There are simple changes that you can make to end up saving big bucks. If you can trim down the budget in certain areas it leaves more funds to direct elsewhere.


Refillable Water Bottle

Don't waste your money getting bottled water when free water is literally all around you. Spend some money on a nice water bottle and it will pay for itself over and over again. Depending on where you buy the disposable cheap plastic water bottles it's a couple of dollars every time. If you frequently buy bottles it's just not an economic habit to have. There are additional benefits to carrying your own water bottle too. First off, environmentally you're making a difference by not participating in the buildup of plastic in landfills. Secondly, you can choose one that makes you happy aesthetically or you could get one based on function so it feels more personal. And finally, cheap water bottles won't help keep your water cold and fresh like a refillable one anyways so ditch it. This upgrade will be worth it.

Make Your Own Lunches

Eating in saves so much money and can be a great healthy decision as well. Even if you go and get a cheap meal everyday the costs start to build up. Making your own food dramatically reduces cost. Not only that but it's a good idea to think about your health and to learn how to cook as a life skill. If you simply do not want to be making lunch for yourself everyday then you have two great options. One, just swap out one lunch a week and then two and just see what happens. Find where the balance is for you between cheap homemade lunches and exciting or efficient lunches out. Two, if you hate getting stuff ready in the morning and you just want to sleep then prep everything beforehand. Batch cooking is a huge trend and you can find great resources on it online! Make everything on the weekend and then leave it all set up to grab on your way out.

Make Your Own Coffee

It is so much cheaper to stay away from Starbucks and make your own brew. Buying a coffee maker or french press will pay for itself in a short period of time. If you go to Starbucks for the convenience then think about where you could skip it without losing time or energy. If you like it for the fun and funky flavors then try experimenting at home. There's nothing these coffee places have that you couldn't buy for yourself if you really wanted to. All the different coffee blends and fancy flavors are accessible to buy and use at home.

Shop Smart

Try to shop sparingly or strategically. If you don't want to quit shopping then just make some small changes to switch up your spending. Shop sales and keep an eye on stores websites to see when their products are on clearance. Try to shop outlets and factory stores to get a discount on pricier items. If you're grocery shopping and are afraid of overbuying then try to carry a granola bar in your bag or car so you never go to the store when you're hungry. Shopping while you're clear headed and don't have to eat you'll be able to make smarter purchases and won't overfill your cart.

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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.

Getty Images/Maria Stavreva

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