Two words come to mind to describe this first week of August: ‘That’s hot.’ Literally. Heat waves are sweeping parts of the country. Plus, the labor market is on a hot streak of its own. See: Major job gains and unemployment falling to the lowest level in almost 50 years. Recession who?
Headlines, Skimm'd
Let’s make lots of money. Children who grow up in low-income households are more likely to earn more $$$ in adulthood if they have rich friends, according to an extensive new study. Researchers found that “cross-class friendships” can impact someone’s economic mobility more than the quality of the school they attend, the state of the job market they enter, or their family’s structure. So if you had a few friends with Barbie Dreamhouses when you were a kid, it might have helped boost your salary.
The kids aren’t alright. Inflation is taking a toll on Gen Z — and they’re charging the added costs. A VantageScore study found that credit card balances for those under 25 years old are up 30% from last year. (Hint: Balances for the rest of the population rose 11%.) To save on costs, many Gen Zers are living at home. A Credit Karma study found that nearly a third of people ages 18 to 25 are living with family, many without plans to move out soon. And we don’t blame them. Rent and home price increases are still on the rise.
Taxes, climate, and…healthcare? Yep. The trio is all wrapped up in the Inflation Reduction Act. The bill aims to promote clean energy through tax credits for those who make green investments (like buying an EV or installing solar panels) and lower healthcare costs via health insurance subsidies. As for the inflation-reducing part, experts predict the bill could actually increase prices for the next couple of years before bringing them down marginally. But the energy credits could help households see annual savings of up to $1,800. Senate Democrats aim to vote on the bill this weekend.
Let’s Talk About…
What the JetBlue-Spirit Merger Could Mean for Your Travel Budget
JetBlue Airways reached a deal to buy Spirit Airlines. The merger is expected to face a slew of regulatory hurdles, but if it is cleared for takeoff, some travel industry pros predict it won’t be great for cost-conscious flyers. Because one fewer airline in the mix could cool competition and mean higher airfare prices for everyone. (Spoiler: This is why regulators are concerned, too.) “Spirit’s low fares cause Delta and United and American, and all the other airlines offer lower fares as well to try to compete,” Scott Keyes, founder of Scott’s Cheap Flights, tells Skimm Money. It might not be all bad news, though.
Make Good (Money) Choices
If you frequently click ‘add to cart’ to boost your mood…
Make room for retail therapy in your budget. Because spending money on things you want can help you feel better and (plot twist) can be good for your budget, too. But keep that happy feeling from turning into buyer’s remorse by making a plan for your impulse shopping. Hint: Consider following the 50/20/30 budget rule, which recommends you put 30% of your take-home pay toward things you want (hi, Lady Gaga tickets). Just watch out for signs you’re overdoing it.
If your fridge is covered in wedding invites…
Don’t forget to budget for gifts. Because travel and accommodations aren’t cheap…and neither is a KitchenAid. Helpful tip: You don’t have to break the bank to show the happy couple some love. Tradition may say you should spend a certain amount, but the number that really matters is the one you can afford. Experts say to avoid going under $50, but pooling funds for a group gift is one way to give bigger without spending more. Skimm the basics of wedding gift etiquette to determine how much you should really spend.
If recession talk has you worried about credit card debt…
Consider a balance transfer. Because one way you can help Future You weather a recession is by getting ahead on high-interest debt payments. ICYMI, Americans racked up a significant amount of credit card debt from April through June of this year. And companies are spending big to get people to apply for new cards. Reminder: You shouldn’t open a new credit card if you don’t need to. But taking advantage of an introductory, no-interest balance transfer offer could help you tackle that debt faster. Find out if a balance transfer is the right move for you.
Tips Don’t Lie
Prepping for a job interview? There’s a good chance the interviewer will ask, ‘Why do you want to work here?’ Hint: You probably shouldn't say, ‘For the paycheck.’ Your answers should show that you’ve done your research and that your values align with the company’s goals. Example: If you were interviewing for a job with Skimm Money, you might say, ‘Skimm Money’s mission to help women money smarter really resonates with me.’ Check out our other ideas for how to respond to this common interview question (plus, all the things you shouldn’t mention).
Crypto, Decoded
Smart contracts are part of what keeps blockchains secure. Like a regular contract, a smart contract is an agreement between two parties. But instead of someone taking action to fulfill the contract (think: completing a job, filling an order), a smart contract uses code to automatically execute the terms. A simple comparison is a vending machine. You put money in, push the buttons, and the machine automatically gives you what you want. Smart contracts have several purposes when it comes to crypto. Example: A smart contract keeps the USDC stablecoin pegged to the US dollar. But not all smart contract systems are as they seem. This week, the SEC charged the people behind Forsage for using smart contracts to operate a pyramid scheme. Always read the fine print.
Hot Off the Web
Don’t be upset if you missed out on all the summer travel fun. Airfares are dropping just in time for a fall getaway.
Work from home? Maybe in LA or NY. But workers in small- to mid-size cities have been back in the office for some time now.
Taxpayers in Georgia can start claiming fetuses on their taxes after six weeks.
Nearly $78,000 a year to taste test candy? That’s the going rate for the Chief Candy Officer job at confectioner Candy Funhouse. And yes, it comes with dental.
High inflation and a potential recession might have you feeling financially drained. New York Times bestselling author Nicole Lapin is here to revive your wallet with “Money Rehab,” her chart-topping daily podcast.
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