Hey there.
This week, we're kicking off Hispanic Heritage Month by reflecting on how integral the Hispanic community is to the US economy. Think: one of the highest labor force participation rates compared to other demographics. And faster revenue growth for Latinx-owned vs. white-owned businesses over the past two years, according to a 2020 report. That's worth celebrating, but there's still a lot of work to be done.
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The proof is in the poverty rate. Poverty in the US hit a record low of around 9% in 2020. That is, if you factor in then-President Donald Trump's relief measures (read: stimulus checks and tax credits). Without those funds, the US poverty rate actually hit 11%, increasing for the first time in five years. Worse: even with gov aid, Black and Hispanic Americans reportedly experienced more poverty.
Ready, set, (tax) hike. This week, House Dems debuted new proposals to help pay for their latest $3.5 trillion spending plan. Like an additional 3% tax on America's highest earners, giving the gov power to negotiate prescription costs with Big Pharma, and raising corporate taxes.
The (debt) limit does exist. The US gov is on track to default on its bills as early as mid-October unless lawmakers raise the debt ceiling (aka the max amount the gov can borrow by issuing bonds). GOP leaders say 'nope' until gov spending is reined in. Dems are considering attaching a debt ceiling increase to a plan to fund the gov for the next fiscal year – something Congress must do to avoid a shutdown by the end of the month.
News to Wallet
If you'd like to speak to the country's (monetary policy) manager, call the Federal Reserve. It keeps an eye on several key numbers (hint: the unemployment rate, consumer prices, and GDP) to make sure the economy's running smoothly. If anything is out of whack, it steps in to try and get things back on track. How? We Skimm'd it – and what it means for your wallet – for you. Check out our guide, then impress your friends by explaining "quantitative easing."
Make Good (Money) Choices
If your wallet had a hot girl summer…
Start fresh with financially responsible fall. First step: check in on your recent spending habits and look for ways to free up some cash for the rest of the year. Then work on some important money to-dos. Like prepping your holiday budget. Yes, in September. And taking advantage of any unused work and health benefits. First to check everything off this fall money checklist gets to stress less.
If groceries eat up a big part of your budget…
Make your shopping list go further. Global food prices were up 33% in August, and the Consumer Price Index (which measures the average price of things like food, clothes, and housing) jumped 5.3% since August 2020. Pro tip: buy budget-friendly foods like peanut butter, rice, potatoes, and canned or frozen veggies. They have a long shelf-life and you can use them in a lot of different recipes.
If you've got your eyes on a shiny, new iPhone…
See if you really need an upgrade. One study estimates that iPhones typically last around four years, depending on how they're handled. (Psst...leaving it in direct sunlight or a hot car can cause it to malfunction and shorten its life.) One sign your device might be on its last legs: you're constantly in need of a charger because your battery drains quickly. Another red flag: no more software updates. Apple phases out software updates for older models, and these updates are what protect you and your personal info from hackers.
Asking for a Friend
Q: How did you know you were financially prepared to start your business?
Leslie and Karen Garcia: We didn't.
Leslie: We wanted to test the idea since we were first-time entrepreneurs – especially since it was our first time in apparel. We wanted to test if there was a community for this. We started with drop shipping to test our idea, which helped us [reduce] risk and the overhead [costs]. And we were able to kind of order shirts as we got orders...I think that's probably one of the wisest things we did was just test the idea and see...is there a buyer for this? Is there a customer that wants this? And thankfully there was.
Q: How were you able to build your financial safety net around your business?
Leslie: One of the best ways was not having that overhead [cost]. And letting the money stack until now, when we're able to invest…We were very slow and steady. We watch our numbers, and we've learned to read them to answer questions like: How much can we spend here? What do we have to wait for? What's coming up? I think that's still something we're learning.
Karen: And building your credit – even our own personal credit in order to get business credit. Make sure you're being wise with your [personal] finances, too.
Read more from Leslie Garcia and Karen Garcia – founders of the streetwear and empowerment brand Daughter of an Immigrant. In honor of Hispanic Heritage Month, theSkimm spoke with the sisters about starting their business, the message behind the brand, and some advice for those looking to start their own biz, too.
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