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How Will The New Budget Deal Impact Your Finances?

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According to a new HarrisX poll, 27 percent of Americans believe the new budget deal won’t have any direct impact on their finances, which is likely true. Here is what other Americans think about the deal and how it may impact the economy.

What Americans Think About The New Budget Deal

HarrisX surveyed 1,000 registered voters between July 27 and July 28 to get Americans’ thoughts on the latest budget deal. The poll also found that 14 percent of Americans think the deal would actually improve their finances, while 16 percent believe it will worsen their current financial situation.

Not all Americans have made up their mind regarding the latest two-year budget though. Around 42 percent reported they need more information before deciding how it will impact them. Fifty-one percent of independents who participated in the poll said they’d need more information. Some Democrats (41 percent) and Republicans (34 percent) felt the same way.

There is a small divide when it comes to political parties as well. Republicans were more likely to think that the newest budget deal would help improve their financial situation (24 percent). Only 14 percent of Democrats and 5 percent of independents reported believing that to be true.

Around 22 percent of Democrats polled said they thought the new budget deal would likely hurt their finances (compared to 12 percent of Republicans and 14 percent of independents).

About The Latest Two-Year Budget

The new budget deal is shooting to increase federal spending and borrowing limit over the next two years. According to The Hill, this includes raising military and domestic spending by more than $320 billion. President Trump signed it into law on Friday, despite resistance in the Senate. In fact, more than 20 Republican senators voted against it.

Many people opposing the deal argue it isn’t focusing on decreasing federal spending as we should be.  Even though spending is typically a good thing for the economy, the latest budget changes would add about $2 trillion to the national debt over the next 10 years. The national debt has already increased by $2 trillion since Trump took office in 2017.

Final Thoughts

When it comes down to it, many of us won’t recognize any immediate (or large) impact on our finances. However, you may see increases in your taxes over time. Many people who are self-employed or those who are in a higher tax bracket may find they are paying more in than they have in past years.

But, when it boils down to it, many people won’t see a huge impact on our personal finances. The U.S. government, on the other hand, is continuing to increase the national debt. If this continues, our economy won’t be able to hang on for long.

Readers, what do you think about the new budget deal? How do you think it will impact your finances

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Psychological Association Warns Against Blaming Mental Illness For Mass Shootings

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The American Psychiatric Association (APA) issued a statement warning against blaming mental illness for all mass shootings. Following two major shootings this weekend, politicians, including the President of the United States, made statements about gun control and violence. Trump called the shooters “mentally ill monsters,” but the APA believes people with mental illness are being stigmatized.

Mass Shootings Doesn’t Equate Mental Illness

On Monday, Trump called for heavier mental health screenings. He stated that mental illness and hatred pull the trigger and even played with the idea of involuntary mental health treatment for some individuals.

“We must reform our mental health laws to better identify mentally disturbed individuals who may commit acts of violence,” he said, “and make sure those people, not only get treatment but when necessary, involuntary confinement.”

Many other members of the Republican party agreed with the president. Senator Chris Murphy, however, took to Twitter correcting POTUS.

The APA stated that “the overwhelming majority of people with mental illness are not violent and far more likely to be victims of violent crime than perpetrators of violence.” Anything saying otherwise, according to the association, can discourage people from getting the help they need. It can also embolden individuals with mental health issues to act violently.

Is There An Answer To Ending Gun Violence?

“The rates of mental illness are roughly the same around the world, yet other countries are not experiencing these traumatic events as often as we face them. One critical factor is access to, and the lethality of, the weapons that are being used in these crimes. Adding racism, intolerance and bigotry to the mix is a recipe for disaster,” Rosie Phillips David, president of the APA said.

So, while increasing mental health screenings for individuals purchasing guns may be a good idea, it won’t necessarily cut down on the number of mass shootings we see in a year. It is also unlikely to help cut down on other types of gun violence occurring in the country.

The only possible “fix” to the problem is reforming our laws surrounding firearms. All in all, further regulation is needed instead of placing blame where it simply does not belong.

Readers, what do you think about the APA’s warning against blaming mental illness for mass shootings? Is it accurate?

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What the New Lower Federal Interest Rate Means

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What the New Lower Federal Interest Rate Means

Interest rates are going down. The Federal Reserve has reduced its federal interest rate by 0.25%. The overnight lending rate is the basis for lending between banks and affects the rates offered to consumers for various loans. The last rate cut was almost twelve years ago after the real estate bubble burst in 2008. Conversely, rates have been raised nine times in nearly four years.

What is the Federal Reserve?

The Federal Reserve, or the Fed, was created in 1913 to stabilize the financial system in the United States. It’s also known as the central bank of the US and one of the most powerful financial institutions in the world. The Fed controls the monetary policy for the US. Its mandate, set by Congress, is “maximum sustainable employment, stable prices, and moderate long-term interest rates.” The Fed uses increasing and decreasing interest rates to combat the effects of inflation and stimulate the economy.

Reasons for the Decreased Federal Interest Rate

This latest reduction is said to mitigate global risk amid worsening relationships and trade concerns. The stock market and the current administration wanted a more significant decrease of 0.50%. The stock market reacted negatively to the news since lower rates present a weak economy. The S&P 500 decreased over 1%, to its lowest point in the last two months.

The Fed Chairman, Jerome Powell, alluded to the possibility of more cuts. However, there are no long-term cuts planned. The rate decrease was to prepare for future economic uncertainties. The administration is not particularly happy with the initial reduction and blames Mr. Powell’s policy decisions for slow economic growth. However, unemployment has been low for quite some time, and inflation has been steady. Conservative decreases as a preventative measure may contribute to more prolonged results.

