Spending Archives - Page 2 of 2

December 13, 2021

8 rules for saving, borrowing and spending money [Personal Finance]

The best personal finance advice is tailored to your individual situation. That said, a few rules of thumb can cut through the confusion that often surrounds money decisions and help you build a solid financial foundation.

The following guidelines for saving, borrowing, spending and protecting your money are culled from nearly three decades of writing about personal finance.

1. PRIORITIZE SAVING FOR RETIREMENT

In an ideal world, you’d start saving with your first paycheck and keep going until you’re ready to retire. You also wouldn’t touch that money until retirement. Even if you can’t save 15{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of your pre-tax income for retirement, as recommended by Fidelity and other financial services firms, anything you put aside can help give you a more comfortable future. Aim to take full advantage of any company match you get from a 401(k) at work — that’s free money — and borrow against or cash out retirement funds only as a last resort.

2. SAVE FOR A RAINY DAY

You may have read that you need an emergency fund equal to three to six months of expenses, but it can take years to save that much. That’s too long to put off other priorities, like saving for retirement. A starter emergency fund of $500 can be your first goal, and then you can build it up. While you’re saving, try to create other sources of emergency cash, such as a Roth IRA (you can pull out your contributions at any time without taxes or penalties), space on your credit cards or an unused home equity line of credit.

3. SAVE FOR COLLEGE

Got kids? Open a 529 college savings plan and contribute at least the minimum, which is typically $15 to $25 a month. Retirement savings comes first, but anything you can save will reduce how much your child may need to borrow. Also, research shows the simple act of saving for college increases the chances that a child from a low- to moderate-income family will go to college.

4. BORROW SMART FOR COLLEGE

A college degree can pay off in higher earnings, but lenders may allow you to borrow far more than you can comfortably repay. If you’re borrowing for your own education, consider limiting your total debt to what you expect to make your first year out of school. If you’re a parent borrowing for a child’s education, aim for payments that are no more than 10{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of your after-tax income and that still allow you to save for retirement. If your payments are higher than 10{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of your after-tax income, investigate income-driven repayment plans that could bring down your costs.

5. USE CREDIT CARDS AS A CONVENIENCE

Credit cards offer convenience and can protect you from fraud and disputes with merchants. But credit card interest tends to be high, so don’t carry credit card balances if you can avoid it. If you routinely pay your balances in full, look for a rewards card with a sign-up bonus that returns at least 1.5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of what you spend.

6. FINANCE YOUR HOME SMARTLY

If you want to be a homeowner, the best time to buy your first home is when you’re financially ready and in a position to stay put for a few years. Opt for a mortgage rate that’s fixed for as long as you plan to remain in the home, and don’t make extra payments against the principal until you’ve paid off all other debt and are on track for retirement.

7. BUY USED VEHICLES AND DRIVE THEM FOR YEARS

Buying a car right now isn’t a great idea; supply-chain kinks and other pandemic-related issues have inflated the cost of both new and used cars. In general, though, buying a used car can save you a ton of money over your driving lifetime, as can driving your car for many years before replacing it. These days, a well-maintained car can last 200,000 miles without major issues, according to J.D. Power. This means you can get roughly 13 years of service out of your car if you drive it 15,000 miles a year. Ideally, you would pay cash for cars. If you need to borrow, try to limit the term of your loan to a maximum of five years.

8. INSURE AGAINST CATASTROPHIC EXPENSES

Use insurance to protect yourself against catastrophic expenses rather than smaller costs that you can easily pay out of pocket. If you have sufficient savings, consider raising the deductibles on your policies to save money on premiums. Be careful about high-deductible health insurance policies, though. Having a high deductible could cause you to put off medical care, and it’s better to err on the side of safety when it comes to health.

This column was provided to The Associated Press by the personal finance site NerdWallet. The content is for educational and informational purposes and does not constitute investment advice. Liz Weston is a columnist at NerdWallet, a certified financial planner and author of “Your Credit Score.” Email: lweston@nerdwallet.com. Twitter: @lizweston.

RELATED LINK:

NerdWallet: Personal finance defined: The guide to maximizing your money https://bit.ly/nerdwallet-personal-finance-defined

October 31, 2021

US Consumer Spending up a Modest 0.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} With Inflation High | Business News

By MARTIN CRUTSINGER, AP Economics Author

WASHINGTON (AP) — American buyers slowed their expending to a get of just .6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in September, a cautionary indication for an financial state that remains in the grip of a pandemic and a extended bout of superior inflation.

At the very same time, a critical inflation barometer that’s carefully followed by the Federal Reserve surged 4.4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} previous month from a year previously — the quickest this kind of improve in 3 many years. And wages, a vital component of inflation, jumped .8{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} — 2 times the August attain and a reflection of the increasing skill of staff to compel higher pay out from providers that are desperate to fill a in the vicinity of-report quantity of readily available employment. A separate report Friday confirmed that wages jumped 1.5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in the 3 months that ended in September, the most on records relationship back again 20 several years.

Sharply increasing rates, in section a final result of offer shortages, have imposed a developing stress on American households. For months, yearly inflation has remained much previously mentioned the modest once-a-year prices of 2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} or a lot less that prevailed just before the pandemic economic downturn.

Total, Friday’s report from the Commerce Office confirmed that particular incomes, which provide the gasoline for expending, fell 1{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in September, the sharpest decline in 4 months. That occurred since the sizable attain in wages was extra than offset by the class of income that consists of authorities advantages: It plunged 7{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, reflecting the expiration of emergency federal applications, which includes expanded unemployment benefits.

