Timely moves for changing values

(MONEY Magazine) -- The results of a recent MONEY survey that asked how the economy has changed American's financial values suggest a few smart financial moves you should make now. Among them:

Don't play it too safe

More than four out of 10 respondents said they'd feel better with their money under the mattress than in the stock market. Yet focusing too much on avoiding losses rather than growing your portfolio may leave you short of your long-term financial goals, warns Dwight Raiford, a senior financial planner at MetLife in New York.

"If you're already investing for the long term, there's no need to get more conservative," he says. Remember, too, that the surest way to boost your nest egg is to pump up the amount you're saving -- and to continue saving through thick and thin.

Find the happy medium

As families like the Dhanies learned, if you go overboard on frugality, you won't be able to stick with it, or you'll end up depriving yourself unnecessarily.

"We're not like Mr. Spock, always perfectly rational," says Lee Baker, a planner at Apex Financial Services. "Sometimes we want ice cream because it tastes good, not because we're hungry."

America's new financial values

He recommends incorporating the occasional splurge into your budget by setting goals and rewarding yourself as you reach certain milestones.

If your goal is to add an extra $10,000 or $15,000 to your emergency fund, treat yourself to a massage or a round of golf when you hit the $5,000 threshold. If you want to pay off a home-equity line of credit and you are making $300 monthly payments, spend $300 on yourself once the loan is paid off.

Leave the proper legacy

We're all about family being more important now. But that means more than just spending time together. It also means taking the steps to protect your loved ones financially. Update your will or estate plan. And make sure you have enough life insurance to cover the needs of anyone who is dependent on your income.

"You should also write what we call a family love letter," says Joshua Kadish, wealth manager at Retirement Planning Group in River-woods, Ill. "This spells out where everything is and what your wishes are."

How has the economy changed you?

The letter should explain why you left what you left, and what you hope will happen to personal items that carry emotional significance. You might also use the letter to express your desire, say, that someone in the family carry on with your mission to save the whales.

The idea is to minimize stress and conflict among your loved ones once you have died, and to leave them a legacy that's less about the stuff you've got and more about what you believe in. The findings of the MONEY and Time surveys suggest that goal meshes perfectly with Americans' new financial values.

Read the first part of this article America's new financial values.

Tali Yahalom contributed to this article.