To view this email as a web page, click here. Kristin Myers, Editor-in-Chief What's Happening Today Buckle up, because this week could bring some bumps and turbulence. The Federal Reserve is set to kick off yet another policy meeting tomorrow and will make an announcement about further interest rate hikes on Wednesday. While it's largely expected the Fed will continue to hike rates, how aggressive the central bank will be remains a mystery. Right now, markets are pricing in a nearly 90% chance that we will get another jumbo rate hike of 75 basis points.     The Fed continues to aggressively hike rates to bring down inflation, which is stubbornly sitting at an annual rate of 8.2%—far from the central bank's target of a 2% inflation rate. The more aggressive rate hikes are, the more economic pain we might all feel going forward. That could mean more job losses, more volatility in the markets, and more expensive loans from your bank, whether it's for a house, a car, or your credit card debt.    All of that brings a greater likelihood of that dreaded R word: recession.   Stocks are falling today ahead of the Fed's next moves. Markets had largely mounted a comeback this month on higher-than-expected growth in consumer spending and mixed earnings reports. While some companies reported strong growth, Meta and other tech heavyweights signaled that growth was slowing amid headwinds including the Fed's rate hikes.    But that's not all we will be watching: In a double whammy to your portfolio and to your job prospects, the Labor Department will also release the latest jobs report at the end of the week, which could show if unemployment is rising. The job market has been very strong so far. There are still more jobs than there are workers, wages keep rising, and the unemployment rate is still relatively low. On Friday we will see if the Fed's rate hikes have taken a bigger toll, which could signal that a recession is approaching.   - Kristin Editors' Picks How the Fed's Rate Hikes Slow the Economy — and Impact You (The Washington Post) Higher Interest Rates Fuel Losses at the Federal Reserve - WSJ (The Wall Street Journal) Consumers are Shopping Till Their Savings Drop (The Balance) 1 in 3 Voters Say Fixing the U.S. Economy Should Be Top Priority—Here Are 3 of the Money Issues They Care About Most (CNBC) Comparing Health Savings and Medical Savings Accounts (The Balance) 10 Things to Know About a Health Savings Account (The Balance) Can My Boyfriend and I Be Equal Financial Partners? (The Balance) Term of the Day Health Savings Account (HSA) A health savings account is a special savings account that is meant to be used for health care expenses. These accounts can be offered with high-deductible health plans and are funded with pretax dollars. That means the money can come out of your paycheck before taxes are taken out of your pay, and you can stash it away until you need it for a medical expense. Some employers offer matching contributions for HSA plans. Best of all, the money can be invested and grow tax-free, and then you can withdraw the money tax-free for qualified medical expenses. The Internal Revenue Service (IRS) determines which expenses qualify. Many over-the-counter medicines are covered, too. And the money in your HSA rolls over every year, even if you change employers. Off the Charts As the Fed hikes the federal funds rate to curb inflation, the average annual percentage rate (APR) also rises, making credit card debt more expensive. The higher the interest rate and the longer it takes you to pay off a balance, the more you could pay in interest.   For instance, a balance of $5,221 at the current average credit card APR of 21.96% wouldn't be paid off for more than 16 years, during which you'd pay a total of $13,283.18 to the credit card company—$8,062.18 of it in interest. That calculation assumes you'd paid just the minimum due during that time (1% of the balance plus interest and a $35 minimum payment) and that you didn't add any more debt to the account. How can we improve The Balance Today newsletter? Tell us at newsletters@thebalance.com Email sent to: kholish2011.jobsearch@blogger.com You are receiving this newsletter because you subscribed to The Balance Today newsletter. If you wish to unsubscribe, please click here. Dotdash Meredith 225 Liberty Street, New York, NY 10281 © 2022 All Rights Reserved. Privacy Policy | Terms of Service

» Read More...

