Good Financial Decisions

Texas Tech professors Michael Finke and Sandra Huston along with John Howe of the University of Michigan have discovered a worrisome combination: financial literacy versus confidence in financial decisions. It seems that financial literacy declines by about 1.5 percentage points a year after the age of 60, while the confidence in financial decisions remains steady. This could explain why many seniors are more susceptible to scams and more risk taking.

To help maintain financial literacy the goal is to decrease cognitive decline in older adults; that can be aided by several things. They are:

(1) Aerobic exercise – light, leisurely exercise two to three times a week, such as walking.

(2) Using the computer.

(3) Learning a new challenging skill such as digital photography or quilting.

(4) Playing games.

Be careful though, since brain games costing $200 or more are no guarantee of sharper thinking; some companies have oversold its products and there is little evidence that playing some games improves broad cognitive abilities.