How money experts handle their own finances

[November 12, 2014]  By Linda Stern

NEW YORK (Reuters) - We personal finance writers really do eat our own cooking.

I don't mean that in the metaphorical sense in which it is usually used - the question of whether we follow our own advice is complex. But when 25 of us got together recently for a potluck meal, we found that we all literally ate a lot.

While we were socializing, we did a little informal survey of our own financial behavior. Promised anonymity, participants from the most well-known magazines, wire services, websites and newspapers answered questions about how we invest for retirement, manage credit, buy insurance and more when our own cash is on the line.

I'm happy to report that for the most part, we do the same things we tell our readers to do. One exception: While many of the participants said they recommend target date funds to readers and relatives, the vast majority of participants do not put their own money in target date funds.

"I probably would if I were starting today," said one.

Here are more insights into how a statistically insignificant but influential group of personal finance journalists handle their own financial decisions.

-- We have bought into the idea of index investing. Of 21 people, all but one said they invest "primarily" in index mutual funds and exchange-traded funds that passively track indexes.

-- We like our cash rewards credit cards. Four cash-back cards emerged as the most popular in the room: The Capital One Venture Rewards card is carried most often; close behind was the American Express Blue Cash Preferred card, the American Express Fidelity Investment Rewards Card and the Citi Dividend Rewards Card (an old cash-back card that is no longer offered and has been replaced by the Citi Double Cash Card.) Other cards mentioned by name were also cash-back cards and travel rewards cards.

-- We are less enamored of our debit cards. Eight of us only use our debit cards as ATM cards and another four don't have debit cards at all. Four of us use debit cards regularly for shopping.

-- We pay off our balances. Fourteen of the 20 who responded said they "never" carry a credit card balance and the rest said they tried not to but did sometimes carry a balance.

-- We trust our own advice. Only two people said they worked with financial advisers, and one of those said it was just for year-end tax planning and a once-a-year review. A dozen others said they did not work with any financial advisers other than themselves.

- We do not buy long-term care insurance. Of the fourteen people who answered that question, only one said she owned a policy. Thirteen said they did not. The group may have skewed too young for this question; a couple of people said they would like to buy a long-term care policy.

-- Almost every single one of us has an emergency fund. About two-thirds of us do our own taxes, often with Intuit's TurboTax program.

-- The vast majority of us have Roth individual retirement accounts. Looks like we eat our own cooking after all.

(Linda Stern is a Reuters columnist. The opinions expressed are her own. The Stern Advice column appears weekly, and at additional times as warranted. Linda Stern can be reached at [e-mail]; She tweets at http://www.twitter.com/lindastern .; Read more of her work at http://blogs.reuters.com/linda-stern; Editing by Dan Grebler)

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