1. Time is on your side.

Those with more years until retirement can afford to put a greater percentage of their assets in the stock market.

2. Stocks mean risk and return.

Those with a higher tolerance for volatility should put more money in the stock market than those in the same age group who have a lower tolerance.

3. College savings funds need stocks.

Since college costs are rising faster than inflation, no other investment will keep pace as well as stocks. Invest more in stocks when your kids are young, and as they get older move more money into bonds.

4. Get professional advice.

One of the best ways to develop an effective asset allocation plan is to consult a qualified financial planner.

5. Allocation is the key to achieving your goals.

Studies have shown that asset allocation is the single most important factor in determining returns from investing.

6. Know your stock funds.

Before you set up your asset allocation plan, you must find out the nature of the companies purchased by the mutual funds you own. It’s not enough to go by the names of the funds themselves, either. In search of performance, far too many fund managers buy stocks that barely fit their portfolio’s explicit investing parameters. So your “income” fund may, in practice, contain many stocks that should be considered “growth,” or vice versa.

7. Know your bond funds.

Similarly, you must learn the same about the bond funds you own.

8. Don’t rely on software alone to build a savings plan.

Software programs might not go far enough to devise your asset-allocation plan.

9. Determine your long-term goals.

Do you want to buy a sailboat after you retire? Or pay off your mortgage so you can write a novel? Figure out what your long-term goals are, and what they will cost.

10. Get started.

It’s never too late to get started, and it’s never too late to revamp or revise an asset-allocation plan.

The above post is from the CNN Money series called “Money 101.”

1. Save as much as you can as early as you can.

Though it’s never too late to start, the sooner you begin saving, the more time your money has to grow. Gains each year build on the prior year’s — that’s the power of compounding, and the best way to accumulate wealth.

2. Set realistic goals.

Project your retirement expenses based on your needs, not rules of thumb. Be honest about how you want to live in retirement and how much it will cost. Then calculate how much you must save to supplement Social Security and other sources of retirement income.

3. A 401(k) is one of the easiest and best ways to save for retirement.

Contributing money to a 401(k) gives you an immediate tax deduction, tax-deferred growth on your savings, and — usually — a matching contribution from your company.

4. An IRA also can give your savings a tax-advantaged boost.

Like a 401(k), IRAs offer huge tax breaks. There are two types: a traditional IRA offers tax-deferred growth, meaning you pay taxes on your investment gains only when you make withdrawals, and, if you qualify, your contributions may be deductible; a Roth IRA, by contrast, doesn’t allow for deductible contributions but offers tax-free growth, meaning you owe no tax when you make withdrawals.

5. Focus on your asset allocation more than on individual picks.

How you divide your portfolio between stocks and bonds will have a big impact on your long-term returns.

6. Stocks are best for long-term growth.

Stocks have the best chance of achieving high returns over long periods. A healthy dose will help ensure that your savings grows faster than inflation, increasing the purchasing power of your nest egg.

7. Don’t move too heavily into bonds, even in retirement.

Many retirees stash most of their portfolio in bonds for the income. Unfortunately, over 10 to 15 years, inflation easily can erode the purchasing power of bonds’ interest payments.

8. Making tax-efficient withdrawals can stretch the life of your nest egg.

Once you’re retired, your assets can last several more years if you draw on money from taxable accounts first and let tax-advantaged accounts compound for as long as possible.

9. Working part-time in retirement can help in more ways than one.

Working keeps you socially engaged and reduces the amount of your nest egg you must withdraw annually once you retire.

10. There are other creative ways to get more mileage out of retirement assets.

For instance, you might consider relocating to an area with lower living expenses, or transforming the equity in your home into income by taking out a reverse mortgage.

The above post is from the CNN Money series called “Money 101.”

1. Americans are loaded with credit-card debt.

The average American household with at least one credit card has nearly $10,700 in credit-card debt, according to CardWeb.com, and the average interest rate runs in the mid- to high teens at any given time.

2. Some debt is good.

Borrowing for a home or college usually makes good sense. Just make sure you don’t borrow more than you can afford to pay back, and shop around for the best rates.

3. Some debt is bad.

Don’t use a credit card to pay for things you consume quickly, such as meals and vacations, if you can’t afford to pay off your monthly bill in full in a month or two. There’s no faster way to fall into debt. Instead, put aside some cash each month for these items so you can pay the bill in full. If there’s something you really want, but it’s expensive, save for it over a period of weeks or months before charging it so that you can pay the balance when it’s due and avoid interest charges.

4. Get a handle on your spending.

Most people spend thousands of dollars without much thought to what they’re buying. Write down everything you spend for a month, cut back on things you don’t need, and start saving the money left over or use it to reduce your debt more quickly.

5. Pay off your highest-rate debts first.

The key to getting out of debt efficiently is first to pay down the balances of loans or credit cards that charge the most interest while paying at least the minimum due on all your other debt. Once the high-interest debt is paid down, tackle the next highest, and so on.