Political Cartoons

The economic climate, while escalating, is even now remaining hampered by COVID-19 cases and persistent source shortages. On Thursday, the governing administration believed that the financial state slowed sharply to a 2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} yearly advancement rate in the July-September period, the weakest quarterly expansion considering the fact that the restoration from the pandemic recession started last yr.

For the July-September quarter as a total, customer spending, which fuels about 70{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of in general financial exercise, weakened to an annual growth charge of just 1.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}. That was down substantially from the former quarter.

Economists stay hopeful for a bounce-back in the present quarter, with confirmed COVID circumstances declining, vaccination prices growing, businesses investing and far more Us residents venturing out to devote dollars. Lots of analysts think the economic system will rebound at a reliable once-a-year advancement amount of at the very least 4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} this quarter.

Staff have attained the higher hand in the work market place for the to start with time in at minimum two many years, and they are commanding increased pay back, greater advantages and other perks like versatile get the job done hrs. With far more careers available than there are unemployed individuals, authorities info demonstrates, companies have been forced to get the job done more durable to entice staff members.

Greater inflation is feeding on absent at some of the wage improves, but in latest months general pay back has kept up with increasing selling prices. The 1.5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} enhance in wages and salaries in the third quarter stayed forward of the 1.2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} improve in inflation for the duration of that period of time, economists said.

In Friday’s report on client shelling out, the govt stated that last month’s .6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} boost marked a slowdown from the 1{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} gain in August. Buys of products slowed to a .5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} increase in September, when compared with a 1.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} boost in August. Additional Individuals have been shifting their expending absent from the physical merchandise that a lot of acquired although hunkered down at residence to paying out on companies, from haircuts to airline tickets to restaurant meals. In some cases, a lack of merchandise, similar to bottlenecked supply chains, are maintaining a lid on items purchases.

The 12-thirty day period enhance of 4.4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in a cost gauge favored by the Fed, the premier these kinds of rise since early 1991, mirrored a continuation of the inflation pressures that have intensified in latest months. So-referred to as core inflation, which excludes unstable energy and foods charges, rose by a a bit milder 3.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} around the earlier year.

Most economists be expecting buyer investing to strengthen as provide difficulties simplicity. The resilience of such investing has fueled businesses’ need for employees, and in quite a few instances they just can’t uncover enough. In September, businesses included just 194,000 careers, a second straight tepid get and a signal that the pandemic however experienced a grip on the overall economy with numerous companies battling to catch the attention of candidates to fill work. Quite a few men and women who misplaced positions in the pandemic have nevertheless to start out searching all over again.

Lydia Boussour, direct U.S. economist at Oxford Economics, said she thinks that customer paying out, which slowed to an once-a-year advancement charge of just 1.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in the July-September interval, is rebounding in the recent quarter.

“An increasing wellness condition, increasing mobility, increasing employment traits and solid household funds,” Boussour wrote, should really support gas a buyer paying out improve of all around 5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} this quarter.

The report Friday confirmed that the conserving charge dipped to 7.5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of following-tax revenue in September, a even now-superior level but down from 9.2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in August.

AP Economics Author Christopher Rugaber contributed to this report.

October 27, 2021

Visa’s Profits Jump as Credit, Debit Card Spending Recovers | Business News

By KEN SWEET, AP Small business Author

NEW YORK (AP) — Revenue at payments giant Visa Inc. jumped in its most-latest quarter, pushed by customers and companies receiving back again to investing on their credit and debit playing cards following the pandemic.

The San Francisco-primarily based company claimed Tuesday that it attained $3.58 billion in its fiscal fourth quarter that ended Sept. 30, or $1.65 a share. That’s was up from a revenue of $2.14 billion, or 97 cents for each share, in the same period of time a year earlier.

Excluding 1-time adjustments, Visa gained $1.62 a share, up 42{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} from a calendar year earlier. Analysts experienced been anticipated $1.55 a share, in accordance to FactSet.

Visa’s final results very last year were being hampered the pandemic-induced world slowdown in vacation and financial action, which slash the sum of revenue touring on Visa’s credit score and debit card networks. As economies throughout the world have reopened, there’s been a tick up in payment quantity as very well, which goes straight into Visa’s base line.

Political Cartoons

Shoppers and companies used $2.783 trillion on Visa’s network in the most up-to-date quarter, up 17{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} altered for currency fluctuations. Visa saw double-digit advancement on both Visa-branded credit cards, as well as debit cards.

Visa executives stated they noticed that the pandemic brought about a long term transform in shopper habits: Much more consumers grew to become cozy purchasing goods online or with their sensible telephones, which normally involves a credit score or debit card. This was observed in pieces of the financial system that have usually been cash weighty, like grocery shops, espresso stores and bars.

“The pandemic has additional digitized cash,” reported Al Kelly, Visa’s CEO and chairman, in a get in touch with with investors. “We are positioned even greater than the place we had been in advance of the pandemic.”

That finally will be fantastic for Visa’s base line. The firm earns a payment on each individual transaction that makes use of its payment network. The payment may differ depending on irrespective of whether it’s a debit card transaction or what variety of credit card is utilised.

Kelly also explained the expansion of cryptocurrencies will also be very good for Visa’s profits for the reason that cryptocurrency investors will have to have to shift income from a traditional financial institution account to a 3rd-bash support to purchase Bitcoin and other cash. While Visa’s bread and butter will usually be credit score and debit playing cards, Kelly explained, he sees its network as getting a “single link point” in between cryptocurrencies and standard resources of dollars.

Visa also described its comprehensive-12 months results. The firm earned $12.93 billion on an modified basis, up 16{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} from its prior fiscal year. Complete revenues previous calendar year were $24.11 billion.