Economics

Despite having more than enough money to retire, some people simply cannot leave their jobs.

The main indexes finished well off their session highs after a disappointing batch of corporate earnings reports.

New research from the University of South Australia, or UniSA, suggests that building smart money habits may do more than improve your financial health — it can also significantly boost your mental well-being. The study analyzed data from more than 17,000 people and found that those who reported managing their money well, including saving money regularly and paying off credit cards on time, tended to have not only better mental health, but also more energy, closer relationships and greater overall well-being. That might not come as a huge surprise to anyone who’s ever felt the weight of money stress. Living paycheck to paycheck, losing control of your debt balances or feeling like you’re one emergency away from derailing your savings is exhausting — and over time, it can take a toll on your mental health. 2 key money moves to help improve your mental health UniSA’s research found that regularly saving money and paying down debt is associated with noticeably better mental health. On the flip side, people who struggle to manage their finances tend to face greater emotional challenges, especially when compounded by cost-of-living pressures or existing financial strain. Both factors can take a serious toll on mental well-being. Money is one of the primary sources of stress for most U.S. adults. Surveys consistently show that financial concerns top the list of what keeps people up at night. A recent study from Empower found that Americans spend nearly four hours a day thinking about money — everything from bills and rising prices to housing costs, debt and retirement savings. That’s the mental equivalent of taking on a part-time job you never applied for. That kind of mental load adds up. And over time, it can seriously wear you down. “We aren’t very open about our financial realities, and in our culture, we associate having debt with low willpower or poor decision-making, rather than recognizing it as a means to an end or the best decision someone could make in a tough moment,” says Lindsay Bryan-Podvin, a financial therapist and founder of Mind Money Balance. “That debt stigma makes it hard for people to be compassionate toward themselves.” But reframing the way you think about money — and taking even small steps to improve your financial health — can help ease both emotional and financial burdens. The UniSA study highlights two key strategies that finance experts say can positively impact your mental health: Paying down debt Dealing with debt can take a psychological toll, especially with the pressure to meet certain financial milestones at various stages of life. UniSA’s research emphasizes that while financial hardship can be deeply disheartening, it also hampers long-term economic prospects. People may become reliant on borrowing for basic needs or miss out on opportunities to grow their wealth through other investments. “That’s why healthy financial behavior is important to build stability and long-term security, allowing goal achievement, independence and access to opportunities, as well as reduced stress and good mental health,” Rajabrata Banerjee, professor of applied economics and member of UniSA’s Center for Markets, Values and Inclusion, notes in the study. Still, even just small steps toward tackling debt can help you regain control of your finances. “Every time we take action toward improving our financial well-being, we prove to ourselves that we have the capacity and the necessary skill set to handle money,” says Bryan-Podvin. “It’s OK if it doesn’t go according to plan. Instead of giving up, any amount of progress toward paying down debt or building up savings should be celebrated.” If you’re feeling overwhelmed, start by listing out your balances. Write down everything that you owe, along with interest rates, minimum payments and due dates. Seeing it all laid out can help you grasp what you’re dealing with and organize a plan. A common strategy is to prioritize the balance with the highest interest rate first (also known as the avalanche method) since that’s the one costing you the most over time. Next, consider revisiting your budget. If keeping up with minimum payments has started to feel unsustainable, adjusting your budget could help you reprioritize your spending and make room for debt repayment. It can also be helpful to automate payments where possible. Setting debt payments on autopay allows you to stick to a long-term plan without having to devote brain space to it each month. This way, you can set it and forget it. If your due dates fall too closely together, you can also ask your lender to shift one. But keep in mind it may take a billing cycle to kick in. Overall, paying down debt is about making a mindset shift and learning not to associate it with the shame that often comes with owing money. “When we assign moral superiority to things like saving, it can create pressure and shame,” says Bryan-Podvin. “Add in rising costs and unstable incomes, and that pressure becomes a chronic stressor.” Building up your savings Saving money can feel like a massive to-do when you’re already stretched thin. But the UniSA study highlights how even setting aside a small amount each month can help you start a healthy habit while prioritizing your mental health. “Instead of telling yourself, ‘I should have more saved by now,’ shift to, ‘I’m working on saving $25 per week in a high-yield savings account,’” says Bryan-Podvin. Shifting your perspective can bring a sense of relief while you make progress. A good place to begin is by opening a high-yield savings account, or HYSA. These accounts typically offer significantly higher interest rates compared to traditional savings accounts. Currently, some of the best HYSAs are offering APYs as high as 4.30%. If you’re trying to grow your emergency fund or just get in the habit of setting money aside, a HYSA can help your savings grow faster than in your checking account or standard savings account. Once your account is set up, consider automating your savings. You can schedule automatic transfers from your checking account to your

