Does heading to the mall at the peak of gift-giving season seem like a noel nightmare? Would you rather shop cuddled up in your flannel PJs than run the risk of bumping into neighbors at your local stores and boutiques? And does the idea of being trampled by a pack of savings-hungry holiday hounds sound less-than-cheery? If seasonal shopping has you feeling like The Grinch, ringing in the holidays from behind a computer screen may be the only way for you to stay sane. You may not get to sit on the department store Santa's lap, but your laptop will have to suffice.
But you will not be the only one tapping feverishly on your keyboard this shopping season. More and more people are giving up driving in traffic and standing in line to find the perfect gifts for those on their shopping list. For the first year, online shopping will beat out in-store sales, making the marvels of modern technology as holiday-friendly as ever. Does Amazon hire reindeer come wintertime?
It is true, forget about jingling all the way to a crowded store promising bags-full of festive gifts at rock bottom prices. And no need to skip Thanksgiving dessert to be the first to arrive at a pre-Black Friday sale that will have your head spinning. As per Business Insider, "People say they plan to spend more money online than in stores this holiday shopping season. This is the first year in Deloitte's annual survey that shoppers have predicted their online purchases will exceed what they buy in-store." Will you be one of these at-home shoppers helping boost these numbers?
While the stats are not through the roof – Business Insider notes, "Shoppers plan to spend 51% of their holiday shopping budget online, compared to 42% in stores, according to Deloitte's survey of more than 4,000 Americans," it is still a significant enough uptick from last year, and the trend is on an upward swing. And this number equates to 108 million people who shopped online on Thanksgiving weekend last year, which was 5 million more than the year prior. With this trend, 2017's outlook for online shopping will be impressive. Great for online retailers, not-so-hot for the brick-and-mortars trying to keep pace with the wonders of the web.
Do you love the thrill of snooping through shelves, rustling through racks, and hearing the "cha-ching" of the cash register? Is it important for you to see and feel items in person before committing to a purchase, especially one that is set to be a gift? Or, like millions of other Americans, is online shopping satisfactory, if not more appealing than making your purchases in-store?
The perks of shopping online are evident – more choices, the ability to easily price shop, no crowds, any-time-of-day browsing, and so on and so forth. The holiday energy may be lacking, but the convenience is enough to give the carolers a night off.
Happy holidays! And whether you shop online or head out, let's hope your gift list has more loved ones labeled as "nice." Or better yet, pray you're not on anyone's "naughty" column!
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.