"It is better to spend money like there's no tomorrow then to spend tonight like there's no money." - P.J. O'Rourke

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Bridging the gap between saving money and investing

Joe Wallace

Saving And Investing in 2021

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Saving and investing in 2021 is challenging. The state of the U.S. economy in 2021? It’s complicated. There’s a labor market shortage in some sectors, and meanwhile, there is an increased demand for labor. According to some sources, we’re going to see some fits and start going back to anything close to “normal”. Employment for many is a tricky issue, and having a dependable cash flow is the key to saving and investing in the best of times, let alone now.

American Economy Contradictions?

We live in complicated times. There is, by some reports, a contradiction between the demand for labor and some 500 thousand people who filed for unemployment benefits who filed in ONE WEEK. That said, jobless claims have hit a 13-month low according to Bloomberg Global Financial News.

Are you one of the people out of work, facing a work stoppage? Saving and investing is a completely different situation when your income is reduced or stopped altogether. What can one do?

Saving, Investing, And Job Loss

It’s a complete no-brainer. When your monthly budget is hit by a work stoppage, or already being damaged by one, will you stop putting money into your investments and savings accounts? This is a temporary smart move when mitigating the damage to your business-as-usual financial situation.

But what you should NOT do is to panic, raid your 401K or savings, and take such last-resort measures too early.

But what about those options? There is a hierarchy of things you can do before you begin tapping into the funds you have worked so hard to save. Some of these are very obvious, but they do add up. Others are not so obvious. Some of these cost-cutting measures you might never consider otherwise. Before raiding your savings account or 401k.

Take These Steps

  • Cut your subscriptions
  • Reduce your indulgences (restaurant delivery, Amazon purchases, etc.)
  • Change your insurance deductibles to reflect your pandemic driving habits
  • Call your credit card companies to ask for modified monthly payments
  • Call your home loan lender to explore your options for modified or suspended payments
  • Explore your loan refinance options, but make sure you don’t add more financial liability by doing so. Ask the lender about streamline refinance options that were available and how to get into a lower monthly payment
  • Consider a small personal loan if you are in dire straits. DO NOT apply for a payday loan, pink slip loan, or another non-collateralized lending. These loans cost far too much and will actually create a much bigger financial burden. Go to your usual lender. Ask about a personal loan to help you weather the pandemic.

Use your savings account as a last resort. The reason I give this advice? In my own personal experience, best results come from reserving the cash in your savings account. Reserved for unanticipated emergency expenses down the road.

My car will break down at just the wrong moment, or I will have an emergency dental procedure or other issue that requires some immediate cash. If you don’t take these random issues into account when planning your finances, you are already on the losing side of the equation.

 

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started. 

Check out these helpful tools to help you save more. For investing advice, visit The Motley Fool.

Is the Stock Market Closed on Good Friday?

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Is the Stock Market Closed on Good Friday?

Is the stock market closed on Good Friday? Stock markets close for a variety of reasons, and since international trading does not necessarily stop for one country’s holidays, it is important to know the dates when exchanges and markets halt trading in the United States. Good Friday is more internationally observed by western traders than some other holidays; the Easter season does not include federal holidays. Regardless, the stock market does close for Good Friday

Both NYSE and NASDAQ close in observance of the following federal holidays:

  • New Year’s Day
  • Martin Luther King Jr. Day
  • Washington’s Birthday
  • Good Friday
  • Memorial Day
  • Independence Day
  • Labor Day
  • Thanksgiving
  • Christmas Day

Is the Stock Market Open on Good Friday?

For our purposes, we’re referring here to the New York Stock Exchange or NYSE, and NASDAQ trading when we discuss “the stock market” as a unified entity.

American stock market traders observe many federal holidays, but not all. They also take some holidays that do not show up on the federal holiday calendar.

Bond markets may or may not follow the same schedule. In 2020 bond traders got Good Friday as a full day off, in 2021 they were only treated to a partial day’s trading schedule.

Is the New York Stock Exchange Open on Good Friday?

United States stock market trading is closed on Good Friday. There is no selling or trading on Friday, April 2nd, 2021.

Is NASDAQ Open on Good Friday?

Like the NYSE, NASDAQ is closed on Good Friday, April 2, 2021.

Will the Bond Market Be Open on Good Friday?

The bond markets operate on a partial-day schedule on Good Friday, closing at 2 P.M.

Stock Market Holiday Schedule 2021

Both the NYSE and NASDAQ use the same holiday schedule, both when it comes to complete and early closures. Here is a list of the remaining federal holidays for 2021:

  • Good Friday – Friday, April 2, 2021 – the stock market is closed
  • Memorial Day – Monday, May 31, 2021 – the stock market is closed
  • Independence Day – Sunday, July 4, 2021 – the stock market is closed
  • Independence Day (Observed) – Monday, July 5, 2021 – the stock market is closed
  • Labor Day – Monday, September 7, 2021 – the stock market is closed
  • Thanksgiving Day – Thursday, November 25, 2021 – the stock market is closed
  • Day After Thanksgiving – Friday, November 26, 2021 – the stock market closes early
  • Christmas Day (Observed) – Friday, December 24, 2021 – the stock market is closed
  • New Year’s Day (Observed) – Friday, December 31, 2021 – the stock market is closed

U.S Bond Market Holiday Schedule 2021

The Bond Market (SIFMA) holiday schedule impacts when the bond market is operating. Here is a look at the remaining holiday schedule for 2021:

  • Good Friday – Friday, April 2, 2021 – the bond market closes early
  • Memorial Day – Monday, May 31, 2021 – the bond market is closed
  • Friday before Independence Day – Friday, July 2, 2021 – the bond market closes early
  • Independence Day – Sunday, July 4, 2021 – the bond market is closed
  • Independence Day (Observed) – Monday, July 5, 2021 – the bond market is closed
  • Labor Day – Monday, September 7, 2021 – the bond market is closed
  • Columbus Day – Monday, October 11, 2021 – the bond market is closed
  • Veterans Day – Thursday, November 11, 2021 – the bond market is closed
  • Thanksgiving Day – Thursday, November 25, 2021 – the bond market is closed
  • Day After Thanksgiving – Friday, November 26, 2021 – the bond market closes early
  • Day Before Christmas Day Observed – Thursday, December 23, 2021 – the bond market closes early
  • Christmas Day (Observed) – Friday, December 24, 2021 – the bond market is closed
  • New Year’s Day (Observed) – Friday, December 31, 2021 – the bond market closes early

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Do you wish the stock market was open on Good Friday? Or do you think that the stock market closing for certain holidays is the right move? Share your thoughts in the comments below.

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If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started. Check out these helpful tools to help you save more. For investing advice, visit The Motley Fool.

 

Recession Worries? What To Do

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On January 28, 2021, the Washington Post ran a headline asking, Is The U.S. Still In A Recession? 

And in February 2021, FoxBusiness.com ran a headline stating, US Economy Poised To See Historic Gains In 2021 After Covid. Yet another headline, this one from March 2021 on Yahoo!Finance, stating, The 2021 Recession Will Be Long And Lingering.

That’s a lot of worry in those headlines. There’s just one problem with skimming headlines like these–context is EVERYTHING. For example, the “long and lingering” recession mentioned in the Yahoo!Finance headline above? If you felt a wee bit of panic after reading that, know that this particular headline refers to AUSTRALIA’s economy.

And that is one reason why I continually advise people who worry about their finances in the troubled economic times we’re experiencing in 2021 to take a deep breath, avoid panic, and examine the facts.

Diversify Your Savings And Investing Plans

And what are those facts? Those who want to save money and secure their financial futures know or will soon learn that diversity in their economic plans is key. If you do not have a diversified financial plan for your income and debts, one that does not rely on a single factor or a small number of steady factors to maintain the status quo, you are at a disadvantage with or without a recession. What does this mean? Let’s examine the panic-inducing word “recession” first.

The National Bureau of Economic Research defines “recession” as follows:

“A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.” In the context of this definition, a recession starts after a peak of activity and ends “as the economy reaches its trough.”

And what do people do when these economic conditions hit? They shift their priorities to being more frugal. Eating in restaurants drops in a recession, the interest in buying new vehicles and other high-dollar items diminishes…people simply start trying to hang on to their money. Why?

What It Means To Be In A Recession

According to the U.S. Bureau of Labor Statistics these measures are taken because consumer priority shifts in a recession to a conservation of cash. Scarcity of disposable income forces consumers to revise their indulgences, their long-term plans, etc. Manufacturers and consumer goods companies may hold off on investing in infrastructure and other areas as they wait out the recession and hope for rising sales in the future.

What should you do in anticipation of or in mitigation of a recession? The “don’t panic” advice is sound, as is all the other advice you have read on this blog about cutting corners, reducing indulgences in favor of long-term savings plans, etc. are all sound advice.

Don’t rush into brand new austerity plans for your personal finances–examine what you are doing RIGHT NOW and see how you can up your game from where you are currently at. It may make sense to revise your financial plans if you don’t really have them well thought out or organized, but if you are already following some saving advice, make sure you really need to alter that plan first–you may just need to add some tweaks.

Read More:

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

Check out these helpful tools to help you save more. For investing advice, visit The Motley Fool.

 

Learning Personal Finance From The Military

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personal finance lessons from the military

I had a lot of time to spend learning personal finance tricks from the military. I spent nearly 14 years serving in the U.S. Air Force, and while I was not a part of a military finance operation (military finance is a topic for another day) I did work as a reporter for Air Force News Agency and as such did a lot of writing about military money matters. Believe it or not, financial responsibility is a major part of a military career and as an officer or enlisted member you can get into a lot of trouble if you don’t handle your finances properly.

Personal Finance Lessons

What did I learn from those experiences? One big one for those (me) who hadn’t earned quite that much money in one place before was managing my current income while planning on future needs. The first time you’re forced to reconcile you spending today with the big car payment coming tomorrow, it can be a real eye-opener.

What I took away from this as a very young person was that I needed to look at my finances like a chess game instead of…well, maybe poker.

Another lesson I learned was how to think like a business person when trying to work out typical personal finance issues like an auto loan.

Interest And Other Expenses

The military has an option for those who are being assigned or reassigned to a new base in the U.S. or overseas; you are allowed to apply for an advance on your pay which is then paid back over a fixed period of time by a deduction from your military pay.

That sounds pretty straightforward, but once I started doing the math on this “advance pay” I realized that what I had been given access to was an interest-free loan with no fees to pay of any kind. Let’s say a month’s pay for a junior enlisted person is $3000.

That is NOT an accurate number, it’s an arbitrary one. But for the example, we’ll take a single month’s pay and divide it over 12 equal payments and add five percent interest. This $3K loan costs you over $200 in the interest fees alone, let alone the origination fee your lender will hit you with.

I wasn’t getting “free money” as much as I was given a “free loan”. And that woke me up to paying attention–a LOT more attention–to the costs of things.

Add It Up

How much does your GrubHub delivery order cost if you don’t use GrubHub but order in person instead? Those extra costs–the delivery fee, the driver’s tip, and processing fees–add up and if you look at a year’s worth of those fees and do the math, you begin to see what I was seeing way back then.

For me personally the moral of the story is to pay attention to the add-on costs of EVERYTHING. The same way I think people should feel a wee bit insulted when offered 10% off (because they are just basically waiving the sales tax instead of giving you a real discount) on something, I think people should feel insulted when they get socked with these hidden or extra fees they (likely) don’t see coming until after they have added up those costs over time.

 

Saving Money On Utility Bills

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Right now everybody wants to know about saving money on utility bills. The Texas winter weather debacle is a powerful reminder that it’s a very good idea to make sure your home is not robbing you of hard-earned money. The spikes in natural gas demand drove prices higher and people were suddenly forced to reckon with thousand-dollar-and-up utility bills.

When the power comes back on for these people, it’s entirely likely they’ll be wanting to learn how they can save money in the future with their utility bills, having been badly burned by things they didn’t see coming.

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Taking Stock Of The Home

After the initial shock of that dissipates, many homeowners and renters alike–myself included–want to double down on the efficiency of their homes to avoid losing money for preventable reasons.

My own version of this started by checking all my windows. Sure enough, mine were drafty. And it was below freezing outside when I checked, so you can imaging how that must have felt–realizing I’d been letting money literally blow away because of poorly sealed up windows.

