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Alan Krueger

Family finances: financial rules to live by

Senior editor Anne Kates Smith interviews Alan Krueger, a professor of economics and public affairs at Princeton University and the author of Explorations in Economics, a high school textbook with lessons for adults as well as students.

KIPLINGER: What are the most common financial mistakes people make?

KRUEGER: There are two in particular. The first is the tendency to choose smaller rewards in the near term at the expense of a larger long-term goal. That's partly why people save too little for the future. It's described in my book as being impatient, not forward-looking enough. Second, people, especially men, tend to be overconfident. This could lead to not diversifying...