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Marriage Negotiation: Of Chimp and Man

We human beings are close evolutionary cousins of the apes, closest of all to the chimpanzee and the bonobo. But economist Paul Seabright explains in his new book, “The War of the Sexes,” that male-female relationships differ from ape relationships. Squared Away asked Seabright to explain how evolution shapes financial negotiations between marriage or other partners. It all comes down to competition and cooperation, he says.

Q: Human behavior is determined by evolution?
Seabright: Yes. When Charles Darwin wrote “Origin of Species,” he was very, very cautious about saying too much about human behavior, because it was such a big thing to get people to swallow [that] we’d descended from animals. To talk about how human behavior was physically shaped, he didn’t do that until he wrote “The Descent of Man.” My book takes up the question of how much relations between men and women in modern society are shaped by our great ape inheritance.

Q: What is our evolutionary connection to the chimpanzee?

Seabright: The chimpanzee and the bonobo are like our two cousins. We share grandparents with them, a species that no longer exists, and all of us share great grandparents with gorillas. But we [humans] did this funny thing, which is we went into having kids who took much longer to raise. That’s relevant to financial behavior, because we have to look out for the future including the future of our kids, and there’s something especially human about that. Other species look after their kids, of course, but it’s a much bigger deal for us. …
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Middle Schools Vie in Video Contest

The Massachusetts Financial Education Collaborative (MFEC) had one big reason for targeting its video contest to middle school kids: advertising.

“Hey, you gotta have a cell phone. You gotta have these jeans. The contest seemed like a great way to bring awareness” to the issue of kids and our consumer culture, said Andrea Wrenn, mother of five, education consultant, and the MFEC volunteer who oversees the contest.

Two Massachusetts middle schools submitted videos exploring kid consumerism in the first year of MFEC’s contest: the Norwell Middle School and the Hill View Montessori Charter Public School in Haverhill.

Squared Away encourages readers to support the new effort by clicking here to vote for your favorite video! The voting deadline is April 27.

The contest is among the creative ways communities are encouraging children and teenagers to learn about the money issues they deal with – a play recently staged by Cambridge high school students was another.Learn More

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Fewer Claiming Social Security Right at 62

New research shows that the share of Americans who sign up to receive their Social Security pensions at age 62 has declined sharply over the past decade.

This trend is expected to continue despite a temporary spike in applications by 62-year-olds during the Great Recession, said Richard Johnson, a senior fellow who conducted this research at the Urban Institute, a Washington think tank. This is a major shift in retirement behavior, and it reflects sweeping cultural changes that range from more flexible employment options for older workers to the baby boomer health and fitness craze.

“Over the past 10 years, we saw the share of people claiming at 62 fall about 10 percent for men and 8 percent for women,” he said. “That’s a pretty big decline in 10 years’ time.”

Sixty-two year olds still constitute the largest single group of new applicants every year, regardless of age. That’s why the significant decline in their application rate is notable. Those who sign up for their Social Security checks when they first become eligible – within days or weeks of their 62nd birthday – are known as “early claimers.” People with physically demanding jobs are more likely to do so, because of health problems or unpleasant and exhausting work. …Learn More

Fraud Against Elderly Documented

Chilling. That sums up a documentary about financial fraud against elderly people premiering tomorrow at the Quad Cinema on 13th Street in Manhattan.

“Last Will and Embezzlement” is about fraudsters who seek out vulnerable elderly people suffering from cognitive decline for no other purpose than to exploit their trust and steal their money. It’s not uncommon for these con men and women to be family.

By first-time producers Pamela Glasner and Deborah Louise Robinson, the film would’ve benefitted from more reporting and more focus – they try to do too much when they get into court systems and solutions. But the film does what journalism does best: It finds people willing to tell personal gripping stories – not easy to do – and gives them a voice.

  • Mickey Rooney, 91, relived his searing emotional pain on screen, as he recounted how his own nephew “swindled” his money years ago.
  • An elderly woman with Alzheimer’s was persuaded by a mortgage broker to take out a complex reverse mortgage, which resulted in foreclosure on her home and a legal battle waged by her children. “My mother was incapable of understanding any of this,” her daughter said. …
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I’ll Save More – Just Not Today Please

We know that not enough Americans save for retirement. Behavioral finance professor Shlomo Benartzi devised a way to fix it – quite awhile ago, in fact.

To ease the pain of saving money, Benartzi and economist Richard Thaler designed a now-famous program in which employees can commit to increase their 401(k)s savings when they get a raise.

Saving is painful because it requires sacrifice, but committing to save money that one doesn’t yet have synchs with human psychology. In 1998, Benartzi and Thaler tested their theory on blue-collar workers in a Midwestern manufacturing plant, and it worked.

The key to saving, Benartzi said, is “embarrassingly simple but extremely powerful.”

The finding was nothing short of ginormous, though employer adoption has been modest. David Wray, president of the Plan Sponsor Council of America, estimated that about 10 percent of U.S. employees with 401(k) plans at work have automatic savings increases, typically at raise time. It’s much more common among mega-employers, he said.

If you’ve heard about behavioral economics but haven’t had time to learn what it’s really about, this 15-minute TED video in which Benartzi explains is an excellent start.

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The Family That Dines Together…

New research adds a dash of spice to our understanding of how people handle their personal financial matters: families who dine together grow wealthy together.

Three professors at the University of Georgia have discovered that families who commit to gather regularly around the dinner table – or, presumably, dine out or cook together – are better prepared financially and will accumulate more wealth faster.

As with any statistical analysis, their research can’t prove cause and effect.  Is it that dining together causes wealth to go up, or is that families who know how to handle their finances also tend to be the type of people who enjoy meals together?…Learn More

Friends around a dinner table

Young Adults Face Unique Money Issues

Many young adults right out of college are planning career moves or marriage – while grappling with complex financial issues.

Student loans weigh them down. And despite the improving job market, it’s still tough to find a job. Wages and salaries for those who are employed are stagnant in many industries. Thanks to the proliferating opportunities for e-shopping, young adults also face more temptations to buy than any previous generation.

“I feel like I’m definitely in the lion’s den,” said Eric Bell, who, at 28, is trying to get his financial education website for 20-somethings, YoBucko, off the ground. A former private banker, he is also looking for a job in his field, paying off student loans, and cheering on his girlfriend in her attempt to buy her first home.

Below are a few previous Squared Away posts written with young adults in mind. A link is provided at the end of each article’s title, or you can join the conversation on Facebook.

  • Young Adults Adrift in E-Spending Ocean
    PayPal, Groupon, smartphone apps that pay for store purchases, online retailers galore – technology has made shopping a breeze. Young adults unfamiliar with the old-fashioned cash economy may not realize how damaging electronic commerce can be to their budgets. …

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