6. Don’t fall into the minimum trap.

If you just pay the minimum due on credit-card bills, you’ll barely cover the interest you owe, to say nothing of the principal. It will take you years to pay off your balance, and potentially you’ll end up spending thousands of dollars more than the original amount you charged.

7. Watch where you borrow.

It may be convenient to borrow against your home or your 401(k) to pay off debt, but it can be dangerous. You could lose your home or fall short of your investing goals at retirement.

8. Expect the unexpected.

Build a cash cushion worth three months to six months of living expenses in case of an emergency. If you don’t have an emergency fund, a broken furnace or damaged car can seriously upset your finances.

9. Don’t be so quick to pay down your mortgage.

Don’t pour all your cash into paying off a mortgage if you have other debt. Mortgages tend to have lower interest rates than other debt, and you may deduct the interest you pay on the first $1 million of a mortgage loan. (If your mortgage has a high rate and you want to lower your monthly payments, consider refinancing.)

10. Get help as soon as you need it.

If you have more debt than you can manage, get help before your debt breaks your back. There are reputable debt counseling agencies that may be able to consolidate your debt and assist you in better managing your finances. But there are also a lot of disreputable agencies out there.

The above post is from the CNN Money series called “Money 101.”

1. When it comes to teaching kids about money, the sooner the better.

Up until they start earning a living, and sometimes well beyond that, kids are apt to spend money like it grows on trees. This lesson will help you put your children on the road to handling money responsibly.

Long before most children can add or subtract, they become aware of the concept of money. Any 4-year-old knows where their parents get money – the ATM, of course. Understanding that parents must work for their money requires a more mature mind, and even then, the learning process has its wrinkles. For example, once he came to understand that his father worked for a living, a 5-year-old asked, “How was work today?” “Fine,” the father replied. The child then asked, “Did you get the money?”

2. Once they learn how money works, children often display an instinctive conservatism.

Instant gratification aside, once they learn they can buy things they want with money – e.g., candy, toys – many children will begin hoarding every nickel they can get their hands on. How this urge is channeled can determine what kind of financial manager your child will be as an adult.

3. Seeds planted early bear fruit later.

It’s important to work on your child’s financial awareness early on, for once they’re teenagers, they are less likely to heed your sage advice. Besides, they’re busy doing other things – like spending money.

4. An allowance can be an effective teaching tool.

When your kids are young, giving them small amounts of money helps them prepare for the day when the numbers will get bigger.

5. Teenagers and college-age kids have bigger responsibilities.

Checking accounts, credit cards and debt are as elemental to the college experience as books and keg parties. Teaching high-schoolers about banking and credit will make them more savvy when they leave the nest.

6. Even investing should be learned early.

High schoolers can and should be taught about the market – using real money.

The above post is from the CNN Money series called “Money 101.”

Employee stock options used to be reserved for the executive suite. No longer. From cash-poor Silicon Valley startups to old-line manufacturing and service firms, more and more companies are offering stock options to the rank and file as well.

The National Center for Employee Ownership (NCEO) estimates that about 9 million Americans hold stock options and that the plans account for at least several hundred billion dollars.

In 1990 there were only about 1 million workers covered by a few hundred stock option plans. Today there are nearly ten times that many employees participating in some 3,000 plans.

Still, management continues to receive the lion’s share of stock option grants. Of companies that grant options to more than half their employees, nonmanagement receives 45 percent of total options allocated, on average.

At the largest companies, this average is 29 percent. At biotech and computer firms, however, 55 percent of option grants go to nonmanagers.

1. Employee stock options are no longer reserved for the executive suite. From cash-poor Silicon Valley startups to old-line manufacturing and service firms competing for top talent, more and more companies are offering stock options to the rank and file as well.

2. Stock options are still popular. According to the National Center for Employee Ownership as many as 9 million employees participate in some 3,000 plans. In 1990, only 1 million U.S. employees had them.

3. Stock options can be expensive to exercise. The lesson of the dot-com crash: Improperly exercising stock options can cause real financial headaches, particularly when it comes to paying taxes on your profits. Even if you keep the stock you purchased, you’ll still have to pay taxes. But if you’re careful not to overreach, options can be a lucrative benefit.

4. You’ll see these common terms: An employee stock option gives you the right to buy (“exercise”) a certain number of shares of your employer’s stock at a stated price (the “award,” “strike,” or “exercise” price) over a certain period of time (the “exercise” period).

5. There are two common types of plans: Employee stock options come in two basic flavors: nonqualified stock options and qualified, or “incentive,” stock options (ISOs). ISOs qualify for special tax treatment. For example, gains may be taxed at capital gains rates instead of higher, ordinary income rates. Incentive options go primarily to upper management, and employees usually get the nonqualified variety.