Finance
Five money moves to make this spring
In a wide-ranging interview on ‘Cavuto: Coast to Coast,’ The Corcoran Group founder and ‘Shark Tank’ star Barbara Corcoran addresses market trends and challenges in real estate.
Most of us are familiar with the concept of “spring cleaning” when it comes to your home, but the spring season is also an ideal time to make some important decisions regarding your finances.
As you’re tackling your home improvement spring to-do list, add one more important task: cleaning up your finances.
“It can be challenging to reach your goals and feel in control of your financial future,” Jesse Abercrombie, financial adviser and general partner at Edward Jones, told FOX Business. “But by reviewing your situation every year and making the appropriate moves, much like a spring-cleaning routine, can help you keep moving in the right direction.”
A woman sits at home working on her laptop computer. (iStock / iStock)
Money moves that can start your spring off right
De-clutter your finances
Eliminating clutter can result in a positive feeling – and more livable space. This philosophy can be carried over to your money management.
“As an investor, you can also find clutter in the form of redundant investments,” said Abercrombie.
For example, he said to ponder whether you own several nearly identical mutual funds.
SIX MOVES YOU’RE MAKING THAT CAN RUIN YOUR CREDIT SCORE
“You might want to consider selling some of these funds and using the proceeds to find new investments that can help you further diversify your portfolio,” Abercrombie said.
To that point, he noted that diversification is a key in working toward investment success, but keep in mind that it doesn’t ensure a profit or protect against losses in a declining market.
Plant seeds of opportunity
Commonly, spring is a time when individuals plant trees, flowers and other greenery. This mindset can also be utilized as you plan your spring money goals.
“When you invest you need to plant seeds of opportunity in the form of investments that you hope will grow enough to enable you to make progress toward your goals,” said Abercrombie.
COST OF LIVING HINDERS YOUNGER GENERATIONS FROM SAVING FOR RETIREMENT: FIDELITY
He suggested that spring is a smart time to review your portfolio to ensure it’s providing this growth potential, given your individual risk tolerance.
Do a clean sweep to reduce risk
Have a goal to devote some spring-cleaning time to reducing potential hazards, and also devote your time to considering the possible threats to your financial security.
“For starters, review your life insurance to determine if you have enough,” said Abercrombie.
Your employer may offer some coverage as an employee benefit, but is it sufficient? Do you need to consider private coverage?
Commonly, spring is a time when individuals plant trees, flowers and other greenery. This mindset can also be utilized as you plan your spring money goals. (iStock / iStock)
“The same is true for disability insurance, because if something were to happen to you, and you couldn’t work for a while, you’d still want to protect your family’s lifestyle,” said Abercrombie.
Boost your “rainy day” fund
“Save for a rainy day” is an old piece of advice – and a timeless mantra.
According to Abercrombie, if you’re not prepared by having an emergency fund readily available to pay for an unexpected expense such as a temporary loss of employment, a major home or car repair or a large medical bill, you might be forced to dip into your IRA, 401(k) or other retirement accounts. This could cause you to incur taxes and possible penalties as well as lower the amount of money you’d have available for retirement.
BlackRock Chairman and CEO Larry Fink discusses saving money for retirement on ‘The Claman Countdown.’
“That’s why it’s a good idea to build an emergency fund containing up to six months’ worth of total expenses, with the money kept in a liquid, low-risk account that’s separate from the accounts you use for your daily spending needs,” he recommended.
Seize the spring season to review bills and credit card accounts with a critical eye
Take an inventory of what you’re paying each month regarding recurring charges. Are you using all the services that you’re paying regularly for? Are there better alternatives?
GET FOX BUSINESS ON THE GO BY CLICKING HERE
“Maybe you can cancel one or more streaming services, eliminate the landline or cancel the health club membership,” said Brad Stroh, co-founder and co-CEO of Achieve. “Then, redirect the funds you save to pay off debt, or to up retirement savings.”
How can small actionable steps create a good financial footing this spring?
Stroh said whether it’s trying to get out of debt or develop strong financial health, it’s important to make a plan.
“Saying you want to get out of debt, similar to saying you want to lose weight, is great, but the best intentions don’t constitute action plans,” he said. “You need to do your research and figure out a realistic plan that you can commit to.”
WASHINGTON – The Federal Reserve on Wednesday lowered its key interest rate by a quarter percentage point, the third consecutive reduction and one that came with a cautionary tone about additional reductions in coming years.
In a move widely anticipated by markets, the Federal Open Market Committee cut its overnight borrowing rate to a target range of 4.25%-4.5%, back to the level where it was in December 2022 when rates were on the move higher.
Though there was little intrigue over the decision itself, the main question had been over what the Fed would signal about its future intentions as inflation holds steadily above target and economic growth is fairly solid, conditions that don’t normally coincide with policy easing.