To view this email as a web page, click here. Kristin Myers, Editor-in-Chief ICYMI: Record Low of 4.5% Americans Don't Have a Bank Account In case you missed it, the share of unbanked Americans dropped to 4.5% last year, the lowest figure since the government started keeping track in 2009. While the current number is still a steep drop from its peak of 8.2% in 2011, this still means that nearly 6 million households do not have a bank account at all.   For those households, the lack of bank accounts means they can be particularly vulnerable to predatory and expensive alternatives like payday loans or check cashing services.   According to the FDIC, the most common reason for people remaining unbanked was not having enough money to maintain minimum balances required by many banks. Large gaps remain between different races as well, with only 2.1% of White households remaining unbanked last year, compared to 11.3% of Black households and 9.3% of Hispanic households.    - Kristin Editors' Picks How the Underbanked Handle Finances in the US (The Balance) How To Live With No Bank Account (The Balance) How To Bank With No Minimum Balance Fees (The Balance) Can You Have Medicaid and Private Insurance? (The Balance)  What Happens to a Bank Account When Someone Dies? (The Balance) How To Invest During a Recession (The Balance) 7 Reasons To Save Your Money (The Balance) Term of the Day Money Order A money order is an alternative to cash or checks. Like a check, a money order is designed to be sent to a specific person, and cannot be cashed or deposited by anyone else. Unlike a check, a money order is paid for in advance, so it's guaranteed. You can use a money order to purchase items, pay bills, or just send money to someone—locally or internationally.   You might prefer to use a money order if you don't have a bank account but want a safer alternative to cash, you want to send money internationally, or you don't want your payment connected to your bank account or credit card.   If you're the one sending the money order, you'll typically need to buy it in a physical location and then deliver it in person or send it in the mail. If you're receiving the money order, you can cash or deposit it in person at most banks, or deposit it online at some banks.   You don't have to go to a bank or credit union to find a money order. There are a number of places you can buy one, including all U.S. post office locations, convenience stores and supermarkets, and check cashing, money transfer, and payday loan stores.  Off the Charts As home prices start to fall from their recent peak, many experts think it will make things much easier for buyers. However, a major downturn isn't guaranteed—and even if it happens, don't expect a return to pre-pandemic prices. Economists at real estate website Zillow don't think a crash will happen because there are so few homes on the market that prices are likely to stay high despite so many buyers dropping out due to spiking interest rates.  How can we improve The Balance Today newsletter? Tell us at newsletters@thebalance.com Email sent to: kholish2011.jobsearch@blogger.com You are receiving this newsletter because you subscribed to The Balance Today newsletter. If you wish to unsubscribe, please click here. Dotdash Meredith 225 Liberty Street, New York, NY 10281 © 2022 All Rights Reserved. Privacy Policy | Terms of Service

» Read More...

To view this email as a web page, click here. Kristin Myers, Editor-in-Chief What's Happening Today The Federal Reserve's preferred inflation gauge, the core index of personal consumption expenditures (PCE) rose 0.5% in September as prices continued to rise. The index was up 5.1% from a year ago, accelerating from an annual rate of 4.9% in August. The core index excludes food and gasoline prices, which can be volatile. Overall, the broader PCE Price Index that includes food and gasoline prices climbed 0.3% last month and was up 6.2% from a year ago, at the same rate as the previous month.    When Fed policymakers look at inflation, they consider PCE since it is more representative of inflation consumers face than the Consumer Price Index (CPI). But why? You might not realize this, but CPI calculates inflation for only urban consumers, so it isn't as representative of all shoppers in the country.    PCE also includes more items in the index and bases its figures on the goods and services that consumers are buying each month, using data from the stores and businesses where they buy them. In addition, PCE will account for "substitutions" that shoppers like you and I make at the store. In other words, if we buy item X instead of item Y because Y is too expensive, PCE will reflect those differences. The CPI will not. In the end, the PCE Price Index tends to be less volatile than the figures you'll see from the CPI.   But consumers are staying resilient, and continue to buy goods and services, even with prices rising. Personal income jumped 0.4% in September, driven by higher wages as employers continue to spend more to find workers. Personal savings, while on the decline as inflation takes a toll, stood at 3.1% of disposable income.    Even with PCE lower than September's CPI reading of 8.2%, inflation is still persistently higher than the Fed would like as prices continue to rise. So next month when policymakers from the central bank meet, expect even more rate hikes. Right now, the market overwhelmingly believes it will be another big one, of 75 basis points. If you want a loan, it will only get more expensive as rates go higher. And if you are an investor, your portfolio (especially tech stocks) could be negatively impacted.   - Kristin Editors' Picks Fed Seen Aggressively Hiking to 5%, Triggering Global Recession (Bloomberg) Here's What the Next Recession Could Bring (The Balance) Pending Home Sales fell 10% in September, Much Worse Than Expected (CNBC) Tech Boom Ends as Companies From Amazon to Meta Adjust to Turbulent Times (The Wall Street Journal) What To Do If Your Parents Didn't Save for Retirement (The Balance) Tax Inflation Adjustments for 2023 (The Balance) Is Life Insurance Worth It? (The Balance) Term of the Day Cash Management Account A cash management account (CMA) is a cash account that combines features similar to checking, investment, and savings accounts. It's held through financial institutions other than banks and credit unions, such as brokerage firms. The institutions might use partnered banks to store the funds. You can use one or more cash management accounts in place of, or in addition to, a checking account.   CMAs combine both short-term investing and day-to-day banking. They allow you to access your money, pay bills, manage your savings, and earn interest. These accounts are typically separate from a brokerage firm's investment accounts, but the accounts can be linked together. Off the Charts Spending rose faster than income in September as pressure on household budgets intensified, according to the latest report on personal income and expenditures from the Commerce Department. As economists at Wells Fargo put it: "In September, consumers continued doing what they have been doing for much of 2022: spending much more than they are making." How can we improve The Balance Today newsletter? Tell us at newsletters@thebalance.com Email sent to: kholish2011.jobsearch@blogger.com You are receiving this newsletter because you subscribed to The Balance Today newsletter. If you wish to unsubscribe, please click here. Dotdash Meredith 225 Liberty Street, New York, NY 10281 © 2022 All Rights Reserved. Privacy Policy | Terms of Service

» Read More...