Latest news with #StephenKates
Yahoo
4 days ago
- Business
- Yahoo
Survey: More than two-thirds of Americans aren't reviewing their budgets. Here's why you should and how you can save more
Budgeting is the financial equivalent of eating your vegetables. It may seem unpleasant, even grueling, but it's ultimately good for your financial health. Budgeting is also unpopular. Bankrate's latest Money and Mental Health Survey shows that less than one-third (29 percent) of Americans reviewed their budget during a 30-day period between mid-February and mid-March. 'Few people like tracking their spending, and itemizing every dollar spent can be tedious and (time-consuming),' says Stephen Kates, CFP, financial analyst at Bankrate. When it comes to using a system to budget, Kates suggests that the simpler, the better. Here's why making a simple budget, and reviewing it, is worth your time. And here's how to develop one that will work for your financial needs. Bankrate's Money and Mental Health Survey found that Americans with higher levels of education were more likely to have reviewed their budgets. Nearly four in 10 post-graduates (38 percent) and people with a four-year college degree (38 percent) said they reviewed their budget in the 30 days prior to Bankrate's survey, which was conducted in mid-March. This percentage was lower for those with some college or a two-year degree (30 percent). Respondents who have, at best, a high school degree (23 percent), was the group that budgeted the least. Although budgeting is the act of tracking how much money you have, there's also the unpopular task of tracking your spending. According to Bankrate's survey, about one-third of survey respondents (34 percent) tracked their spending between mid-February and mid-March. Saving money doesn't just happen, says Lauren Zangardi Haynes, CFP, CIMA at Spark Financial Advisors. 'Most people do better managing their spending if they don't see a lot of money in their bank account. In other words, if your plan is to transfer what's left in your checking account at the end of the month to savings, you're setting yourself up for failure,' Zangardi Haynes says. Budgeting helps you determine precisely how much you should be saving each month so you can save more. Knowing what you're spending your money on, and how you're spending it, can help you determine how much you need to save to achieve your financial goals. The lesson here: Pay yourself first and pocket it in your savings account. Budgeting need not be a daunting task. It comes down to three things: Directing your direct deposits into different accounts Identify spending limits Being aware of your spending and savings habits Budgeting helps you plan where you want your money to go ahead of time. This helps you to spend your money intentionally, whether it's for helping you get closer to achieving your financial goals or putting your money towards purchasing future goods and services that you value. Zangardi Haynes says one of the underrated benefits of budgeting is the way it can help you shift the way you view yourself. She says frequently when people are focused on budgeting they focus on what they're doing wrong. 'When you build savings into your budget or spending plan, you can start to shift the way you think of yourself from a spender, or someone who doesn't manage money well, to someone who is responsible with money and capable of creating financial security for themselves,' Zangardi Haynes says. On the other hand, not budgeting is akin to getting in your car and just driving to a new place without directions, with the hope of getting to your destination in a new place. Bankrate insight Three great reasons to budget: It can show you where your money will be spent. It can help you change your spending habits. An efficient budget will help you pay yourself first so that you're saving before spending money. Budgeting is a financial activity more people should be doing, Kates says. 'Structure your income and spending in such a way where you understand where the money's going, which is essential, but you don't have to do every little dollar and cents transaction on what you bought for coffee this morning,' Kates says. Creating a simple budget takes just three steps: Determine your income. Make a list of your expenses. Don't forget those recurring monthly debits in your expenses. Set your goal to have cash remaining after subtracting your expenses from your income. This way, you know how much money can be saved and how much money should be applied to other financial goals. Once you determine your budget, consider automating your savings to help you save more – because, for many, it's easy to forget to save. Also, using a budgeting app can automatically aggregate your spending all in one place so you can see where your money is going when the expenses post to your credit card or bank account. Reviewing and following your budget is likely to increase your chances of achieving your financial goals. The unemployment rate in the U.S. held at a relatively low 4.2 percent in May, according to the Bureau of Labor Statistics. Those who are employed should have, or be adding to, an emergency fund that contains three to six months' worth of expenses. You need to start somewhere, so start by budgeting for a small amount from your paycheck to automatically go into a high-yield savings account and the rest into your checking account. This is called split-direct deposit – and it's a great way to start or add to an emergency fund, automatically. Sticking with this plan, and not withdrawing that money, will enable your emergency savings to grow. And in the current interest rate environment, it's easy to find a competitive online-only bank offering a yield that's outpacing inflation. Just make sure the bank is a Federal Deposit Insurance Corp. (FDIC) bank, so you know your money is protected in case of a bank failure, as long as your deposits are within FDIC limits and guidelines. But an emergency fund isn't only meant to replace income due to being unemployed. It also helps you when something you own inevitably breaks or needs to be repaired, such as an automobile or home appliance. Bankrate tip In addition to depositing your emergency savings in a high-yield savings account, consider a federally insured money market account, which combines the features of savings and checking accounts, offering competitive interest rates with greater flexibility than traditional savings accounts. You can't go back in time to your youth to build a big retirement nest egg, but that shouldn't discourage you from starting one now, even if you're a few years away from retirement. Every little bit helps. Budgeting can also help you to stretch your retirement savings, even if you're already retired. While younger people have time on their side for their money to grow, eligible workers ages 50 or older have some perks that their younger counterparts don't. One such perk is how much they can contribute to their retirement plans. This year, those ages 50 and older are able to contribute up to $31,000 to a 401(k), 403(b), 457 or a salary reduction simplified employee pension, or SARSEP, plan. (Eligible people under 50 are limited to $23,500.) And those between the ages of 60-63 are able to contribute an additional $11,250 to the $31,000 cap. Younger workers might have more competing priorities and financial goals, especially if they're earning less. At the very least, try to contribute up to your employer's retirement plan contribution match, especially if you're fortunate enough to work for an employer that does this. Splitting your direct deposit into different savings accounts can help you save for different goals, provided that your employer allows this. For instance, some people might want to have a high-yield savings account for an emergency fund and then another high-yield savings account to save for a new car. Bankrate tools When it comes to your savings goals, don't get stuck doing the math. Use Bankrate's Savings Goal Calculator to help you determine how much you need to help you get closer to achieving your money goals. Reviewing your budget is an important part of maintaining your financial health. Automating your savings and knowing where your money's going can help you get closer to achieving your financial goals. The alternative can prevent you from making improvements to your financial health. All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 2,363 U.S. adults, of whom 1,046 have money concerns that impact their mental health while 1,317 do not. Fieldwork was undertaken between March 19th-21st, 2025. The survey was carried out online and meets rigorous quality standards. It gathered a non-probability-based sample and employed demographic quotas and weights to better align the survey sample with the broader U.S. population.
