The Finatical
Week of June 7th, 2021 - Saving Tips, Impact of Vaccinations, Job Market Changing
FinaticTips - 3 Personal Finance Tips
1 - Cut The Fat
Free trials can seem very inviting as they allow us to benefit from certain services without actually paying. What most of us don’t realize is that once the trial ends, money is automatically debited from our bank accounts. Before we know it, we have $14 leaving our wallets every month for a Netflix subscription that we aren’t even using. This is just one example. Companies have many ways to get us to spend more than we should. You must’ve noticed the absence of dollar signs on the menu when you went for dinner to an expensive restaurant and, if there were, you must have seen $4.99 instead of a rounded $5. Do you ever have trouble finding cheap products at the departmental store? This is because the most expensive and luxurious items are placed at the top of the aisle, at your eye level, while the cheap stuff is placed at the bottom. These are just tactics to make us think that we aren’t spending much and usually end up buying more than we need and our saving budget goes out the window. Be aware of these tactics and make sure not to be manipulated by them. We have numerous expenses on our plate that we don’t even know about and so it is really important to re-check all bills and see if we really need to have certain expenses or not. If not, call up the company and cancel the service right away! In short, cut the fat from your bills. This will enable you to save more and spend less on unwanted expenses.
2 - Smart Small, Think Big
A recent study says that 21 days are enough to form a habit and that is exactly what you can do to start saving but you should know where to start. Instead of saving $500 every month, start with a short-term goal. For instance, save $20 every week or every month and as you strike these goals off your list, move on to bigger goals. Treat yourself as you accomplish each goal -- self care is very important- but don’t stop these saving habits. Step out of your comfort zone as you form habits and then start saving more than you used to! As you continue saving more and more, you’ll soon see big gains!
3 - 50/30/20 Budgeting Rule
Budgeting is a really important tactic for saving properly. There are many budgeting tips but one that we advise is the 50/30/20 rule. This rule states that you need to spend 50% of your after-tax income on essential payments such as fees, rent, electricity etc. 30% of your income should be spent on non-essential wants, such as movies, trips, and the last 20% should be allocated to savings. What will start with small budgeting will result in emergency funds and retirement plans that will take away your worries in the long run. This rule will become a key factor in advancing your financial plans and will offer long term benefits!
FinaticTrends - 2 Financial Trends
1 - Vaccinations Boost Consumer Spending
As the vaccinations are rolling out all across the world, everything is expected to return to normalcy soon. In some places, it is likely to return sooner. Economists had already predicted that as more and more people get jabbed, consumer service-spending will rise but what they didn’t expect was that it will rise more in US states with significantly lower vaccination rates. There has been a 20% rise in spending on entertainment venues and restaurants by people who have not been or do not intend on getting vaccinated. One possible reason for this is that people are less likely to get vaccinated in states that have reopened and have removed mask mandates. People are becoming less fearful of the pandemic and consumer spending is likely to increase as people start moving out again. We do suggest continuing saving at times like these to ensure future security.
2 - Job Market Tightening
Currently, the job market in the US is quite tight. An elevated unemployment rate has been evident since the pandemic but this is not strictly because of unavailability of jobs. Approximately, 44% of US-based businesses have job openings that they are unable to fill. This is very intriguing as at times like these this is very unexpected. On closer inspection, there might be several different reasons for this tight job market. Many people choose not to work due to Covid concerns and this trend is being recorded especially among older workers. The participation rate of those above 65 is declining. More 65+ workers are leaving as compared to the young entrants of the American workforce. Financially stable households do not feel the need to work in these trying times due to their boosted savings in the past year and this might be another reason why jobs are not filling up. If it is so, it clearly shows how savings can help us in times of need. It will be interesting to see how long this trend lasts as the increased vaccinations are likely to normalise the situation soon and even if that doesn’t happen, sooner or later, people will have to return to their jobs.
Financial Guidance
“You must gain control over your money or the lack of it will forever control you.” –Dave Ramsey
Money Fact
As of December 2020, there are 46.8 million millionaires around the world!
Just maybe, one day, you will join them!
Nice!