Lie #6 You can bank on a sizable inheritance You know the $41 trillion transfer of wealth that dominated the headlines a few years back, as the younger baby boomers received inheritances from their parents and the older ones passed money to their kids? Chances are, that wave of money is not going to wash over most of us. Part of the rea-son is be-cause our parents are living long-er, more active lives (trekking Machu Picchu and taking private French les-sons in Paris is expensive). And part is due to medical costs: Doctors, medication and home or residential care can eat up a fortune.
Those aren’t the only reasons you should continue to save aggressively despite the prospect of an inheritance. In actuality, according to Boston College economist John Havens, who came up with the $41 trillion figure in the first place (that was his conserva-tivees-timate), only one in five families ever passes money from one generation to another. And among those boomer fam- ilies that did receive inheritances, the average bequest was $64,000. Again:It is up to you to save for your future and teach your kids to do the same.
Lie # 7 The bad news will end when the economy recovers In fact, there is always more bad news com-ing where your finances are concerned, notes Dan Ariely, professor of behavioral economics at Duke University and author of Predictably Irrational. Think about your credit card statement. “Most everyone is surprised when they get their bill,” Ariely says. “People don’t ac-cumulate in their minds the small purchases they make over the month.” (Yet another reason to bank online! It’s extremely easy to check your outstanding balances.)
One more example: Those minor emergencies that crop up every month. We don’t plan for the dryer to break, the car to conk out or the toilet to flood, but those things do happen—sometimes all at once. And although they’re not the same as a cratering stock market or your employer filing for bankruptcy, it pays to remember that even in good times some people lose jobs, get sick or need to replace appliances. There’s nothing like aflush savings account, 760 credit score and an up-to-date résumé to tide you over. Which brings me to:
