It takes a mortgage industry village Take Toshia Drummond (pictured left), of Approved Mortgage Solutions in Plantation, Fla., who was a schoolteacher for 20 years before entering the industry. “Many, many years ago, I was an English teacher and a literacy coach and ultimately thought that eventually I would be a principal and possibly the … [Read more…]
Well, it looks as if a foreclosure moratorium has made its way to the Sunshine state, though it’s not as cut and dry as similar proposals.
The program is voluntary, and relies on the member institutions of the Florida Bankers Association and the Florida Credit Union League to hold off on foreclosures and foreclosure sales for 45 days on primary residences.
At this point, it’s too early to tell who will be onboard, but it’s likely to get good support considering all the related action by larger lenders and individual states nationwide over the past few weeks.
Last week, ING Direct offered to suspend foreclosures until March, following similar action by Chase, Citi, and a number of other large mortgage lenders.
Fannie Mae and Freddie Mac have also put the freeze on foreclosures through the holidays, which should allow about 16,000 families to stay in their homes, at least in the short term.
Florida is one of the hardest hit states in terms of foreclosure activity, ranking third in rate of foreclosure (1 in every 157 homes) and second in number of foreclosure filings (54,324 in October), just behind California.
Default filings have plummeted in California thanks to a new piece of legislation that makes if more difficult for lenders to foreclose on borrowers.
The new law, SB 1137, requires lenders to spend more time and effort on making contact with at-risk borrowers before serving foreclosure papers.
It still remains to be seen whether any of these initiatives will have a lasting and meaningful impact, though a low mortgage-rate environment coupled with a bit of extra time could allow some to get into more affordable mortgages.
Foreclosure filings were reported on 279,561 U.S. properties in October, a five percent increase from the previous month and a 25 percent increase from the same period a year earlier, RealtyTrac reported today.
However, thanks to recent legislation, foreclosure filings have dropped precipitously in key states, most notably, California.
In the Golden State, overall foreclosure activity was down by double-digit percentages for the second straight month, and default filings were a whopping 44 percent below year-ago levels.
Despite this, October marked the 34th consecutive month foreclosure filings have risen, with one in every 452 U.S. households receiving a notice during the month.
However, that streak may soon come to an end, as evidenced by the growing number of foreclosure prevention initiatives being carried out by both individual mortgage lenders and the government.
“While the intention behind this legislation — to prevent more foreclosures — is admirable, without a more integrated approach that includes significant loan modifications, the net effect may be merely delaying inevitable foreclosures,” said James J. Saccacio, CEO of RealtyTrac, in a release.
“And in the meantime, the apparent slowing of foreclosure activity understates the severity of the foreclosure problem in these states.”
As usual, Nevada, Arizona, and Florida posted the top state foreclosure rates, and each saw both a double-digit month-to-month and year-over-year increase, largely because no legislation is in place to artificially slow the pace.
Webster Bank Extends Foreclosure Moratorium
Webster Bank has become the latest mortgage lender to freeze foreclosures, placing a 90-day moratorium on Webster-owned mortgages and expanding its mortgage assistance program to carry out more loan modifications.
The bank will temporarily suspend foreclosure activity for a minimum of 90 days for all qualified borrowers who are more than 30 days in arrears as of November 4, who own their home as a principal residence and are able to document income to support an affordable mortgage payment.
Webster joins a growing number of banks and lenders who have recently pledged similar support, including both Citi and Chase, who initiated like programs over the past week and change.
Flight delays can be unpredictable, but it’s also possible for a delayed flight to suddenly become available. The flight could get back on schedule — and if you’re not there, it may leave without you.
That’s why you shouldn’t usually stray too far from your gate.
Now this doesn’t mean you can’t retreat to an airport lounge or grab a drink at the airport bar, particularly if you’re faced with a multihour wait. But if you do leave the boarding area, pay close attention so you’re not left behind should your flight get back on schedule.
Here’s what to do when your flight is delayed, and how you can still escape a potentially crowded boarding area without missing your flight when it finally happens.
Why flight delays happen — and how they can get un-delayed
In the first four months of 2023, only 76.58% of U.S. flights arrived on time, according to Bureau of Transportation Statistics data. The most common cause of delays in that period was the inbound aircraft arriving late, affecting 7.6% of all flights. In short, an issue with an earlier flight can lead to a snowball of flight delays.
The second-most common reason was air carrier issues (which impacted 7.1% of flights in that period). That includes maintenance or crew problems, aircraft cleaning, baggage loading and fueling.
That said, airlines want to depart as close to the originally scheduled departure time as possible. Even though U.S. airlines aren’t required to compensate passengers for delays like they do in the European Union, airlines still lose money. According to the Federal Aviation Administration’s Office of Aviation Policy and Plans, delays cost airlines a combined $8.3 billion in increased expenses in 2019 to cover costs like overtime crew wages.
Given that, airlines are incentivized to get back on schedule. An aircraft experiencing technical issues might initially trigger an alert that the flight has been delayed. But if the airline has another aircraft on standby, then the flight could get back on schedule as originally intended.
When airlines seize such an opportunity, it’s generally a win-win, as the airline gets back on schedule and passengers arrive on time. However, it can end up disrupting passengers who didn’t realize their flight got back on schedule, particularly if they aren’t even at the airport because they intended to wait it out at home or at their hotel.
But there are ways to find out the status of your flight and stay alerted should that delay get un-delayed.
How to find out why a flight is delayed
Your first task is to find out why the flight is delayed. Something like a shortage of available gates might be solved fairly quickly if the airport can reshuffle idle aircraft and make space for boarding.
Meanwhile, a delay due to a massive storm likely means no flights can take off.
Use the FAA’s flight delay website, which displays airport-wide delays impacting major U.S. airports in real time, to better estimate how long you’ll have to wait. Sometimes the FAA’s website provides its own estimates of delay durations, though note that those are exactly that — just estimates.
If you’re at the airport already, you might also just ask the gate agent.
Keep tabs on your delayed flight with the right tools
U.S. airlines are legally required to provide passengers with flight status changes within 30 minutes of being made aware of the status change. While the DOT requires that information be posted on the airline’s website and through the airline’s telephone reservation system, most airlines make it even easier by sending you flight alerts by email, smartphone app or text message.
When booking your flight, provide contact information and opt in to alerts if you want the airline to message you with updates (you can also typically add your contact information after booking). Download the airline’s app, connect it to your reservation and subscribe to push notifications if you want real-time updates about your flight status.
Third–party tools can also help you keep tabs on your flight — sometimes even better than the airline itself. For example, FlightAware amalgamates real-time flight tracking, airport information and weather data into a user-friendly interface that lets you track your flight status. It offers notifications and visualizations of the flight’s progress on a live map. A FlightAware tool called “Where is my plane now?” shows the location of the aircraft, which can give you an idea of the delay’s length, assuming the issue has to do with the inbound aircraft arriving late.
How to maximize your rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2023, including those best for:
Israel was the most expensive country in which to buy a home in the European region in 2022, according to a new report by financial advisory company Deloitte.
Israel joined Deloitte’s latest Property Index of European residential markets, published in recent days, despite not being a part of Europe, and immediately shot to the top of the priciness table, with an average cost of €5,701 (NIS 23,537; $6,204) per square meter.
Israel is the only real estate market based in the Middle East to be included in the survey of a total of 27 countries. Other countries, including Estonia, Greece, and Lithuania also joined the survey.
The second most expensive country for a second year in a row was Austria, where the average transaction price for new dwellings stood at €4,925 per sqm, followed by Germany with a price tag of €4,800 ($5,200) per sqm. France and Norway, with prices of €4,639 per sqm and €4,204 per sqm respectively, completed the list of the top five most expensive countries to buy a home in 2022.
The most affordable country to buy residential property was Bosnia and Herzegovina, where an average transaction price for new dwellings of €1,237 per sqm was recorded. This was followed by Greece with an average transaction price of €1,330 per sqm. Romania with a price tag of €1,417 per sqm was ranked in third place in terms of the lowest level of transaction prices.
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Comparing residential property markets in 76 cities, Tel Aviv replaced Paris as the most expensive city in Europe to buy a square meter of apartment in 2022, according to the findings of the accounting firm’s annual survey. The average price of a new dwelling in Tel Aviv was €14,740 per sqm, followed by Paris at €14,622 and Munich at €11,400, with London at €9,163 and Amsterdam at €7,775 ranked far behind.
The accounting firm cited the war in Ukraine and rapid increases in energy costs, building material prices, and interest rates as the main reasons that average transaction prices of new dwellings rose over the past year.
View of a construction site for new housing in the southern Israeli city of Beersheba on July 28, 2022. (Nati Shohat/Flash90)
“By raising short-term interest rates at the national levels, residential properties have become less affordable for a larger group of buyers,” it was noted in the report. “This has further fueled the shift towards rental living concepts in many European countries.”
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Over the past year, the Bank of Israel has steadily hiked the benchmark interest rate from a record low of 0.1% in April 2022 to 4.75% in May this year in a bid to rein in inflation, while raising mortgage costs for homebuyers. As a result, home prices, which jumped by a record of about 20% in 2022 year-on-year, have started to cool down in recent months.
That’s as rising interest rates hit existing and potential mortgage borrowers hard, with the majority of home loans in Israel tied to variable rates. At the same time, the amount of equity required to purchase a home keeps rising, and with it, the affordability gap is widening.
“The Israeli residential market started 2022 on a strong note, witnessing sharp price increases in most regions and rapid transaction closures,” according to the Deloitte survey. “In terms of asking prices and transactional activity, a significant number of deals were even closed above the asking price during the early part of the year.”
“However, towards the end of the year, due to the rise in interest rates and the increased costs of mortgages, the price increase came to a halt. In the residential rental market, high interests overcame the rent yields – transactions became non-profitable, and the market decelerated,” it was added.
The report estimated that in Israel a 70-square-meter home cost the equivalent of 10.2 years gross annual salaries on average. By that measure, Israel was the fifth-costliest country in which to buy a new home, after Slovakia, the Czech Republic, Serbia, and Estonia.
The sun rises over Tel Aviv, October 2019. (ZZ3701 via iStock by Getty Images)
Israel was also ranked at the top of the list of countries with the highest number of initiated dwellings, with 6.95 construction starts per 1,000 inhabitants in 2022. This was followed by Austria and Lithuania with 6.47 and 5.81 new housing initiated per 1,000 inhabitants, respectively.
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Meanwhile, Israel has the second-lowest amount of housing stock with 295 dwelling units per 1,000 inhabitants, topped only by Greece with 285 units per 1,000 inhabitants. The average amount of housing stock was 473 dwellings per 1,000 inhabitants in the European region.
Bulgaria had the most housing stock per capita, with 624 dwellings per 1,000 inhabitants. Portugal and France came next with 585 and 552 respectively. In the report it was noted that the size of the total housing stock is often perceived as a key indicator of the quality of life and level of economic development in those countries.
A record 6.99 percent of all mortgages tied to one-to-four unit residential properties were delinquent at end of the third quarter, up nearly ten percent from the second quarter and 25 percent from the same period a year ago, the Mortgage Bankers Association reported today.
That number includes home loans that are at least one mortgage payment overdue, but not yet in the foreclosure process.
Another 2.97 percent of all home loans were in some stage of foreclosure at the end of the third quarter, up eight percent from the second quarter and 75 percent from a year ago.
However, due to a number of foreclosure moratoria and other related loss mitigation programs, foreclosure starts actually decreased ever so mildly from the second quarter.
“Evidence of this can be seen in the large increase in loans 90 days or more past due but not yet in foreclosure,” said Jay Brinkmann, MBA chief economist. “This rate jumped by 45 basis points, the highest increase in this category ever recorded in the MBA survey and far above the average 4 basis point jump we would expect to see.”
“While 20 states showed declines in the rate of foreclosure starts between the second and third quarters, every state showed an increase in the 90 days or more delinquent category with the exception of Alaska and all of the increases were greater than what we would expect due to normal seasonal factors.”
The increase in delinquencies was driven by a large number of loans 90 days or more past due, primarily in hard-hit areas like California and Florida.
These two states also accounted for 54 percent and 41 percent of prime and subprime ARM foreclosure starts, respectively.
Year-over-year, the seasonally adjusted delinquency rate increased for all types of loans aside from FHA loans, which remained unchanged.
Do you have a favorite villain? You’ve got company. Someone recently asked, “Who is the best villain of all time? They can be from film, television, a book, or a video game.” Here are the top-voted villains.
1. Gus Fring
“Gus Fring from Breaking Bad. He is very calm, professional, intelligent, and brutal when angry,” someone stated. Several others agreed he was a scary villain, and Giancarlo Esposito nailed the part.
2. The Joker
“The Joker, hands down,” replied one. Another wondered, “I don’t know if you’d say this without Heath Ledger’s portrayal of him.” A third added, “It’s such a good character that there are at least three excellent portrayals of him.”
“Mark Hamill has been the voice of the Joker in all Batman cartoons and video games since the 90s,” another argued. Then, finally, someone snickered, “I don’t know if you’d say that if you read The Killing Joke, Dark Knight Returns, or Arkham Asylum.”
3. Colonel Hans Landa
“Colonel Hans Landa (Christoph Waltz) from Inglourious Basterds,” someone suggested. “I like his character. Very charming and unforgiving. Christoph Waltz did a remarkable job playing this character.”
4. Ozymandias
Ozymandias (Adrian Veidt) from The Watchmen. Hands down. Cool, calm, and calculated—also the best page in the Alan Moore graphic novel,” someone alleged. “Agreed,” said another. “After I went back to read it the second time, I paid attention to his mannerisms and the weight on his shoulders as he was secretly trying to save the world.”
5. Azula
“Azula from Avatar: The Last Airbender. She’s the most infuriating, cunning, powerful B in the world, but at the same time, you almost feel sorry for her at some points,” someone suggested. “Azula is my favorite character. From anything. She’s just so vicious, and her bending is stunning.”
6. Doctor Doom
“Doctor Doom. He successfully took over the world, and it was better for it. And then he gave it up because he found ruling the world boring. He also once became a god and again gave up the power because being a god was beneath him,” someone shared. “Agreed.But Julian McMahon as Doctor Doom was a huge casting error that ruined the Fantastic Four films.
7. Iago from Othello
“Othello is one of my favorite tragedies. One of the things that are so painful is that everyone calls him “Honest Iago” and treats him like he’s fantastic, and then when you observe the play, the only people who see him be nasty are the audience and Rodrigo. And Emilia. Desdemona and Othello believe him to be a nice, helpful guy. Brilliant and masterful,” said one.
8. Dolores Umbridge
Another voted, “Dolores Umbridge in Harry Potter because she honestly thinks she’s doing the right thing.” Someone added, “Especially in the audiobooks read by Stephen Fry. I don’t know who has the better rendition, him or Imelda Staunton.”
9. Scar
One person said, “Scar from The Lion King. No sitting around and explaining his plans. He just got on with it and killed his brother.” Another added, “They wrote a song about his plans, and the way the hyenas marched around in from of him was just like Hitler.”
10. Darth Vader
“Darth Vader, he’s a classic, and there’s no contest,” alleged one. Several agreed that Vader was the obvious answer. However, one argued, “Darth Sidious from Star Wars.”
“He became Supreme Chancellor of the Galactic Republic by manufacturing a crisis on his home planet. Then, he started The Clone Wars to militarize the Republic and gain unchecked emergency powers. Finally, he mentored and created Darth Vader.”
Source: Reddit.
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Things are getting nasty in the mortgage world. Former Fannie Mae executive vice president and chief credit officer Edward Pinto slammed the FHA in an op-ed piece on the American Enterprise Institute (AEI) website today.
He opened his assault with a definition of predatory lending, which the FDIC defines as “imposing unfair and abusive loan terms on borrowers” and “taking advantage of borrowers’ lack of understanding of complicated transactions.”
This is often done through “aggressive sales tactics” and “outright deception.” Pinto then points out that the FHA’s mortgage insurance program qualifies as “predatory” under that definition.
Pinto Claims the FHA Overcharges Lower-Risk Borrowers
His first argument is that the FHA overcharges lower-risk applicants. He notes that hundreds of thousands of borrowers have been steered into FHA loans instead of cheaper conventional loans.
In fiscal year 2013, he claims roughly 200,000 home buyers that opted for FHA loans could have saved nearly $4,000 over the life of their loans, or $710 million collectively.
Additionally, Pinto points out that FHA premiums add up to 10% of the initial mortgage amount over the life of the loan. And because it doesn’t charge for credit risk, low-risk borrowers essentially pay to subsidize rates for high-risk borrowers.
He further explains that when the FHA was established back in the 1930s, cross-subsidization was “explicitly prohibited,” yet the average low-risk borrower with a $150,000 loan amount is paying an extra $9,000.
Finally, he likens the cross-subsidies to offering what he calls “abusive loan insurance” to scores of high-risk applicants.
He uses a typical FHA loan scenario, which involves a 600 FICO score (below subprime), a 98% loan-to-value ratio (barely any skin in the game), and a 43% DTI ratio (high-end of typical range).
These borrowers apparently have a one in four chance of losing their home to foreclosure, based on the FHA’s own actuarial study.
He Offers Up Strange Solutions to Fix the Predatory FHA
First, Pinto believes the FHA should provide private-government comparisons so borrowers know when and if a conventional loan might make more sense than an FHA loan.
Second, he thinks FHA borrowers should receive a disclosure both three days after loan application and three days before loan closing detailing their estimated risk of foreclosure, based on their loan characteristics. (This would be amazing by the way.)
And if HUD Secretary Shaun Donovan won’t enact such measures, he’s calling on Congress to take matters into their own hands.
This is a pretty intense salvo, and one that seems a bit ill-timed. Over the past year and change, the FHA has made a number of changes to clean things up.
The most notable change was imposing a minimum credit score, and upping the credit score required for a 3.5% down mortgage.
At the same time, the FHA has increased mortgage insurance costs significantly to steer borrowers away from the agency and into conventional loans.
That’s the irony of this whole thing. The FHA has intentionally made itself less attractive to reduce the government’s role in housing, but this has made them “predatory” at the same time.
Ultimately, if a borrower doesn’t have at least 5% to put down on a home, they’ll likely turn to the FHA. And an otherwise low-risk borrower will essentially overpay for mortgage insurance. But perhaps that’s the “cost” of such a convenience.
If a conventional loan product with 3% down isn’t available, you can’t really get an apples-to-apples comparison.
AA stimulus package is a set of financial measures put together by central bankers or government lawmakers with the aim of improving, or “stimulating,” an economy that’s struggling.
Individuals in the U.S. during the past two decades have witnessed two major periods when government stimulus packages were used to boost the economy: first, after the 2008 financial crisis, and second, following the 2020 outbreak of the Covid-19 pandemic.
While viewed by some as key to reviving growth, economic stimulus packages are not without controversy. Here’s a closer look at how they work, the different types of stimulus packages, and their pros and cons.
Government Stimulus Packages, Explained
What is a stimulus package? The foundational theory behind these economic stimulus packages is one developed by a man named John Maynard Keynes in the 1930s.
Keynes was a British economist who created his theory in response to the global depression of the era. His conclusion was that, when a government lowers taxes and increases its spending, this would stimulate demand and help to get the economy out of its depressed state.
More specifically, when taxes are lowered, this helps to free up more income for people; because more is at their disposal, this is referred to as “disposable income.” People are more likely to spend some of this extra money, which helps to boost a sluggish economy.
When the government boosts its spending, this also puts more money into the economy. The hoped-for results are a decreased unemployment rate that will help to improve the overall economy.
Economic theory, of course, is much more complex than that, and so are government stimulus packages. 💡 Quick Tip: Did you know that opening a brokerage account typically doesn’t come with any setup costs? Often, the only requirement to open a brokerage account — aside from providing personal details — is making an initial deposit.
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Different Types of Stimulus
Monetary Stimulus
To get a bit more nuanced, monetary stimulus is something that occurs when monetary policy is changed to boost the economy.
Monetary policy is how the supply of money is influenced and interest rates managed through actions taken by a central agency. In the U.S., that agency is the Federal Reserve Bank.
Ways in which the Federal Reserve can use monetary policy to stimulate the economy include cutting policy rates, which in turn allows banks to loan money to consumers at lower rates; reducing the reserve requirement ratio, and buying government securities.
When the reserve requirement ratio is lowered, banks don’t need to keep as much in reserve. That means they have more to lend, at lower interest rates, which makes it more appealing for people to borrow money and get it circulating in the economy.
Fiscal Stimulus
Fiscal stimulus strategies focus on lowering taxes and/or boosting government spending. When taxes are lowered, this increases the amount of money that people have left over from a paycheck, and that money could be spent or invested.
When money is spent on a greater amount of products, this increases demand for those products — which in turn helps to reduce unemployment because companies need more employees to make and sell them.
If this process continues, then employees themselves become more in demand, which makes it more likely that they can get higher wages — which gives them even more funds to spend or invest.
When the government spends more money, this can increase employment, giving workers more money to spend, which can increase demand — and so, it is hoped, the upward cycle continues.
In the U.S., a federal fiscal package needs to be passed by the Senate and the House of Representatives — and then the president can sign it into law.
Quantitative Easing
Quantitative easing (QE) is a strategy used by the Federal Reserve when there is a need for a rapid increase in the money supply in the United States and to boost the economy.
For example, on March 15, 2020, the Federal Reserve announced a $700+ billion program in response to COVID-19. In general, QE involves the Federal Reserve buying longer-term government bonds, among other assets. 💡 Quick Tip: How to manage potential risk factors in a self-directed investment account? Doing your research and employing strategies like dollar-cost averaging and diversification may help mitigate financial risk when trading stocks.
Pros and Cons of Stimulus Packages
There are advantages and disadvantages to economic stimulus packages, including the following:
Benefits
The goal of a stimulus package, based on Keynesian theory, is to revive a lagging economy and to prevent or reverse a recession, where the economy is retracting rather than expanding. This is a more immediate form of relief as the government also uses monetary, fiscal, and QE strategies to boost the overall economy.
This might include the Fed cutting interest rates, which lowers the rate at which banks loan money to consumers. That can encourage individuals to borrow money, which gets it circulating in the economy.
Taxes may also be lowered, which means workers have more money from each paycheck to spend. That spending may, in turn, increase the supply and demand for products, which can help both employees and businesses.
Risks
However, there are also risks to implementing stimulus packages. An economic theory that runs counter to Keynesian theory is the crowding out critique. According to this thinking, when the government participates in a deficit form of spending, labor demands will rise, which leads to higher wages, which leads to lower bottom lines for businesses.
Plus, these deficits are initially funded by debt, which causes an incremental increase in interest rates. This means it would cost more for businesses to obtain financing.
Other criticisms of stimulus spending focus on the timing of when funds are allocated and that central governments can be less efficient at capital allocation, which ultimately leads to waste and a low return on spending.
Another risk is that the central bank or government over-stimulates the economy or prints too much fiat currency, leading to inflation, or rise in prices. While a degree of inflation is normal and healthy for a growing inflation, price increases that are rapid and out of control can be painful for consumers.
Previous Economic Stimulus Legislation
Perhaps the most sweeping stimulus bill ever created in the United States was signed into law by President Franklin Delano Roosevelt on April 8, 1935.
Called the Emergency Relief Appropriation Act and designed to help people struggling under the Great Depression, Roosevelt simply called it the “Big Bill”; it is now often referred to as the “New Deal.” Five billion dollars was provided to create jobs for Americans, who in turn built roads, bridges, parks, and more.
The Works Progress Administration (WPA) came out of the New Deal, ultimately employing 11 million workers to build San Francisco’s Golden Gate Bridge, LaGuardia Airport in New York, Chicago’s Lake Shore Drive, about 100,000 other bridges, 8,000 parks, and half a million miles of roads, including highways.
Another agency, the Tennessee Valley Authority, collaborated with other agencies to build more than 20 dams, which generated electricity for millions of families in the South and West.
More Recent Stimulus Packages
Additionally, there was the American Recovery and Reinvestment Act (ARRA) in 2009. This was passed into law in response to the Great Recession of 2008 and is sometimes called the “Obama stimulus” or the “stimulus package of 2009.” Its goal was to address job losses.
This Act included $787 billion in tax cuts and credits, as well as unemployment benefits for families. Dollars were also provided for infrastructure, health care, and education, and the total funding was later increased to $831 billion.
More recently, the Coronavirus Aid, Relief and Economic Security Act, or the CARES Act, was passed by the United States Senate on March 25, 2020. On March 27, 2020, the House of Representatives passed the legislation and the President signed it into law the same day.
And in March 2021, the American Rescue Plan was passed by the House and the Senate and signed into law by President Biden. This emergency relief plan included payments for individuals, tax credits, and grants to small businesses, among other things.
The Takeaway
Stimulus packages are used to prop up economies when they are struggling or on the brink of a major recession, or even depression. While in recent decades, such stimulus packages have been credited by some for helping the U.S. economy out of the 2008 financial crisis and 2020 Covid-19 pandemic, others worry that the increase in government deficit is unhealthy, and all that spending could lead to inflation.
For individuals, devising a strategy to help save and invest during times when the economy is struggling — and in general — can be important to achieving their financial goals. Chatting with a financial planner about those goals may be helpful for some when it comes to putting together a plan to save for the future.
Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).
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FAQ
Are there stimulus packages for small businesses?
Yes. For example, as part of the American Rescue Plan, small businesses that closed temporarily or had declining revenues due to COVID were extended a number of tax benefits to help with things like payroll taxes. There were also funds put toward grants for small businesses as part of this economic stimulus package.
How do stimulus packages fight recessions?
Economic stimulus packages are thought to help fight recessions by lowering taxes and increasing spending. The idea is that these measures would boost demand and improve the economy, and thus help avoid or fight recession.
What disqualifies you from getting a stimulus package?
Some reasons that could disqualify you from getting a stimulus package include having an income that’s deemed too high, not having a Social Security number, or not being a U.S. citizen or U.S. national.
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Inside: Looking to celebrate Christmas on a budget? This guide has you covered with creative and affordable ways to do just that.
Are you stressed out about how to afford a fabulous Christmas on your budget? Worry not.
This festive season isn’t about how much cash you fork out, it’s about creating lasting memories and spreading joy.
Why let financial woes dampen the joyous yuletide spirit when you can celebrate a charming Christmas on a budget?
Remember, it’s your money, your decisions, and your rules – no guilt trips or social pressures should force you into spending Christmas in debt.
Today you will learn:
Determine your Christmas budget: Figure out what’s a comfortable amount for you to spend and stick to it religiously.
Be creative with gift giving: Homemade presents or heartfelt letters can be more valuable than pricey items.
Find simple ways to save money: Use these money saving tips to enjoy a festive holiday season.
This holiday season, celebrate responsibly, within your means, for a Christmas that’s merry, bright, and totally guilt-free!
Why Celebrate Christmas on a Budget?
Embracing a budget-friendly Christmas can prove to be not only a smart choice but one filled with warmth, delight, and genuine joy.
Enjoy valuable family bonding time with exciting games and shared activities. Volunteer work, a day of holiday baking, or a simple drive-through Christmas lights sightseeing trip can leave a lasting impression. Look through this Christmas bucket list.
Opt for economical, yet thoughtful gifts or stick to fun gift exchange rules, such as the “four gift rule” for your kids. Remember, it’s the sentiment behind the gift that matters the most.
In essence, an economical holiday season needn’t be a dull affair, rather it’s an opportunity to make it more heartfelt and unforgettable.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
What to buy for Christmas on a tight budget?
Yes, friend, you can buy meaningful Christmas gifts while sticking to a budget.
In fact, the thought behind a gift is often what makes it special, not the price tag.
A few ideas include homemade gifts, gift cards, subscriptions, and second-hand items. With a little creativity, you can find the perfect present for everyone on your list without spending a fortune.
Below you will find plenty of great gift guides for Christmas that won’t break the bank.
Benefits of a Budget Christmas
1. Allows you to plan ahead and stay on track 2. Prevents overspending 3. Buy gifts that are within your budget 4. Focus on quality over quantity 5. Ensures that everyone gets a gift 6. Helps you avoid debt during the holidays 7. Prevents you from feeling stressed out about money during the holidays 8. Be creative and come up with unique gifts 9. Save for next year’s holiday budget 10. Stay connected to the spirit of the holidays
Savings with Christmas on a Budget
From homemade Christmas decorations to unique gift ideas, it’s possible to create magical moments that’ll last a lifetime without a hefty price tag.
Embrace the true spirit of Christmas – love, family, and togetherness, rather than commercialism, and read on to discover how.
Learn the simple ways to celebrate the festive season without breaking the bank with our creative and budget-friendly Christmas ideas.
1. Think about a No Gift Christmas
Having a No Gift Christmas is a creative and budget-saving alternative to traditional holiday festivities, especially suitable if funds are tight. Why not consider it?
Here are some benefits:
You can alleviate the holiday stress often associated with spending on gifts.
It fosters the idea of Christmas as a season of togetherness, not just gift-giving.
It offers the potential for unique and memorable experiences, like volunteering or creating fun traditions with your loved ones.
Remember, having a memorable Christmas doesn’t have to cost much, or anything at all Learn more about a no gift Christmas.
2. Make Your Own Gifts
DIY Christmas gifts are your perfect solution. They not only save pennies but are laced with your love and creativity.
Start by exploring plenty of creative gift ideas available for free online. Need help? Look for “homemade gifts for Christmas” and you’ll be surprised.
Compile a list of possible gifts from homemade candles to personalized coupon books, keeping the recipient’s likes in mind.
Remember, your efforts will reflect in your gift. So, unleash your creativity and let the magic begin.
3. Borrow Instead of Buy
Borrowing instead of buying is a clever way to have a festive holiday while keeping things budget-friendly. This concept is simple: swap decorations, games, or even gifts with friends, neighbors, or family
Discuss your idea with your circle and organize swapping parties to exchange items.
The key is to creatively engage and make it a fun, budget-conscious activity. After all, Christmas is about sharing and caring!
Remember, return borrowed items in their original condition to maintain trust.
4. Attend Free Events
The Christmas season doesn’t have to be a strain on your wallet. Attending free community events can provide fun and festive celebrations:
To find these events, check your local newspaper or community websites. Be sure to:
Take advantage of free refreshments, but also bring your own to share.
Consider hosting a potluck dinner before or after community events.
Attending free events supports your local community.
Remember, Christmas is about togetherness, not extravagant spending.
5. Make Your Own Decorations
To create a festive atmosphere this season, you could repurpose items around your house or make your own decorations.
Choose a color theme and gather items in those shades, then place them together on a mantel or coffee table to create a coordinated layout.
For a natural touch, clip pine needles, branches, or herbs from your garden, and enhance them with glitter.
Additional budget-friendly options include taking advantage of sales and discounts at thrift stores or crafting handmade decorations such as ribbons from fabric strips or Christmas cookie ornaments.
6. Keep Track of Your Christmas Expenses
Just like throughout the year, budgeting is critical to your financial success.
Nothing changes with Christmas, it is crucial to track and budget your holiday expenses. Jot down every potential cost – from the Christmas tree, and food, to holiday décor.
Be thoughtful about what you really need and opt for items you can use for years.
This is one of the cash envelope categories I recommend saving for. To effectively manage your expenses, assign specific dollar amounts to each item on the list, ensuring you stay within your budget.
Enjoy guilt-free spending and effortless saving with a friendly, flexible method for managing your finances.
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7. Share the Spirit
Embracing frugality during the holiday season can not only help you save money, but can also create memorable experiences and meaningful connections.
Small gestures, such as sending heartwarming physical letters to loved ones instead of emails, can still convey thoughtfulness and spur the holiday spirit.
By centering your holidays around family activities and endeavors, like homemade ornaments or a scavenger hunt with small gifts, the focus shifts from materialism to fellowship and unity.
Find more frugal Christmas ideas.
8. Check Out Bargain Stores
Bargain stores provide the perfect solution for savvy holiday shoppers looking to save money without compromising on quality or variety. Not only can you find unique, quirky gifts, but you can also keep a lid on your spending while doing so.
Stores like consignment shops or websites such as Craigslist often have high-quality used toys that are nearly new if you’re willing to look carefully.
Another option is to look at discount retailers like TJMaxx as they often host sales during the holiday season, making it even easier for you to save money while hunting for the perfect gifts.
9. Save Money Throughout the Year
Automating your savings for the Christmas season can be a practical and efficient strategy. The 100 envelope challenge is perfect for this!
By setting aside just $50 each month, you could accumulate up to $600 by December, providing a decent budget for your holiday expenses. This method can ease the financial stress during the holiday season, letting you enjoy the festivities without worrying about overspending.
Consider setting up automatic transfers to a high-interest savings account. This ensures your Christmas funds grow without your intervention.
Lastly, try a no-spend month where you only cover essential bills, giving your savings a significant boost.
10. Start a Side Hustle for More Money to Spend
Engaging in side hustles throughout the year can help you significantly cover your holiday expenses.
By delivering food, completing microtasks, selling gently used items, or shoveling snow, you create extra earnings that can go directly into your Christmas fund.
For instance, extra income from a seasonal retail job could help finance gift-purchasing without straining your usual budget.
This strategy not only prevents potential post-holiday debt but also allows you to enjoy the season without financial stress.
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11. Shop Online Instead of Going to the Mall
Shopping online for your Christmas gifts can seriously ease your holiday stress, and potentially save you money.
Let’s explore why skipping the mall and clicking your way to a merry Christmas might be your best bet this year:
No dealing with holiday crowds or cranky shoppers.
Enjoy sales and deals without leaving your home.
Track prices over time to grab the best deals.
Use Rakuten to save even more money on purchases.
For smart online shopping, prepare a list of gifts before diving in. Take advantage of the “wish list” option on platforms to curate items of choice and make sure you first glance over deal sites before making purchases.
12. Have a Christmas Potluck
Host a festive potluck! Invite friends and family, asking each to bring their favorite dish.
Here are some tips for a successful event:
Get organized and ask guests to bring specific types of food. This prevents duplicate dishes and ensures a balanced meal.
Introduce a fun element. Try a cookie swap or a silly game like “Guess the Cookie.”
Keep decor simple. A large vase filled with greenery and baubles can effectively replace a pricey Christmas tree.
Remember simplicity is key in food and decor. Costly ingredients and complicated recipes aren’t prerequisites for a memorable Christmas.
Remember, the holiday is about togetherness, not extravagance!
13. Make Your Own Cookies
There’s a unique pleasure derived from making your own cookies during the holiday season instead of buying them. More so, the cookies you’ve invested your time and creativity into can double as thoughtful, homemade gifts, adding another level of sentiment.
Apart from being a cost-effective option, it brings an opportunity to bond with friends and family during cookie exchange or decorating gatherings.
Making your personally crafted cookies also gives you control over ingredients catering to specific dietary needs or preference
Indeed, making your own cookies adds value that surpasses the mere cost savings, it infuses the holiday season with warmth, joy, and a sense of shared experience.
14. Cross Off Activities from your Christmas Bucket List
Having a joyful Christmas doesn’t necessarily mean overspending. In fact, integrating cost-effective activities into your holiday routine can make the season more meaningful and fun.