In delivering the 25 basis point cut, the Fed indicated that it probably would only lower twice more in 2025, according to the closely watched “dot plot” matrix of individual members’ future rate expectations. The two cuts indicated slice in half the committee’s intentions when the plot was last updated in September.
Assuming quarter-point increments, officials indicated two more cuts in 2026 and another in 2027. Over the longer term, the committee sees the “neutral” funds rate at 3%, 0.1 percentage point higher than the September update as the level has drifted gradually higher this year.
“With today’s action, we have lowered our policy rate by a full percentage point from its peak, and our policy stance is now significantly less restrictive,” Chair Jerome Powell said at his post-meeting news conference. “We can therefore be more cautious as we consider further adjustments to our policy rate.”
“Today was a closer call but we decided it was the right call,” he added.
Stocks sold off following the Fed announcement while Treasury yields jumped. Futures pricing pared back the outlook for cuts in 2025 to one quarter point reduction, according to the CME Group’s FedWatch measure.
“We moved pretty quickly to get to here, and I think going forward obviously we’re moving slower,” Powell said.
For the second consecutive meeting, one FOMC member dissented: Cleveland Fed President Beth Hammack wanted the Fed to maintain the previous rate. Governor Michelle Bowman voted no in November, the first time a governor voted against a rate decision since 2005.
The fed funds rate sets what banks charge each other for overnight lending but also influences a variety of consumer debt such as auto loans, credit cards and mortgages.
The post-meeting statement changed little except for a tweak regarding the “extent and timing” of further rate changes, a slight language change from the November meeting.
Change in economic outlook
The cut came even though the committee jacked up its projection for full-year gross domestic product growth to 2.5%, half a percentage point higher than September. However, in the ensuing years the officials expect GDP to slow down to its long-term projection of 1.8%.
Other changes to the Summary of Economic Projections saw the committee lower its expected unemployment rate this year to 4.2% while headline and core inflation according to the Fed’s preferred gauge also were pushed higher to respective estimates of 2.4% and 2.8%, slightly higher than the September estimate and above the Fed’s 2% goal.
The committee’s decision comes with inflation not only holding above the central bank’s target but also while the economy is projected by the Atlanta Fed to grow at a 3.2% rate in the fourth quarter and the unemployment rate has hovered around 4%.
Though those conditions would be most consistent with the Fed hiking or holding rates in place, officials are wary of keeping rates too high and risking an unnecessary slowdown in the economy. Despite macro data to the contrary, a Fed report earlier this month noted that economic growth had only risen “slightly” in recent weeks, with signs of inflation waning and hiring slowing.
Moreover, the Fed will have to deal with the impact of fiscal policy under President-elect Donald Trump, who has indicated plans for tariffs, tax cuts and mass deportations that all could be inflationary and complicate the central bank’s job.
“We need to take our time, not rush and make a very careful assessment, but only when we’ve actually seen what the policies are and how they’ve been implemented,” Powell said of the Trump plans. “We’re just not at that stage.”
Normalizing policy
Powell has indicated that the rate cuts are an effort to recalibrate policy as it does not need to be as restrictive under the current conditions.
“We think the economy is in really good place. We think policy is in a really good place,” he said Wednesday.
With Wednesday’s move, the Fed will have cut benchmark rates by a full percentage point since September, a month during which it took the unusual step of lowering by a half point. The Fed generally likes to move up or down in smaller quarter-point increments as its weighs the impact of its actions.
Despite the aggressive moves lower, markets have taken the opposite tack.
Mortgage rates and Treasury yields both have risen sharply during the period, possibly indicating that markets do not believe the Fed will be able to cut much more. The policy-sensitive 2-year Treasury yield jumped to 4.3%, putting it above the range of the Fed’s rate.
In related action, the Fed adjusted the rate it pays on its overnight repo facility to the bottom end of the fed funds rate. The so-called ON RPP rate is used as a floor for the funds rate, which had been drifting toward the lower end of the target range.
Here’s what’s different in the December 2024 statement
Major AI players back Basis with $34 million series A
Paying down debt is a top financial goal for 2025. These tips can help
New 2023 K-1 instructions stir the CAMT pot for partnerships and corporations
Are American progressives making themselves sad?
U.S. Beneficial Ownership Information Registry Now Accepting Reports
-
Finance1 week agoStocks making the biggest moves after hours: ORCL, AI, MTN, PL
-
Accounting1 week agoReplacing mortgage deduction may boost homeownership
-
Personal Finance1 week agoThe Fed cut interest rates but some credit card APRs haven’t gone down
-
Accounting1 week agoIt’s time to get your WISP in order
-
Accounting1 week agoPCAOB staff report outlines 2025 inspection priorities
-
Accounting1 week agoBig changes expected at SEC under new chair Paul Atkins
-
Accounting1 week agoCanada pressured to respond to Trump’s tax cut regime
-
Leaders1 week agoRishi Sunak, The politic and the Successful Businessman