Welcome to tax season. Uncle Sam started accepting 2021 tax returns on Monday, so it’s time to get your docs together. Remember, the IRS is saying 'be patient with us' and to expect delays on refunds. (Psst…beat the rush, file ASAP.)
Headlines, Skimm'd
This meeting could have been an email. The Fed met for the first time this year. And with inflation at its highest level in nearly 40 years, chair Jerome Powell said ‘it’s time to wrap up pandemic stimulus spending.’ The Fed will end its aggressive bond-buying program (aka what’s been helping hold interest rates down) by March. Also when it’s expected to make its first rate hike. Skimm what rising rates mean for your wallet.
MILF Money. As in, mom I’d like to fund. A study released this week found that newborn brains might get a boost when their moms get some extra cash. It gave 1,000 low-income mothers either $20 or $333 a month, with no strings attached. After a year with the financial help, the babies of mothers who were given the higher amount showed brain activity associated with stronger cognitive development. More research is needed to confirm, but this early evidence highlights a link between economic support and childhood development. Which could help bolster support for gov programs like the expanded child tax credit.
Pain at the pump. US consumers are feeling the ripple effects of the ongoing Russia-Ukraine conflict. Fears of a Russian invasion in Ukraine have already sent the price of oil to its highest level in seven years. And President Joe Biden, along with European allies, is threatening President Vladimir Putin with economic consequences if he decides to move troops forward. Which would further limit the world's oil supply and could push prices higher. And it’s not just Russia. Political moves made in Washington or elsewhere can have a major impact on your wallet.
News to Wallet
If you’ve been following the market this week, hope you didn't get whiplash. On Monday, the S&P 500 (hint: an index that tracks the value of 500 big US company stocks) plunged 10% from its high — what’s called a correction — before rallying. Then on Thursday, markets headed up, thanks in part to encouraging new stats about the economy’s growth. Before going back down, adding to this month's losses.
Market volatility isn’t always an easy thing to stomach. But it's part of being invested. And can be caused by a number of factors. Like geopolitical tensions (hello, possible sanctions against Russia) and policy changes (like rising rates). Over time, these bumps tend to even out. Your move: Focus on your long-term financial plan, and check out our guide for a refresher on how to handle the market’s ups and downs.
Make Good (Money) Choices
If you’re ignoring your credit card debt…
Get your head out of the sand. The ostrich effect — aka hiding from your problems — is one way anxiety over money can manifest. And while it’s normal to worry about your finances sometimes, you might have a bigger problem if the stress is all-consuming. If that’s the case, start by acknowledging your money anxiety. Then recognize your biggest worries so you can address them. Scared to spend? Afraid of losing on an investment? Our guide on coping with money anxiety will help you identify your next steps.
If you’re getting sticker shock at the grocery store…
Mix it up. Your food budget, that is. The Omicron wave is worsening supply-chain issues contributing to record-high inflation. Including food prices. So you might need to start shopping differently. Example: Compare prices at different stores to find the best grocer for your green. Psst…apps like Instacart and Basket can help you shop around without leaving your couch.
If the price of your prescriptions needs a chill pill…
Check with your doctor — and maybe billionaire investor Mark Cuban. On Wednesday, he announced the launch of an online pharmacy aimed at lowering prices on prescription drugs. The Mark Cuban Cost Plus Drug Company won’t accept insurance. But it guarantees customers only pay the price of manufacture, plus a flat 15% markup and $3 charge for pharmacists’ labor. Which is less than what customers often pay at traditional pharmacies, even with an insurance plan discount. Another way to save on prescriptions: contribute to an FSA (flexible spending account) or HSA (health savings account). Both let you use pre-tax dollars to pay for prescriptions and other health-related expenses.
Crypto, Decoded
The "Dogefather" is back at it. Tesla CEO and crypto enthusiast Elon Musk tweeted on Tuesday that he'd eat a McDonald’s Happy Meal on TV if the chain started accepting dogecoin, aka a meme-based crypto that started as a joke. No joke: The coin’s price rose 7% that day. Because sometimes tweets move markets.
So wait….is crypto something you can spend? Or make money on? The answer is: yes. Here are your options:
Spend it. Like any other currency. Some companies (think: Tesla, Overstock, Expedia, and Newegg) accept certain types of crypto as payment. So make sure you have the right crypto — and wallet — before adding to cart.
Invest in it. You can buy crypto on an exchange. And then trade it for another crypto to try and make a quick profit. Or hold it for the long term, hoping the price will go "to the moon."
Store it. Some think crypto is like gold — a commodity that's not tied to a gov-backed currency — and can hold its value against inflation. Others point out that the argument hasn't held up during this time of soaring prices.
PS: Crypto burning a hole in your (virtual) wallet? Check out our guide on how to buy, spend, and store crypto.
PPS: Watch theSkimm co-founder Carly Zakin break down the basics on Instagram Live with Alex Taub, co-founder of Upstream.
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