What It Means When Interest Rates are Low

Federal interest rates affect how much it costs to borrow debt. Consumers are more likely to make big purchases when rates are lower. The hope is that lower rates will decrease spending on debt and increase consumer spending elsewhere. Lower rates also incentivize businesses to take out loans for expansion, equipment, and other enterprising efforts. Rates usually are reduced when the economy is in a recession, so this an unusual situation. The economy is strong, yet the Fed decreased the rate. The Fed previously reduced the rate to combat recession in 2003. The rate was 1.25% then. The current rate range is 2 to 2.25%

If you’re looking to finance a property, a car, or business expenses, now may be the time to strike. Also, now be a great time to refinance. If you took out a loan within the last four year, when the rates were increasing, the lower rates might be especially appealing. You may see a significant reduction in your monthly payments or total interest paid over the life of your loan. However, don’t feel pressured to accrue unnecessary debt because rates are low. The economy and markets are cyclical. Stick to your goals and financial plan.

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Why Intermittent Fasting May Not Be Great For Your Health

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Intermittent fasting

The weight loss industry makes billions of dollars a year from Americans attempting to lose a few pounds. Some individuals have combated this billion-dollar industry with trying things like intermittent fasting. Of course, you’ll spend less money on food when you simply don’t eat for a certain period of time, but at what cost?

What is Intermittent Fasting?

Intermittent fasting is something people do to increase their metabolism, lose weight, and possibly even reduce inflammation. To perform this type of fasting, you go without food for a set period of time every day. During this time, you can only drink water.

Many people fast for 16 hours and eat within an 8-hour window. So, if you start eating at 8 a.m., you’d only eat until 4 p.m. Then you’d fast again until 8 a.m. the next day.

Others use something called the 5:2 method. This means fives days out of the week you eat a normal number of calories. The other two days you have a restricted caloric intake (usually between 500 and 600 calories).

Dangers of Fasting

Billions of people worldwide fast for various reasons, including weight loss. However, many extreme diets or going without eating altogether can have some positive (and negative) impacts on your physical and mental health. More recently, the negative impacts of intermittent fasting have come to light.

Cons of Fasting

“Intermittent fasting is a gateway to an eating disorder,” Evelyn Tribole, registered dietitian and co-author of Intuitive Eating: A Revolutionary Program That Works stated. Oftentimes, when you get used to not eating, you just stop eating. Some individuals may fall into habits that lead to developing an eating disorder.

At the same time, those who don’t fall into anorexia may find themselves binge eating when they come off their fast. They may do really well for a few weeks, then when they stop their fasting period, they binge and gain the weight back, which can be just as harmful. Most importantly, you lose touch with your body’s ability to know when you need food and when you don’t.

On top of how intermittent fasting can change your relationship with food, it can also impact your social life. Many people who have done this type of fasting note that the social side effects were what almost broke them in the beginning. It is more difficult to go out with friends for a bite to eat when you don’t eat most of the day. Also, not all your friends and family will agree with you just not eating.

Pros of Fasting

That being said, there are plenty of benefits to intermittent fasting. Some individuals find that during periods of fasting they are able to think more clearly and feel happier. Additionally, most people who perform any type of fasting see some weight loss results, though they vary from person to person.

As with any extreme change in your lifestyle, be sure to consult with your physician before fasting or adopting any new diet.

Readers, have you tried intermittent fasting or any other kind of fasting? How did it impact you? 

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Was Amazon Prime Day a Success for Other Retailers?

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Amazon Prime Day may have been a success not only for Amazon but for may have helped rival retailers during it’s “Black Friday in July” event. Prime Day 2019 was a massive success for Amazon with site-wide incentives for members and increased buyer conversion. The rewards were two-fold for the company. First, there were new Prime subscriptions to be eligible for the exclusive deals, bringing in $59 or $119 per user. The first day of the event brought in the highest number of signups in one day. Second, there was, of course, the immense amount of shopping. In an Amazon press release, the company stated that sales exceeded “2018’s Cyber Monday and Black Friday sales combined.”

Prime Day Success Not Just for Amazon

Amazon’s share price is the stuff of legend. During the two-day event, it stayed over $2,000 per share. This time last year, it was still hovering around $1,800 per share. The price dropped later in the week when concerns came up regarding the high cost of the newly offered one-day shipping. Amazon wasn’t the only winner, though. Other retailers decided to join in on the fun and offer their deals on the same day.

Target

Target had “Deal Days” on the 15th and 16th of July as well, offering up to a 40% discount on items throughout the store. Target and other stores’ promotions were promoted as anti-Prime since there was no membership requirement. Target’s stock price dropped on Monday to about $86 but quickly rebounded the following day to over $88 per share. During the same period last year, Target saw an increase in its share price, but it was about $10 less than this year.

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eBay

Another retailer that saw a spike in searches during Prime Day was eBay. The online retailer promoted a “crash sale” to poke fun at Amazon’s site crash during Prime Day 2018. It saw a massive increase in sales this year during Prime Day. Some of the crash sales are still ongoing. eBay’s stock started to decline during the Prime Day event landing at around $39 per share on the 17th of July. It has since risen to over $41 this week.

Wal-Mart

Another competitor, Wal-Mart, had offered two-day with no membership, forcing Amazon to deliver even faster while minimizing costs to the customers. Wal-Mart’s share price also held steady during the shopping event at around $114 and held steady after that. During Prime Day last year, Wal-Mart’s stock price was about $30 less than it is now. Taking advantage of Prime Day seems to help the retail giant.

Future Prime Days

I think it is safe to say that Prime Day has created a new shopping holiday and an oft-overlooked season. Most big sales are near the winter holidays, but now retailers have another huge opportunity for significant sales before school starts. All of the retailers will win in any situation because people will shop early, late, or both.

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