Once the first of October comes around, Halloween is on the minds of Americans as surely as the leaves will fall off the trees. The fun of dressing up, gorging on candy, and decorating the house is a long-running tradition that gets our minds off serious matters and into the spirit of, well, spirits!

But fun isn't free, especially this year. In fact, as per the National Retail Federation, Americans will spend a record amount of money on Halloween in 2017, to a tune of $9.1 billion! The dead must be rolling over in their graves.

From costumes, to candy, to décor and more, Americans will be shelling out substantial cash for the October 31st festivities, up from last year's still whopping total of $8.4 billion. According to NRF, 7 out of 10 people will celebrate, and money is apparently no object. Costumes can be costly, parties are bigger and better than ever, and neighbors are striving to outdo one another when it comes to lawn and home decorating. Plus, NRF says 95% of Halloween celebrants plan to purchase candy… and lots of it. Treats are better than tricks, after all. Where's the fun in Halloween if you don't cap off the night with a stomachache?

NRF notes that men plan to splurge more than women this year, spending $96 on Halloween gear, compared to women who will spend an average of $77. That's a lot of mini Snickers bars and scarecrows. Perhaps they're saving elsewhere so Halloween can be as ghoulishly good as possible.

Why the big spending? The Balance suggests, "Shoppers are willing to spend money on something if it provides a lot of value. Halloween does that. Another reason is that consumer confidence is at its highest level in 10 years. People aren't letting the uncertain state of the global economy scare them away."

This information is sure to make for a Happy Halloween for seasonal retailers who make most of their yearly money in a short bracket of time. Will you be going all-out this Halloween too? And pumpkin spice lattes don't count.

Have a safe one!


Get Ready for Halloween!! Find Your Costumes at TIPSY ELVES!

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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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