What to know about current mortgage rates: Mortgage rates moved lower yesterday. According to Money’s daily survey, the 30-year fixed-rate loan averaged 6.713%, down by 0.023 percentage points. Rates on almost all other loan types decreased as well. Rates on the 15-year fixed-rate mortgage slipped under 6%, averaging 5.997%. Daily rates have trended lower over the past few days as a result of the lower-than-expected jobs report on August 1, which signaled a slowing economy. How low rates fall, however, is unknown. Prospective borrowers who find a comfortable rate should consider locking it in. According to Freddie Mac’s benchmark survey for the week ending August 7, the rate on a 30-year fixed-rate loan averaged 6.63%, a 0.09 percentage point drop from the previous week. It’s the lowest the rate has been since April. The rate on a 15-year fixed-rate loan averaged 5.75%, down by 0.10 percentage points. Mortgage rate trends On August 1, the Bureau of Labor Statistics reported that only 73,000 jobs were added to the U.S. economy in July, a much lower number than economists had anticipated. The weak employment data sent yields on the 10-year Treasury tumbling, which in turn caused mortgage rates to dip over the past few days. If further signs of an economic slowdown appear, this current downward trend could have more staying power than previous downturns. However, there is still some uncertainty over which way the economy will go. New tariffs are set to go into effect today, and their impact on consumer prices could push inflation higher, causing rates to remain elevated throughout the remainder of the year. Average mortgage and refinancing rates for August 7, 2025 Average mortgage rates for August 7, 2025 Loan terms Latest rates 30-year fixed-rate mortgage 6.713% ? 0.023% 15-year fixed-rate mortgage 5.997% ? 0.02% 7/1 ARM 6.208% <=> 0% 10/1 ARM 6.564% ? 0.002% Average mortgage refinance rates for August 7, 2025 Loan terms Lastest rates 30-year fixed-rate refinance loan 6.761% ? 0.012% 15-year fixed-rate refinance loan 6.02% ? 0.019% 7/1 adjustable-rate refinance loan 6.195% ? 0.02% 10/1 adjustable-rate refinance loan 6.568% ? 0.002%   Source: Money.com Money’s daily mortgage rates are a national average and reflect what a borrower with a 20% down payment, no points paid and a 780 credit score — considered an excellent score that qualifies a borrower for the best rates — might pay if they applied for a home loan right now. Each day’s rates are based on the average rate 8,000 lenders offered to applicants the previous business day. Your individual rate will vary depending on your location, lender and financial details. These rates differ from Freddie Mac’s, which represent a weekly average based on a survey of quoted rates offered to borrowers with strong credit, a 20% down payment and discounts for points paid. If you’re offered a higher rate than expected, make sure to ask why and compare offers from multiple lenders. (Money’s list of the Best Mortgage Lenders is a good place to start. Homeowners considering a mortgage refinance should consider our list of the Best Mortgage Refinance Companies.) Use Money’s mortgage calculator to estimate your monthly payment, considering different rate scenarios. Freddie Mac’s mortgage rates for the week ending August 7, 2025 Freddie Mac mortgage rate trends For its weekly rate analysis, Freddie Mac looks at rates offered for the week, ending each Thursday. The average rate roughly represents the rate a borrower with strong credit and a 20% down payment can expect to see when applying for a mortgage right now. Borrowers with lower credit scores will generally be offered higher rates. What you need to know about current mortgage rates Mortgage rates, along with home prices, are an important part of the formula for homeownership. Most importantly, they can be key in determining how much home you can afford to buy. This guide answers some of the most common questions about rates and how they affect the housing market. Types of mortgage rates When shopping for a mortgage, you may be offered two types, each with a different interest-rate arrangement: fixed-rate and adjustable-rate loans. Understanding the difference between the two is important when deciding which will best suit your needs. Fixed-rate mortgages As the name implies, fixed-rate loans have a stable interest rate that won’t change for the loan’s duration. The most common term lengths are 30 and 15 years, although some lenders offer other options. Generally, the interest rate on a 30-year loan will be higher than that on a 15-year loan, but the monthly payment will be lower because you’re extending the payback period. Most home buyers prefer fixed-rate loans because they don’t change; the monthly mortgage payments are relatively constant throughout the life of the loan. However, other costs typically rolled into the mortgage, like homeowners’ insurance and property taxes, can change, leading to variations in your monthly payment over time. Adjustable-rate mortgages (ARMs) The interest rate on adjustable-rate mortgages does not adjust from the beginning. Rather, the rate will be fixed for a predetermined number of years. Once that fixed period ends, the rate becomes variable and adjusts at a regular interval, known as the “adjustment period,” with the period length defined in the mortgage terms. Depending on market conditions, rates could increase or decrease at the end of each period. The most common terms for ARMs are 5/6 loans, in which the interest rate is fixed for five years and then starts to adjust every six months. There are also options for 7/6 loans and 10/6 loans. Because the interest rates on ARMs tend to be lower than those on fixed-rate loans during the initial (fixed-rate) phase, these adjustable loans are a good option for borrowers who don’t plan to stay in the home beyond the fixed-rate period of the loan. Other information you should know about mortgage rates When comparing rates from different lenders, you’ll see two different numbers: the interest rate and the annual percentage rate (APR). The interest rate is what a lender will charge on the principal amount

