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18 to 34-year-olds make up the millennial generation. This group, as per Credible, says that "credit card debt (is) the biggest fear in their lives, even scarier than the threat of war, or even death." So why are they willing to dive into possible debt just to please their friends and family with gifts this holiday season? Was everyone all that nice?


According to Credible's recent holiday shopping survey of 500 millennials, "More than 70% of millennials plan to spend the same amount or more than they did last year on holiday shopping." And close to half of these 18-34-year-old have no clear shopping budget to follow. Although most surveyed plan to pay off their credit card bills right away, we all know that planning and what really happens are not always one in the same. Other expenses pop up and the interest grows on their credit card bills. Did old Aunt Edna really need that new crock pot?

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While the survey shows that 52.2% of these millennials plan to pay for holiday shopping with debit cards or cash and 20% plan to hit the registers with credit cards that they say they will pay off immediately, a good 16.2% say they also plan to use their AmEx or Visa and pay things off "over time." But when there is no budget to speak of and lots of holiday-fueled temptation in stores and online, all said planning can go out the festively-decorated window. And that is when the doom of debt can set in. Santa may bring the toys, but he is not known for paying off the mountains of bills of impulse-purchasing 27-year-olds.

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Credible suggests that millennials, or any shopper, for that matter, keep their holiday spending on track with these useful tips.

  • Set a spending limit
  • Carry cash
  • Take advantage of holiday sales
  • Prioritize paying off credit card debt

Using this sage financial advice can help shoppers mind their money so they stick to a plan and do not overspend… no matter how nifty a glittery display case may look. And no, you don't need another "ugly" Christmas sweater for this year's office party.

Are you in this 18-34 age bracket? Do you see yourself spending lots of money this season or will you reel it in and try to spend less? It is the thought that counts, after all, and there are plenty of low-cost gifts that are meaningful that can be picked up without breaking the bank in the process.

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While gift-giving is always thoughtful, starting off 2018 one foot in the hole is not the kind of New Year's resolution worth making. Happy holidays are about love and joy, no matter what the advertisements may lead you to believe.

To see the full results from Credible's recent survey, click here.

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Have a festive holiday season. Spend it with family and friends without spending all your hard-earned dough!

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The Federal Reserve sets the guardrails for the federal funds rate, and through that helps control the money supply for the nation.

When you take out a loan for a car, charge something to your credit card, or get a personal line of credit, there is going to be an interest rate that applies to your loan.

A lot of different factors go into what you will be charged, including your own personal credit score. But even those with flawless credit still see a minimum charge that they can't get around. That all goes back to the Federal Funds Rate.

One thing consumers rarely realize is that all of our banks are lending money to each other every night. Banks are legally required to maintain a certain percentage of their deposits in non-interest-bearing accounts at the Federal Reserve to ensure they have enough money to cover any withdrawals that may unexpectedly come up. However, deposits can fluctuate and it's very common for some banks to exceed the requirement on certain days while some fall short. In cases like this, banks actually lend each other money to ensure they meet the minimum balance. It's a bit hard to imagine these multibillion-dollar financial institutions needing to borrow money to tide them over for a bit, but it happens every single night at the Federal Reserve. It's also a nice deal for those with balances above the reserve balance requirement to earn a bit of money with cash that would normally just be sitting there.

The Federal Reserve The Federal Reserve


The exact interest rate the banks will charge each other is a matter of negotiation between them, but the Federal Open Market Committee (FOMC) (the arm of the Federal Reserve that sets monetary policy) meets eight times a year to set a target rate. They evaluate a multitude of economic indicators including unemployment, inflation, and consumer confidence to decide the best rate to keep the country in business. The weighted average of all interest rates across these interbank loans is the effective federal funds rate.

This rate has a huge impact on the economy overall as well as your personal finances. The federal funds rate is essentially the cheapest money available to a bank and that feeds into all of the other loans they make. Banks will add a slight upcharge to the rate set by the Fed to determine what is the lowest interest that they will announce for their most creditworthy customers, also known as the prime rate. If you have a variable interest rate loan (very common with credit cards and some student loans), it's likely that the interest rate you pay is a set percentage on top of that prime rate that your lender is paying. That's why in times of low interest rates (it was set at 0% during the Great Recession), a lot of borrowers should go for fixed interest rate loans that won't increase. However, if the federal funds rate was relatively high (it went up to 20% in the early 1980's), a variable interest rate loan may be a better decision as you would be charged less interest should the rate drop without the need to refinance.

The federal funds rate also has a major impact on your investment portfolio. The stock market reacts very strongly to any changes in interest rates from the Federal Reserve, as a lower rate makes it cheaper for companies to borrow and reinvest while a higher rate may restrict capital and slow short-term growth. If you have a significant portion of your investments in equities, a small change in the federal funds rate can have a large impact on your net worth.

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