Once I fixed that, I started looking at other things around the house; that drippy faucet suddenly had my full attention. The fact that my fridge needs to be turned up VERY high to keep my food cold means either I’ve got an overstuffed fridge (sometimes I do) OR a unit that needs to be maintained properly.

One area I was already thankfully squared away in? My thermostat. It’s one of the “smart” thermostats which have programmable timers and other functions designed to increase the energy efficiency of the home. This is an investment well worth making. If you have a “dumb” thermostat and own your own home, seriously consider one of these.

Saving Money On Utility Bills With Gadgets

One of the last things I did after fiddling with my already-fancy environmental controls (fancy for ME, this is one of the typical systems and not a “Cadillac of A/C and heating”) I immediately made the rounds of the house cleaning out the ductwork and grills, closing some and opening others to help maximize the airflow where it’s needed.

One thing I am glad I don’t have to change–most of my appliances are already those with Energy Star ratings. This is a good thing.

I don’t have any numbers to give you regarding how much all of this might save me–after all, this is a project I embarked on in the last week or two at the time of this writing. But the whole exercise left me feeling like my efficiency was on the rise and my money-wasting problems where the utilities are concerned are–with a bit of luck–fading in the background.

If you have never taken stock of your home in this way, don’t delay–you could be spending a lot more than you think unnecessarily.

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started. 

Check out these helpful tools to help you save more. For investing advice, visit The Motley Fool.

Saving Goals For 2021

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saving goals

My saving goals for 2021 are radically different than in years past for obvious reasons–the global pandemic is forcing a lot of us to rethink our long-term plans with respect to saving money, getting a nest egg or maintaining one, and anticipating future financial problems.

Furloughs, layoffs, job loss…those were words we used a lot in 2020 and in the new year even with the promise of Coronavirus vaccinations and much more, it is entirely possible that we have NOT seen the true economic fallout from the last 12 months by a long shot.

Saving Goals = Making Certain Assumptions

Why do I say this? Because when you are planning your saving goals for the year ahead, you want to be able to assume certain things. When times are good, your local businesses staying in business depend on sales, advertising, partnerships, and more to survive and grow.

But the open-again, closed-again nature of the western world’s pandemic response means that some are treading financial water instead of thriving and the true extent of the damage might not be apparent until a business attempts to fully reopen and get back to business without the benefit of the same kind of cash flow, predictability in business, etc. of a “normal” year prior.

Layoffs, Furloughs, And The Damage Done

And that means a lot of us are in danger of losing our jobs when that damage is fully assessed. It would be pure speculation on my part to try to come up with a percentage of local businesses that might have to close once the damages are fully tallied.

So my saving goals for 2021 are more like “income diversity goals”. What I’d like to do is to maintain my current level of saving but in anticipation of a year that might be tight moneywise.

Anyone who works in the gig economy makes a smart move to have diverse income streams but in the current climate it’s no longer an option, really…even for those who think it is. You can’t afford to rely on one source of your income in a lot of cases because you simply don’t know what the future holds for your employer and subsequently for you.

So what’s my advice? This might be a very good year to assume that no gig or job is 100% stable. And instead of saving less, that actually means trying to save a bit MORE in anticipation that you might need to dip into your savings or contingency fund.

But short of that, here is my BEST advice:

While you are still employed and have a source of income coming in, it might be wise to consider planning ahead for later in the year when money could get tighter. What does this mean? Stocking up, slowly over time, essentials you might need to have at the exact moment when you are required to cut back on your spending instead of maintaining your current levels.

This means different things for different people. In my case, it means taking a bit of a financial bite NOW in anticipation of a major expense I’ll definitely have LATER–a laptop purchase is in my immediate future at the time of this writing because my current gear is older than five years and it’s at the end-of-support stages in a lot of cases.

So I’ll be cutting back on my usual indulgences (I can make coffee at home, thanks!) in favor of eating a bigger-than-usual expense now just in case I literally cannot make the same purchase again in six months due to a loss of income.

What this means for YOU is up to you. But it’s a good idea to plan and think this way just in case. Much of the time when I do this, I wind up laughing at myself later because there was no big emergency after all. But there have been a couple of cases where my prep did pay off, and I was seriously glad I did it.

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