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The market’s rough start to the year seems like a distant memory now. After flirting with a correction in the first quarter amid tariff-induced volatility, Wall Street recovered and by the end of July, all three major indices had set record highs. With the S&P 500 up 28% from its year-to-date low on April 8 and equity funds continuing to attract significant investment, 2025 is on pace to be yet another year of $1 trillion-plus inflows. But for panicked investors who sidelined their cash or leaned heavily into fixed income and cash alternatives earlier this year, the opportunity costs of remaining too conservative could be mounting. For retirement savers in particular, determining an appropriate risk management strategy can prove invaluable over time. Money spoke with Stephanie Nanney, partner and director of qualified plans at wealth management firm Private Vista, to better understand what that means for retirement planning amid the current bull market and into the future. Target-date funds: the most popular retirement option Because of their simplicity, automatic rebalancing and inherent diversification, target-date funds have become the most popular 401(k) investment vehicle. In many cases, target-date funds are also the default option in employer-sponsored plans, making them the ideal set-it-and-forget-it retirement investment. Also called lifecycle funds, they aim to simplify retirement planning by automatically adjusting allocations as a person’s intended retirement date approaches. At predetermined intervals, a target-date fund’s allocations become more conservative. Positions shift from growth-focused assets like stocks to more stable assets like bonds the closer you get to retiring (and needing that money). “The target-dates certainly have their place for [offering] the ability to — first and most importantly — be invested,” says Nanney. “So step one is getting yourself invested. Step two is determining what allocation is right for you.” But in almost all cases, target-date funds have at least some exposure to fixed income. That means even for younger investors with longer investment horizons, some of the upside potential of equities is sacrificed in favor of safety. “The glide path towards the target date is making you more conservative as you age,” says Nanney, who is also a certified financial planner. Investors should ask themselves, “If I’m not retiring for 15 years, why am I thinking about making it more conservative?” Because target-date funds automatically rebalance over time, those allocations could become misaligned with an investor’s individual risk tolerance. Nanney uses workers in their 40s as an example. Because these people are at the midpoints of their careers, target-date funds’ automatic rebalancing can begin tapering their stock exposure down to, say, 85% to 90%. But people in that demographic may, in reality, be comfortable with being 100% allocated to equities. An easy solution to avoiding these misalignments is knowing your options. Nanney says she always educates her plan participants so they understand that even if they’re planning to retire in 2045, for example, they can invest in the 2055 target-date fund so the allocations are more aggressive over a longer period. When to make your 401(k) more conservative Investors must determine when it’s appropriate to introduce a significant allocation to fixed income, according to Nanney. That could be based on age, risk profile or accumulation. But she stresses that, despite it being an individual question, this approach requires getting started early. If, over the course of decades, your nest egg isn’t developed with a focus on growth, it could delay the transition into fixed income — and expose your portfolio to risk at a time when it should be getting more conservative. For many, that will require drastically changing their financial habits. Data suggests that most younger Americans aren’t saving for retirement. Findings from an Arta Finance survey suggest that 54% of Gen Z respondents began investing by age 21 compared to 31% of millennials and 27% of Gen X. However, just 30% of Gen Z respondents — those born between 1997 and 2012 — say they’re actively saving for retirement compared to 51% of millennials (1981 to 1996) and 49% of Gen X (1965 to 1980). Starting to save for retirement at a younger age and having exposure to equities during the accumulation phase is what enables investors to transition into enjoying what Nanney calls the cash cushion later in life. While the amount needed for that cash cushion is different for everyone, she says, for some it can be as much as three years’ worth of living expenses. “Fill that bucket up with dividends, interest and potentially capital gains distributions, depending on the appropriate level of aggressiveness,” says Nanney. “That diversified portfolio of fixed income and some growth is a place where we want to see our clients be able to kick off their RMDs and be able to live off of them.” What does access to private equity mean for 401(k) savers? In July, the Trump administration announced an effort to give employers and 401(k) plan administrators guidance on how to incorporate private investments within retirement accounts. But the illiquidity and elevated risk that accompanies private markets can run opposite to the historically safe, slow and steady growth offered by retirement plans. Nanney says private investments in retirement accounts are too speculative for the everyday investor. “What you are trying to accomplish with a 401(k) is getting people to invest in a diversified portfolio that will grow over time,” she explains. “It is very hard for average investors to not follow trends and get themselves in trouble.” This year has been a poster child for diversification, according to Nanney. But diversification doesn’t have to involve speculative, volatile, illiquid and higher-risk assets like private equity, private debt or reinsurance. “Speculative stuff, in my opinion, should occur when you have a certain level of wealth that allows you to invest outside of your 401(k),” she says. More from Money: What Financial Advisors Are Telling America’s Richest People to Do With Their Money Stock Market Analysts Are (Cautiously) Optimistic as Tariff Fears Fade We Asked AI Which Stocks to Buy in August. Here’s

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