s neither magical nor a sure way to make money in the markets.
To understand the purported magic, imagine your regular $400 investment goes into a stock mutual fund. Your first investment is at $10 a share,

WHILE LOUSY STOCK market returns can be great for those saving for retirement, many investors don’t see it that way. Their big fear: They’ll invest in stocks, only to get hit with a devastating market decline that triggers hefty financial losses and painful pangs of regret.
How can you overcome this fear? If you’re young and just starting out, keep in mind that, while this month’s investment may take place at lofty prices, you have decades of regular investments ahead of you,

SEQUENCE-OF-RETURN risk can derail a retiree’s finances, as we discussed in the chapter on retirement. But what’s bad news for retirees can be good news for retirement savers.
Imagine your goal is to amass the maximum sum for retirement. What sequence of returns would you want? Sure, it’s gratifying when a market rally bloats your portfolio’s value. But what you really want are lousy returns throughout your working years, followed by a world-class rally right before you retire.

AN EMPLOYER’S 401(K) or 403(b) is typically the best place to stash your savings, thanks to the initial tax deduction, tax-deferred growth and any matching employer contribution. Yet many employees fail to take full advantage of these plans, contributing little or no money. And those who do contribute either never make an investment choice or, if they do, never revisit it.
To improve employee decision-making, many employer-sponsored retirement plans have been revamped. New employees are often automatically enrolled in the plan and their annual contribution is automatically increased,

YOU MIGHT TAKE THE savings opportunities available to you and array them from most to least attractive based on their tax advantages, investment costs and potential return.
For many of us, the most attractive place for our savings will be our employer’s 401(k) or similar retirement plan, which can offer the investor’s triple play: tax-deferred growth, either an initial tax deduction or tax-free withdrawals, and possibly a matching employer contribution. Depending on the size of that employer match and the vesting schedule for those contributions,

HOW CAN YOU GET yourself to sock away more money? Try these strategies:

Commit now to saving later. Sign up for payroll deduction into your 401(k) plan. Also set up automatic investment plans, where money is plucked from your checking account every month and invested in a savings account or the mutual funds you choose. Once you have automated your regular savings, inertia kicks in and you’re likely to stick with it. Got a pay raise?

ONE RULE OF THUMB says that, for a comfortable retirement, you need enough savings and other sources of retirement income to replicate 80% of what you earned while you were in the workforce. But few retirees hit this lofty goal and, for those with good savings habits, it may not make sense to try.
To understand what’s at issue, consider two examples. First, imagine that, while you were working, you saved around 10% of your income each year and you lost another 7.65% to Social Security and Medicare payroll taxes.

LIFE IS CHEAPER WHEN you have some savings. How so? Think of all the extra costs you incur when your finances are tight—and how you can sidestep those costs as you build up your retirement and taxable accounts.
For instance, as your savings grow, your need to borrow fades. Initially, that might mean never carrying a credit card balance and incurring finance charges. Later, you may have enough to pay cash when you buy a car.

THERE ARE ALL KINDS of good reasons to save regularly. Here’s another to add to the list: Saving is a bargain—and spending is mighty expensive.
How expensive? Let’s say you earn an extra $1,000 and you are in the 24% federal income tax bracket. After deducting federal income taxes, Social Security and Medicare payroll taxes, and state income taxes, you might be left with $650 to spend. When you spend that $650, you might end up with barely $600 of merchandise,

THE SOONER YOU START setting aside money for retirement and other goals, the easier it will be to amass the necessary sums, partly because you will have more months when you’re saving and partly because you should benefit more from investment compounding.
Compounding is the process by which money grows over time. Imagine you started with $1,000 and earned 6% a year. During the first year, your $1,000 would earn $60, turning your $1,000 into $1,060.