This Christmas Bucket list post offers an extensive and diverse list of creative ideas for budget-friendly Christmas shopping, gifting, and celebrating.
Additionally, downloading the free printables and a Christmas Budget Template will make the process even more manageable and fun.
15. Have a No-Gift Party
A no-gift Christmas party is an affordable and fun holiday celebration where attendees do not exchange gifts. It’s a great option for those looking to save money and still enjoy the festive season.
Here are steps to make it happen:
Step 1: Decide on the party type, either a simple gathering or a potluck dinner.
Step 2: Inform guests about the no-gift policy in advance.
Step 3: Organize exciting, cost-effective activities such as a game night.
Step 4: Engage guests with games for a joyful event.
Expert Tip: Conversation and laughter are your best tools.
16. Make a Christmas Memory Book
Creating a Christmas memory book is an affordable and engaging way to celebrate the holiday season, especially when you’re on a tight budget.
To start, you can utilize items already at your disposal in your house such as old photos, greeting cards, and crafts.
Spend some time penning down heartfelt messages and your favorite holiday memories associated with each picture or craft. Embellish the pages with affordable decorating materials like glitter, stickers, or color pens.
Not only does this create a personalized touch, but it also serves as a nostalgic keepsake that can be cherished for years to come.
Tip: Digitize your memory book by creating an electronic version. This can also help preserve the original items.
17. Spend Time With Loved Ones
Celebrating Christmas on a budget doesn’t mean skipping on the fun.
It’s about cherishing time spent with loved ones, harnessing creativity, and making priceless memories that last a lifetime.
Here are some cost-effective activities you can embrace this festive season:
Share stories of memorable Christmas experiences.
Organize virtual celebrations with extended family and friends.
Create your own family-themed board game.
Bake Christmas cookies or make a popcorn Christmas tree.
Stream a Christmas church service.
If snow is around, engage in snow play.
Dance to classic Christmas music.
Put together an annual family calendar.
Participate in one of these Christmas Challenges!
Remember, it’s not about what’s under the tree that matters, but rather, who’s around it.
18. Stash Christmas presents all year
Do what I do! Begin addressing the issue of holiday budgeting by stashing Christmas presents all year round.
This is a smart and stress-reducing move!
Find deals throughout the year rather than spending lavishly in December. Hang on to items like discounted gifts in your secret gift closet!
As you build an inventory of diverse items, you will be ready for birthdays or sudden party invites – you’re always prepared!
Just be careful to stop shopping when your list is fulfilled to avoid overspending.
19. Write a Christmas Gift List
Creating a Christmas gift list can be an effective way to manage your holiday spending. This helps you understand the overall picture of your holiday expenditure.
Start by writing down the names of every person for whom you consider buying a gift.
Then, determine how much you’re willing and able to spend on each individual. This helps you understand the overall picture of your holiday expenditure.
Take time to brainstorm potential gift ideas within your decided budget for each person. This process can be even easier and more informative if you’re able to reference a gift list from previous years.
Ultimately, the goal is to ensure that your total intended spending is reasonable and manageable for your personal financial situation.
Remember, you may not need to buy gifts for everyone on your list – some individuals might appreciate homemade or free gifts just as much.
20. Choose Great holiday things to do for less
Set aside the societal notion of linking the joy of holidays to copious spending, and welcome small, inexpensive, yet heartfelt gestures.
Adopting a mindset that finds value in low-cost or even free activities, especially during the holiday season, can not only alleviate financial pressure but also create cherished memories.
Instead of focusing on extravagance and materialistic desires, turning attention to experiences and emotional bonding can revolutionize the celebration!
You can always find things to do on Christmas Day.
21. Think Outside the Box With Gifts
Finding affordable gifts doesn’t mean you have to sacrifice quality or thoughtfulness.
By utilizing a gift guide such as the 4 gift rule – something they want, need, to wear, or read – you can ensure a well-rounded and meaningful set of gifts for each child.
Alternately, consulting lists of inexpensive yet creative suggestions like those curated by Money Bliss can help you find unique presents that won’t break the bank. These affordable finds range from books, gadgets, to personal care items, and home accessories.
Regardless of budget, the key to successful gift-giving lies in understanding the recipient’s needs and interests.
22. Consider Re-Gifting
Re-gifting is a practical, budget-friendly, and environmentally-friendly way to celebrate Christmas. It allows unused or unwanted items another chance to be appreciated and might save you some cash too.
Here are some regifting tips:
Ensure the gift is in good condition, unwanted but quality, and not linked back to its original giver.
Consider the preferences of the new recipient, ensuring the gift suits them.
Completely re-wrap the gift to give it a fresh appearance.
Some may debate the etiquette of re-gifting but remember, it’s more about the thought and less about where the gift originated.
Making smart choices can ensure a successful and fun re-gifting experience this festive season.
23. Use Gift Cards or Cash App to Stay on Budget
Purchase a prepaid gift card from your favorite store to ensure you’re limiting your spending to a specific amount and preventing the temptation of overspending.
If you’re planning to shop from a range of places, opt for a Mastercard of Visa prepaid card. While there may be an activation fee, it’s ultimately going to be less than what you’d potentially overspend.
Another great option is using the Cash App card and learn where you can load your Cash App card.
Also, you can use budget tracker apps like YNAB or Simplifi. These can help you meticulously keep track of your spending and stay within your budget.
Remember, the key is to stick to a budget and avoid falling prey to impulsive purchases. Using gift cards or these budgeting apps makes it easier to limit and monitor your expenses.
24. Use Money Gift Ideas Wisely
Money gift ideas can be an excellent alternative to traditional presents, especially when budgeting is a critical aspect.
Too many times, money gift ideas are overlooked as impersonal, but a money gift box or money cake will definitely surprise the recipient.
This will guarantee you will stay within your target budget by using money gift ideas.
For larger families, a gift exchange with a set price limit can keep costs manageable.
25. Donate to Charity Or Volunteer
Volunteering at a charity is a meaningful way to give back during the holiday season that doesn’t put a strain on your budget.
