Last week was a big one in the market. We had a new bull market declared, and we saw the Federal Reserve finally pause its year-plus campaign of hiking interest rates. Let’s deal with the Fed first:
No rate hike, but are more coming?
While it did not raise rates, the Fed did raise its terminal interest rate, which is its target for where it sees interest rates going, by 50 base points, or a half percent.
I love summer because we have all these opportunities for how we can allocate our newly found free time, but I find when I talk with clients that summer can also be a stressful season. There’s always the pressure to plan that big vacation that we can forget to budget for it and end up paying for that vacation for the next six months. In my case, I’ve got three kids doing camps and getting braces and moving into dorm rooms — there isn’t much money left for the “what Dave wants to do” fund!
The weather is warming, flowers are blooming, horses are racing, people are socializing — spring is in the air! The arrival of spring also means that it’s time to tidy up our homes, declutter, and spring clean. This season of rejuvenation presents an opportunity to extend our cleaning efforts beyond our home and into a different space: our finances. Just as we spring clean our homes, undergoing a spring financial checkup can bring a renewed sense of financial well-being.
I’m hearing from a lot of you who are concerned about the debt ceiling battle in Washington and what it might mean for you if the two sides can’t come together on a deal before the U.S. defaults on its bills.
In my view, the whole rodeo is being blown out of proportion by the media as it floods us with what-if scenarios. There is a history of presidents having to work with a hostile opposition party in Congress when up against the debt ceiling. The only solution is for both parties to agree to raise the debt ceiling and then focus on a truly balanced budget.
So much of gardening is the hard work and growth that takes place underneath the soil — feeding and nurturing our plants so they can build strong roots that will sustain them long after our work is done, allowing us to sit back and enjoy the fruits of our labor. Nobody ever comments on the roots, on the quality of the soil, or on the weeding we did that gave them room to grow. All they see is the beauty that lives above the dirt — the finished product.
We’ve been talking a lot around here about the rise of interest rates and its effect on everything from markets to loans, but an under-discussed aspect of rate hikes is the effect on your retirement.
Building, maintaining, and sticking to a budget can be a tough task for many of us with regular, full-time jobs. But it gets a lot more difficult if you don’t have a regular income, like those in sales-based jobs, seasonal workers, or folks who work in the gig economy. If you fall into one of these categories — as more and more young earners do — it’s especially important to budget wisely to have a plan for those months when the checks don’t come in quite as high as usual.
Sometimes the best-laid plans don’t work out as you expected. My mother always said, when things don’t go your way, consider the “why.”
I believe that the Federal Reserve would do well to consider that message. We’ve just gone through a banking crisis caused in part by the Fed aggressively raising interest rates, which resulted in the closure of one of the largest banks in the U.S. and the sharpest decline in commercial lending on record. In the meantime, wage inflation and housing costs remain stubbornly high, while unemployment is historically low.
As tax season approaches — the deadline is April 18, FYI — it’s important to start thinking about your tax plan. Whether you file on your own or use a tax professional, here are a few things to consider as you prepare for tax season.
Nobody’s benefits renew in March. March is pretty much the opposite of benefits season. Many of you are just waiting on the fall email from your employer that reminds you to check your benefits and see if something has changed — marital status, number of children, medical history — as well as instructions on how to make changes to your package. If nothing significant has occurred, you probably just check the box to keep everything the same. It’s easy.
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