Taking your finances back to the basics

To judge from sky-high Wall Street salaries, managing money is such a complicated task that it is worth a hefty price.

Could mere mortals ever hope to try their hand at it and save a few bucks?

Helaine Olen and Harold Pollack, co-authors of the new book "The Index Card: Why Personal Finance Doesn't Have to be Complicated," argue that what you need to know can be written down on a single card and posted on your fridge.

We sat down with Olen to talk about those simple money principles, and why they remain so elusive.

Q: Why do so many of us pay professionals so much money to manage our portfolios?

A: We are all pitched the idea that managing money is hard, and that professionals have some special secret that can help you. In fact, most of this stuff is pretty basic.

I get that people are legitimately busy, and that money management is a task they find unpleasant. So it tends to be put off, or given to someone else like a financial adviser.

A: Save 10-20 percent of your money. Pay down credit-card debt, ideally the full amount every month. Max out your retirement accounts, at least up to the amount of the employer match. Don't invest in individual stocks. Use broad, low-fee index funds instead. Make sure you are properly insured. Only buy a home when you are financially ready.

Q: You have been pretty outspoken that the 401(k) system is not working, and that the system is stacked against most of us. How does that jibe with this book, which suggests people can take control of their future?

A: It is true that I don't think that the 401(k) system works for everyone. On the other hand, it is a fact that we all live within it. I can't get up on my high horse and say we should all boycott 401(k)s. I use mine, and you should use yours, if you have one.

But of course I would like to see the system improved. It is what we have, and we all have to learn how to best take advantage of it. The more attention people pay to investment fees, for instance, the lower they will go.

Q: Since these money precepts are so simple, where do most people go off-track?