6 days ago
- Business
Investing in crypto with IRA ‘has some benefits': Analyst
Stephen Kates, a financial analyst at Bankrate, discusses the launch of Fidelity Crypto, a service that lets customers invest in cryptocurrency via a self-directed IRA.
Yahoo
13-05-2025
- Business
- Yahoo
April's Core CPI Holds At 2.8% Despite Tariff Looming
U.S. Consumer Price Index rises 0.2% in April, beating the 0.3% consensus and reversing March's 0.1% decline. The firming reflects little immediate impact from early-April tariffs, as imports and spending surged in March ahead of levies. On a year-over-year basis, headline CPI climbed 2.3%, just below the 2.4% forecast and marking the smallest annual gain since February 2021. Core CPI, which strips out food and energy, also rose 0.2% month-over-monthbelow the 0.3% consensus but up from March's 0.1%keeping its 12-month increase steady at 2.8%. Shelter costs drove more than half of April's headline uptick with a 0.3% gain, while energy jumped 0.7% on higher natural gas and electricity even as gasoline retreated. In the core basket, household furnishings, medical care, motor insurance, education and personal care all rose, offsetting declines in airline fares, used vehicles, communications and apparel. Analysts warn that pre-tariff inventory runs may mask true inflationary pressures. As businesses deplete stockpiles, margins will squeeze or costs pass to consumers, says Bankrate's Stephen Kates, adding that this ambiguous report keeps policymakers in limbo. Fitch's Brian Coulton expects core goods inflation to revive once imported inventories wane, even as services remain stubborn. Why it matters: Mixed signals on tariffs and shelter costs leave the Fed in a bind over rate policy, fueling market uncertainty. Investors will focus on upcoming Fed minutes and wholesale price data for clearer cues on inflation's path. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
13-05-2025
- Business
Inflation eased after Trump's 'Liberation Day' tariffs, defying fears
Stephen Kates, a financial analyst at Bankrate, discusses the data from April's Consumer Price Index report.
CNBC
13-05-2025
- Business
- CNBC
'The calm before the storm': Prices drop slightly, but tariffs could push costs higher
Prices have eased amid a slowing economy, but that might not last as new tariffs take effect. Inflation rose 0.2% in April, for a year-over-year rate of 2.3%, which is slightly less than forecasted and coming in just below March's 2.4% pace, per Consumer Price Index data released Tuesday. The CPI tracks average monthly price changes for the goods and services Americans commonly buy. Core inflation, a measure that strips out volatile food and energy prices and is viewed as a better gauge of underlying inflation trends, remained at 2.8%. Both inflation rates are above the Federal Reserve's overall target of 2% — a sign that inflation is cooling but not fully under control. Even so, costs have seemingly leveled out as the economy shows signs of slowing. Airfare prices have dipped, gas prices are easing, and used car prices continue to fall, per April's CPI data. While slowing prices is a relief for consumers, the trend may not last. A new round of tariffs on most imports began raising costs for businesses in April. While some measures have been paused — including a Monday hold on additional tariffs for Chinese goods — many are now in effect, including a 10% baseline tariff on most countries. For now, the full impact on consumer prices appears to be delayed. Many companies stocked up on goods earlier this year in anticipation of tariffs, hoping to avoid price hikes and supply disruptions. That buildup is helping cushion near-term price increases, according to recent guidance by RBC. "Not all inventories will turn over immediately, so April is not capturing all of the price changes that may already be working their way through the system," says Stephen Kates, a financial analyst at Bankrate. "May and June data will be better reflections of the decisions businesses have made in light of both their higher costs and the most recently rolled out trade policies." Because of the lag in how tariffs affect prices, April's lower inflation reading is "the calm before the storm," says Christopher Naghibi, chief operating officer at First Foundation Bank. While many analysts expect inflation to rise in the months ahead, frequent changes in trade policy have added uncertainty to the forecasts. That said, businesses are expecting 3.9% inflation over the next year, according to a recent survey from the Cleveland Fed. Accelerating inflation would create new uncertainty for the Federal Reserve, which has kept interest rates elevated in an effort to curb price growth by discouraging borrowing and spending. But if prices rise again, rate cuts could be delayed. That means borrowing costs would stay higher for longer.
