The new versions of the iPhone are all we're hearing about as of late with the iPhone 8 and iPhone 8 Plus having just hit the shelves. People have pre-ordered or have awaited the big release date to get the latest and (supposedly) greatest rendition of the innovative smartphone.
The iPhone is universally appealing and Apple lovers tend to upgrade as soon as a new version comes out, willing to spend their hard-earned money on the latest hand-held gadget. Spending for the phone itself is one thing, but what about the plan? That's where many people get hit harder than expected in the wallet by making misinformed or impulse decisions as to which plan to choose.
WalletHub, the personal finance website, has released some valuable information and statistics related to iPhone plans with tips for plan selection and ways to save a considerable amount of cash. What good is a new phone if you can't afford to use it? As per the finance site, choosing the right family plan with new iPhones can save a consumer up to $1,684 if they go with the most affordable carrier and contract option from Walmart Family Mobile. And individuals can pocket up to $917 by going with a no-contract plan from Walmart Family Mobile.
Naturally, purchasing the newest iPhone model is always on the minds of Apple users, but WalletHub notes the major savings attributed to keeping one's old phone and switching to the Walmart plan. According the WalletHub, individuals can save up to $1,495 and families can save over $2,200. With savings like that, the iPhone 8 and 8 Plus suddenly seem not quite as exciting.
All the major cell carriers offer varying plans with contracts available, no-contract deals, installment plans, and other plan options. Deciding on which to go with and which makes the most sense for you and your family can be confusing and overwhelming. Before you get stuck in a less-than-desirable contract or spend unnecessary money, it is advisable to review WalletHub's Cell Phone Savings Calculator to compare plans and price points for a 2-year period. Find insight on the plans offered by AT&T, Sprint, T-Mobile, Verizon, Walmart Family Mobile, and Boost Mobile for both their individual and family plans. As per WalletHub, "Total costs are based on the accounting principal of Net Present Value."
So, before you run out and ditch your old iPhone for a shiny new iPhone 8 or 8 Plus, calculate the costs and see if getting a new phone and/or new smartphone plan is a smart move. With the money you can save, you'll be able to upgrade to the iPhone X before you've had time to break in the 8!
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 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.
Whether you're leaving a job involuntarily, departing for something new, or just want to prepare for the unknown, it is smart to understand all your options regarding your 401k.
Frugal gifting often gets a bad reputation. However, this shopping method does not make you cheap — it makes you practical. Frugal gifts often avoid waste and overspending and can be just as meaningful (if not more so) as any other present.
With the National Retail Federation predicting each consumer this holiday season to spend upwards of $1,000 on holiday gifts amidst an economic recession —this year might be the perfect time to reconsider your spending budget. We've formulated the ultimate list of frugal gift-giving ideas to get you started.