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Yahoo
01-06-2025
- Business
- Yahoo
Think Lower Inflation Means Cheaper Prices? Think Again
If you've seen headlines celebrating lower inflation and assumed that meant your grocery bill or rent would magically shrink — sorry to burst your bubble. While lower inflation sounds like good news (and it is, sort of), it doesn't mean prices are going down. Andrew Lokenauth, money expert and owner of Fluent in Finance, has noticed this misconception all the time when talking to his clients about financial planning. 'The thing is, most people mix up 'disinflation' (slower price increases) with 'deflation' (actual price drops). And I get it — the terminology is confusing as hell. When headlines scream 'Inflation falling to 3%!' it sounds like prices must be dropping too.' Here's what's really going on. Find Out: Read Next: According to Dennis Shirshikov, professor of finance at City University of New York and head of growth and engineering at Growth Limit, the false idea that lower inflation means lower prices comes from a fundamental misunderstanding of what inflation actually measures. 'Inflation is the general price level, not the absolute prices.' This is what's happening: When the inflation rate decreases, all that is happening is that prices are still increasing, but at a slower rate. This can be misleading to a lot of people, Shirshikov explained, because most people would expect that less inflation means that prices would be going down rather than going up at a slower rate. See More: 'Picture the cost of a gallon of milk. Milk costs 5% more this year than it did last year when inflation [was] 5%. Even if inflation drops to 2%, the cost of milk would still go up, but at a much slower pace — only 2%, not 5%,' said Shirshikov. So basically, although that may be a welcome development in the sense that it will take pressure off household budgets, it's important to recognize that the prices are not actually falling, they are simply rising less rapidly. If you were relying on prices to act as a sort of after-inflation cut in the price of money itself, it's time to reset your expectations. The best thing is to concentrate on how to manage and control other parts of your budget and investment strategy. As the price of goods goes up in the coming months, you may want to see if there are opportunities to reduce expenses, diversify investments and lock in fixed prices for necessary services now to avoid paying more later. 'Let's face it, being proactive with your financial planning is important for managing inflation — even when it's not as aggressive as before,' Shirshikov said. More From GOBankingRates 10 Cars That Outlast the Average Vehicle Mark Cuban Says Trump's Executive Order To Lower Medication Costs Has a 'Real Shot' -- Here's Why This article originally appeared on Think Lower Inflation Means Cheaper Prices? Think Again
Yahoo
07-05-2025
- Business
- Yahoo
5 Bad Money Habits That Are Harder on Your Wallet Than Paying Bills
Paying bills feels like the most painful part of adulting — but believe it or not, some of your everyday money habits could be draining your wallet even more. Try This: I'm a Financial Advisor: 10 Most Awesome Things You Can Do for Your Finances For You: The New Retirement Problem Boomers Are Facing 'I have seen firsthand how certain financial habits can compound problems for individuals who feel trapped by high bills and mounting expenses,' said Dennis Shirshikov, professor of finance at City University of New York and head of growth and engineering at GrowthLimit. While managing bills is a necessity, he explained there are underlying money habits that tend to exacerbate financial struggles, often without folks realizing the long-term consequences. These habits, left unchecked, can erode wealth and prevent people from improving their overall financial standing, even when they are already overwhelmed by their 'needs' bills. From sneaky spending patterns to financial blind spots everyone falls into, here are a few habits that might be costing you more than your rent or electricity combined. Overlooking Small, Regular Expenses 'One of the most destructive behaviors that people develop is that of discounting the small, regular costs that seem as though they don't matter on a day-to-day basis,' Shirshikov said. Things like subscriptions, convenience services and regular, seemingly harmless purchases can add up unchallenged — you won't miss spending $10 or $20 on a daily basis, perhaps, but in the long run, those little bits add up to hundreds of dollars that could easily be saved or channeled into other, more lifestyle-defining, financial aims. Consider This: 9 Things the Middle Class Should Consider Downsizing To Save on Monthly Expenses Not Saving for Emergencies One of the most common mistakes, according to Kevin Shahnazari, founder and CEO of FinlyWealth, is being paycheck to paycheck and not saving or setting aside funds for unexpected events. In fact, one U.S. News survey found that two in five Americans (42%) don't have an emergency savings fund. 'When individuals are not saving even a fraction of their income for the future, they put themselves in a situation where they are constantly scrambling to cover unexpected expenses,' Shahnazari explained. This can result in a stack of high-interest debt, which only makes the problem worse in the long term. Relying Too Heavily on Credit for Daily Needs Many, particularly those with high costs, use credit cards as a way to balance income and expenses. That may provide breathing space, but tapping credit to pay for staples — in particular, not paying off the credit card in full every month — adds to the financial pressure.
Yahoo
01-05-2025
- Business
- Yahoo
This Is the Best $1,000 You Can Spend in Your 60s
Turning 60 doesn't mean slowing down. If anything, it means getting smarter about how you spend your money. Whether you're already retired or still grinding through your workdays, there's one way to spend $1,000 in your 60s that delivers way more value than a fancy gadget or a spur-of-the-moment trip. Read Next: Learn More: Here's how to make your future self (and maybe your wallet) a whole lot happier. The smartest $1,000 to spend in your 60s, according to Dennis Shirshikov, professor of finance at City University of New York and head of growth and engineering at Growth Limit, is what he referred to as a 'Retirement Clarity Package.' This combines three items into one: a long session with a fee-only financial advisor, a visit with a fiduciary estate planner and a budgeting retreat. 'I've witnessed this mix alter not only financial plans but lives,' he said. Check Out: Shirshikov observed that the majority of people in their 60s are either retired or engaged in retirement planning. But few have a truly coordinated strategy across investments, taxes, Social Security timing, insurance coverage and estate planning. He said paying a fee-only Certified Financial Planner (CFP) for a one-time session — perhaps $400 to $500 — can reveal thousands of dollars in future savings, from finding the best way to take tax withdrawals to delaying Social Security to maximize payouts. Rules change, and so do your assets, even if you already have a will, according to Shirshikov. One client he worked with hadn't reviewed their will in 14 years. They had married again and didn't know that their brokerage account beneficiaries hadn't updated to reflect this change in their wishes. He noted that one adjustment, casual and over coffee with an advisor, spared what might have been a giant family headache. Shirshikov recommended booking a weekend just for yourself (or with your spouse) at a local Airbnb or a quiet retreat to write what you really want in retirement. 'No technology; just a notebook and an agenda,' he said. Here are some questions to ask: Can I walk through a typical day in my life? What fears still linger? Shirshikov said clarity like this is the North Star when your advisor starts impacting your distributions, investments and even housing decisions. 'In this stage of life we think about money all too often in defensive terms — cutting expenses, eliminating risk, ensuring the future. But clarity is a provocation. So you stop reacting and you start designing,' he said. More From GOBankingRates 5 Luxury Cars That Will Have Massive Price Drops in Spring 2025 4 Things You Should Do if You Want To Retire Early 4 Affordable Car Brands You Won't Regret Buying in 2025 7 Tax Loopholes the Rich Use To Pay Less and Build More Wealth Source Dennis Shirshikov, Growth Limit This article originally appeared on This Is the Best $1,000 You Can Spend in Your 60s Sign in to access your portfolio
