Brower Financial Group Articles

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If you are under 35, see if you can save 15% of your salary toward retirement. If your company matches your retirement plan contributions, count the employer match as part of that 15%.

HIRING PICKED UP IN THE 3RD QUARTER

Employers added 156,000 net new jobs to their payrolls in September, the Department of Labor stated Friday. The August gain was revised up to 167,000, so monthly job growth averaged 192,000 in Q3, improved from 146,000 in Q2. The unemployment rate ticked up to 5.0% in September; the U-6 underemployment rate remained at 9.7%. Yearly wage growth reached 2.6%, with the average hourly wage rising six cents to $25.79.^1,2

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Some pension plans let retirees choose between smaller lifelong income payments or a large lump sum. If one or both spouses are in line to receive pensions, a couple should at least explore some of the possibilities for lump sum investment.

NO ADVANCE IN CONSUMER SPENDING

Personal spending was flat in August even as personal incomes rose 0.2%. These numbers from the Department of Commerce fell short of expectations: economists polled by MarketWatch had forecast a 0.2% gain in both categories. In other news linked to consumer spending, the federal government revised second-quarter GDP up to 1.4% in its third estimate; it had previously put Q2 growth at 1.1%.¹      

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By tracking a company’s typical month-to-month sales cycle, a business owner can identify when to put money into reserve to see a business through leaner months on the way to boom times.

FED WAITS TO RAISE INTEREST RATES

Federal Reserve officials decided against a rate hike last week, but two details in the central bank’s latest policy statement suggested an upward move was near. One, the Federal Open Market Committee voted 7-3 against raising the federal funds rate – an unusually close margin. Two, the Fed’s new dot-plot forecast showed consensus for a rate increase before the end of 2016. “Our decision [to wait] does not reflect a lack of confidence in the economy,” Fed chair Janet Yellen told the media after the announcement. “We’re generally pleased with how the U.S. economy is doing.”¹

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Just married? About to marry? Develop a plan to save jointly for your financial goals. If you both save for them, they may be attained more quickly.

RETAIL SALES DECREASE SLIGHTLY

Shoppers bought 0.3% less goods and services in August, according to the latest monthly report from the Department of Commerce – but minus auto sales, the decline was just 0.1%. Retail sales were still up 1.9% from year-ago levels, with online sales rising 10.9% in 12 months.

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Three actions can help you to build a good financial foundation prior to turning 40: funding retirement accounts, paying off credit card debt and creating an emergency fund.

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If you have recently divorced, be sure to review your will, your legal documents, and the beneficiary forms for your retirement accounts and insurance policies. All of them may need to be revised.

IS A 2016 INTEREST RATE HIKE STILL POSSIBLE?

According to the minutes from the Federal Reserve’s July monetary policy meeting, some Federal Open Market Committee members felt “that economic conditions would soon warrant taking another step in removing policy accommodation.” Others favored waiting longer to adjust rates, contending that the strong hiring seen in recent months would presently moderate. Fed officials broadly agreed that more economic data would be needed before any action.

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When a single parent is ill or injured and cannot work, a family can face a major financial crisis. Single parents should consider disability insurance in light of that risk.

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Small business owners need not buy on impulse. The longer an SBO can postpone a major purchase, the more time he or she gains to locate the best deal or the product or service best suited to the needs and goals of the company.

CONFIDENCE INDICES HOLD STEADY

Rising half a point from its previous reading, the University of Michigan’s consumer sentiment index finished July at 90.0. The Conference Board’s monthly household confidence gauge came in at 97.3 last week, near its (revised) June mark of 97.4.¹   

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Some parents spend thousands of dollars each year in support of their children’s athletic pursuits. Reducing such expenses could be wise; the money saved could go toward college tuition or retirement.

GAINS IN HOME BUYING & HOUSING STARTS

June brought a 1.1% rise in existing home sales. Analysts, polled by the Wall Street Journal, had forecast a 0.7% decline. In its new report, the National Association of Realtors said 33% of June sales involved first-time buyers, which was a 4-year peak. New Department of Commerce data showed housing starts up 4.8% last month.

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Young adults who consider debt consolidation should weigh the pros and cons of the idea. Lower monthly payments might free up more cash for saving and investing. Extending a credit card balance for decades, though, may cost a borrower much more in the long run.