Instead of buying more items a person may not need, you’re investing time, money, and energy in causes they care about. Although this doesn’t require a financial commitment, it’s a generous gift full of sentiments.
Furthermore, donating money to a charity in someone’s name is a thoughtful and effective way to honor someone who already has everything they need. It allows the recipient to feel the joy of giving, yet remains a budget-friendly option for the giver.
If you’re keen on frugal yet meaningful ways to celebrate Christmas, how about considering charitable donations? It’s a splendid alternative to traditional gift-giving – not hard on your wallet, plus it makes a difference!
Most people know it is hard enough to buy gifts for the woman you who has everything or kids who have everything.
How to Make a Christmas Budget
A lot of joy and goodwill is associated with the holiday season; however, it also brings with it the challenge of managing finances meticulously to avoid slipping deep into credit card debt.
One of the effective ways to keep your finances under control during this festive time is by creating an efficient Christmas budget.
In the following sections, we will delve in detail into the simple process of creating a feasible Christmas budget that you can adhere to.
Step 1: Decide What You Want to Spend on Christmas
Determining how much to spend at Christmas depends on your individual budget and financial situation.
On a general basis, most people will overspend at Christmas in order they don’t look broke or not generous.
However, that thought process is backward if you are trying to reach your financial goals. You need to decide on how much you want to spend at Christmas time.
That is why these consumable gifts tend to be popular.
Expert Tip: Avoid surpassing your Christmas budget to prevent feeling the pinch of holiday debt later on. Stick to your allocations and plan things out in advance.
Step 2: Make a List of Christmas Gifts
Creating a list is essential for budget-friendly and stress-free Christmas shopping.
This prevents you from forgetting someone important by intuitively documenting all the people you intend to get gifts for. Also, allows for the clear allocation of your total Christmas budget, preventing overspending on some individuals and under-spending on others.
If you aim to economize, consider the 4-gift rule: something they want, something they need, something to wear, and something to read. This method provides thoughtful gifts for children while maintaining a manageable budget.
More importantly, a well-planned list significantly reduces the time spent shopping and aids in buying gifts early before the holiday rush begins.
Expert Tip: Don’t forget to consider items like stocking stuffers, last-minute gifts, or teacher’s gifts, and the cost of extra food for holiday gatherings.
Step 3: Prioritize Your Spending
Prioritizing where to spend money relative to your financial goals is crucial to achieving long-term financial stability and health. It ensures that your money is allocated effectively, giving priority to necessities and matters that directly support your objectives.
This practice can also prevent unnecessary expenditures and helps in averting serious overspending, especially during high-spending periods like the Christmas season.
Thus, you will need to prioritize your Christmas budget before the festive season. It helps prevent overspending and keeps you debt-free.
Step 4: Limit Your Christmas Spending
First, it is important to abandon the notion of a “perfect Christmas” and focus on enjoying the holiday within your budget.
You can even educate your family members about the concept of holiday budgeting and involve them in your planning process.
Consider proposing less expensive alternatives to traditional gift-giving within your extended family such as handmade or recycled gifts, or conducting a white elephant exchange with budget-friendly novelty items.
Don’t overlook smaller gifting costs that can accumulate, like Christmas stockings – instead fill them with practical, affordable items that your family needs.
Save money on wrapping supplies by using items readily available at home like newspaper or butcher paper and involve the kids in a fun, cost-saving activity by having them create homemade gift tags.
Remember, sticking to your budget doesn’t mean letting go of the Christmas spirit. It’s about celebrating responsibly and starting the New Year without financial stress.
Step 5: Ignore Sales and Keep it Simple
Sales, sales, sales – the deal is too good to pass up!
Here are key ways to overcome this common dilemma.
Resist impulsive purchases compelled by sales, and stick strictly to your shopping list.
Pause before purchasing an item not on your list, consider the necessity.
Keep emotions in check, they run our shopping decisions.
Conquer emotional spending, stay true to your budget.
Discourage additional spending once your list is fulfilled and the budget exhausted.
Remember that it’s better to focus on affordable presents rather than seeking the perfect, but expensive, gift.
Step 6: Shop for Christmas Gifts Early
Start early. Begin watching for sales on items from your Christmas gift list way before the season’s rush.
Begin monitoring for sales early, especially during holidays that precede Christmas, to stretch your budget further.
Make use of Black Friday and Cyber Monday. They provide excellent opportunities to snag deals on your gifts.
Expert Tip: Remember to stick to your list. If it isn’t on your list, pass it up. It’s challenging but keeps your budget in check.
Step 7: Reuse and Recycle Holiday Decorations
Start by taking stock of items in your house. Don’t limit yourself to traditional decorations—choose a color theme and scan your home for items that fit and can be repurposed.
Use the resources outdoors. Pine branches, pine cones, mistletoe, and holly can be fashioned into decorations from nature’s catalog.
Even consider trading decorations with friends or family. This can bring a new look to your home without the need for new purchases.
Get creative with items from dollar stores that can be combined to appear high-end and save costs.
How to buy gifts for Christmas on a budget?
Maintaining a budget doesn’t mean you can’t enjoy giving gifts this Christmas.
Use these gift guides to help you out:
Remember, the joy is in the giving, not in the cost of the gift.
Time to Create Your Holiday Budget and Make it Memorable
Regardless of your financial situation and the extent of your holiday plans, this guide will help you maintain financial stability while fully embracing the Christmas spirit.
By setting aside a prescribed sum for your holiday expenses, you’re able to enjoy the season without the stress of unexpected expenditures or financial shocks after the holiday haze has cleared.
Celebrating Christmas on a budget doesn’t mean skipping the fun or the warmth.
With just a dash of creativity and thoughtful planning, you can make the yuletide season enjoyable and meaningful without breaking the bank.
Use the festive tips provided and start planning your budget-friendly Christmas now. Remember, the true essence of Christmas isn’t in extravagant spending—it’s about love, joy, and spending quality time with those who really matter to you.
Don’t forget to access a free printable worksheet for your customized holiday budget.
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