If you spend more time watching the World Cup than reviewing your finances, you’re not alone. Millions here and around the world began watching the cup matches last month, with the final scheduled to take place on July 19. This was a welcome diversion from concerns about inflation, although the annual inflation rate slowed to 3.5% in June, down from 4.2% in May.
Home financing
Should your extra money go toward extra mortgage payments?
If you’ve achieved some long-term financial goals or received a pay raise, you may be revisiting your monthly budget and deciding what to do with the extra money. Here are some things to keep in mind.
If your current mortgage has a lower interest rate, you may want to consider investing your extra money instead of paying off your mortgage. For example, you could look at high-yield products such as certificates of deposit (CDs) or a high-yield savings account.
Here are some other tips to keep in mind.
Make sure to maintain your financial liquidity. It may be a better idea to transfer extra money into an emergency savings account. If you increase your monthly mortgage payments too much, you could end up with a temporary cash flow problem.
Pay off any higher-interest debts first. If you have balances on high-interest credit cards, student loans and/or car loans, it’s a good idea to take care of those first.
Last but not least: While mortgage interest can be tax deductible, your deduction may shrink along with your mortgage balance.
This article is provided for general informational and educational purposes only and does not constitute tax, legal or financial advice. The information provided regarding mortgage interest deductions is general in nature and may not apply to your specific financial situation. Tax laws are subject to change and can vary based on individual circumstances.
Source: Marcus.com
insurance
Car insurance: what it is, when you need it
If you’ve recently been shopping for a new car or truck, you’re aware of how much sticker prices have risen. That’s why you may want to consider adding gap insurance coverage to your mandatory auto insurance coverage.
Gap insurance covers the “gap” between the value of the car and what the driver would owe on the car loan or lease if the car is totaled or stolen. Without gap insurance, you could end up paying the remaining loan or lease balance, even if the car is written off or isn’t repossessed.
You may want to consider taking out gap insurance if:
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You made a small down payment on an expensive car;
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The car is rented,
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You purchased a car that is expected to depreciate quickly; or
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IIf you choose a longer term for your car loan. This makes it likely that you will have a negative balance for a while.
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If you are considering purchasing this insurance, keep in mind that you must be the original loan or lease holder, and the insured vehicle must be fairly new (no more than 2-3 years old).
Although the dealer may offer you gap insurance when you finalize your purchase, your insurance provider may offer coverage at a lower price. You may also want to ask your car loan provider about gap insurance. If you’re a renter, check the small print: These often include gap coverage or a default “gap liability” waiver.
This article is provided for general informational and educational purposes only. We are not a licensed insurance agent or broker; We do not sell, solicit or provide insurance advice. Before making any coverage decisions, consult a licensed insurance professional and review your insurance policy documents to determine what is appropriate for your individual situation.
Source: Wallethub.com
In the news
Start Pell Grants for the Workforce
Taking into account that the average cost of attending college has It rose more than 40% faster than the rate of inflationMany Americans believe that higher education is not worth the price. However, an alternative to college loans is now available.
The new policy, known as Workforce Pell, expands federal Pell Grants by helping low-income learners pay not just for associate or bachelor’s degrees, but for up to eight weeks of non-college job training. Students can apply for the Workforce Pell program and become eligible for positions in high-demand fields including nursing, welding, auto repair, and heating, ventilation, and air conditioning (HVAC).
The Workforce Pell is a welcome expansion of federal education grants, and the funds became available this month. However, many potential applicants are not aware of their existence. In addition, some states still determine which training programs meet eligibility requirements.
If you or a loved one would like to learn more about Workforce Pell, Click here to visit the ACT’s Workforce Pell webpage.
Source: hechingerreport.org
Credit and consumer finance
How this year’s World Cup affects the world’s pocket books
Every summer, there comes a moment when school supply lists appear and parents start doing the math in their heads. This year, math is harder than usual.
Families across the country are preparing to spend on notebooks, backpacks, clothing, and school supplies, and prices are rising. Surveys this year show a mixed picture, but the theme is the same everywhere you look: Shoppers are spending real money on back-to-school, and they feel it. One national survey found that 62 percent of shoppers are looking for sales this year, compared to 52 percent last year. Another found that a quarter of parents are cutting back-to-school spending specifically because day-to-day costs have become more expensive.
Meanwhile, broader figures on how people feel about their finances are also declining. Consumer confidence fell for the third straight month in July, and rising grocery and gas prices are one of the main reasons why.
Back to school shopping isn’t optional. Children need appropriate shoes and supplies for the classroom, whether or not the family budget is comfortable that month. This makes it a good proxy for something bigger: daily living costs have risen, and households are adjusting how, not whether, they spend.
You don’t need a survey to tell you this if you’ve stood in the school supply aisle recently. But it’s worth naming, because many people feel like they’re the only ones who are falling behind on their budget. They are not. Comparing prices, shopping sales, and rethinking what a need versus a want is are becoming the norm rather than the exception.
If back-to-school costs are stretching your budget this year, you’re in good company, and there’s nothing wrong with looking for ways to stretch your finances. This might mean shopping sales, spacing out purchases, or simply being more intentional about what you buy first versus what can wait.
A tight month here and there is normal. But if this starts to look like a pattern rather than a one-time stress, it’s helpful to step back and look at the bigger picture, not just this month’s budget. Sometimes this kind of stress is a sign that it’s worth checking whether your mortgage payments still fit into your life, or whether the equity you’ve built in your home can help cover a certain need without adding new, high-interest debt.
You don’t have to figure this out alone, and you don’t have to make any big decisions today. If in the tighter months you’ve been wondering whether your home loan still makes sense for your current situation, An APM Loan Advisor can help you consider your options. Every family’s situation is different, and we’re here to help you figure out what’s actually available to you, without the pressure or sales pitches.
Source: nerdwallet.com
Did you know?
The 1776 Economy of the Thirteen Colonies
When the Founding Fathers signed the Declaration of Independence, simple technology ruled. Agriculture was the economy, with an estimated 95% of workers (many enslaved) working long hours on farms and ranches. This means that the economy of the Thirteen Colonies may slide into recession due to bad weather.
Farmed and fishing goods such as tobacco, flour, rice, dried fish, whale oil, and indigo were the colonies’ largest exports. The color indigo was described as “blue gold”, and was used to dye military uniforms and royal robes. During the 1770s, it represented 25% of total colonial exports.
The elegantly dressed colonists imported expensive silk, wool, and brocade materials from Britain. They also imported sugar from the Caribbean. Firewood was the most popular energy source, accounting for 18% of the colonies’ GDP.
During this time, American colonists were technically the most prosperous people on earth, and had higher incomes than their English counterparts. According to historians’ estimates, the average American earned approximately 14 pounds a year, compared to 10 to 12 pounds for a Briton. In addition, colonial wealth was more evenly distributed, with more than 50% of white Americans being property owners while less than 5% of aristocratic English owned land.
Instead of flaunting their wealth by carrying a Hermès Birkin bag or driving a Rolls Royce, wealthy merchants and farmers went to a dinner party to display a single pineapple, which could cost about $8,000 in today’s dollars. (Those who can’t afford one often rent one.)
Sources: morningbrew.com
