Money·5 min read

Skimm Money: SPACs, Lowering Bills, and Wage-Price Spiral

negotiate bills
Design: theSkimm | Photo: iStock
December 10, 2021

In the second week of December, the US gave to me: regulation for cryptocurrency. Or something like that. This week, President Joe Biden announced a new strategy for the recently formed crypto task force to focus on investigating and prosecuting criminal misuse of virtual currencies and exchanges. And several top crypto execs had to answer questions in Congress. TBD on what even more eyes on crypto means for the market and you. But here's more money news and tips you need to see.

Headlines, Skimm'd

  • Inflation nation. In November, the Consumer Price Index rose 6.8% year-over-year, the highest level in 39 years. Prices on pretty much everything climbed, especially gas and groceries. The Fed's expected to share details next week about their plans to help. PS: We Skimm'd seven ways to protect your wallet from inflation.

  • D&D in the House. As in, defense and debt. On Tuesday, the House approved a bipartisan $768 billion defense spending bill. And legislation that will make it easier to raise the debt ceiling (again) before the December 15 deadline — even without Republican support. The Senate agreed on Thursday.

  • Still calling it quits. In October, 4.2 million Americans left their jobs, down slightly from September but still near a record high. Bright side: the big reason they're leaving is because they're finding better opportunities elsewhere. Before you join the club, make sure your money is ready.

News to Wallet

how ipos affect your wallet
Design: theSkimm | Photo: iStock

What's Got Wall Street Buzzing?

A record number of companies went public in 2021. Robinhood and Bumble IPO'd. Coinbase and Roblox opted for a direct listing. And this week, Buzzfeed went public via SPAC, and it didn't go well. A SPAC is a shell company that raises money through an IPO, then buys an undisclosed private company — effectively taking that company public. Since investors don't know what kind of a deal the SPAC will do when they first buy in, it's normal to bail. But about 94% of the money invested has reportedly been withdrawn from Buzzfeed's SPAC — an unusually high number, indicating investors don't feel good about the company's future. The stock price also dropped 11% on its first day. Big picture: Half of all large 2021 debuts are trading below their OG listing price. See how companies going public can affect your wallet.

Make Good (Money) Choices

negotiate bills
Design: theSkimm | Photo: iStock

If you're looking for any way to spend less right now...

Negotiate. Price tags on things like rent, cable, and other bills aren't written in Sharpie. Sometimes all it takes to save money is asking nicely. Even if you get a 'no,' you might be able to work out an interest-free payment plan on medical bills. Or another concession from your landlord, like free parking or a new appliance. We Skimm'd a few more tips for talking your bills down.

If you want more money and less stress in 2022…

Automate. From paying bills to investing, putting your financial life on autopilot could help save you time, brain space, and money. Start by paying yourself first. Read: savings before bills eat away at your bank account balance. Then see what else you can set and forget. Warning: overdraft fees kill the fun. So be sure to check in every now and then.

If you're still looking for your dream home...

Save while you search. Bidding wars, low inventory, and rising prices meant many would-be homebuyers missed out this year. But 2022 and potential new listings are around the corner. Keep your down payment readily available. A high-yield savings account can let your house fund earn a little money while you wait. If you've decided to delay a couple years, investing the cash could help you build a bigger down payment for when you find the one.

Thing To Know 

Wage-Price Spiral

An economic theory that says when pay goes up, so do prices. Because when people have more money to spend, they do, leading to greater demand. And high demand often means businesses can bump up prices. Aaand rising prices means people need more money to cover the same costs, so they might ask for a raise. Spiral. Oh, and right now prices are going up. So are wages. Coincidence? Depends on who you ask. Wage-price spiral believers say this is proof bigger paychecks will make inflation worse. Alt theory: If higher wages = more workers = a more efficient supply chain, then prices can get under control.

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