How to Become a Plumber in 2022

Licensed master plumbers have the highest earning potential. The top 10% of plumbers can earn ,920 a year, according to the Bureau of Labor Statistics.
And on the high end, earning potential for master plumbers nearly reached 0,000 for the top 10%.
How Much School Do Plumbers Need?

How to Become a Plumber in 4 Steps

Potential education topics at a vocational school might include plumbing theory, water distribution, blueprint reading, draining and venting, pipe cutting and soldering and even electrical basics.
If you are currently a high school student interested in becoming a plumber, take all the math courses you can. In addition, choose classes like physics and shop to help you build an effective knowledge and skills base.
Becoming a plumber is all about licensure, so college is not a requirement. However, plumbers typically need to have their high school diploma or general equivalency diploma (GED) to start an apprenticeship. A diploma or GED is also important if you plan to take any plumbing courses at a community college (more on that below).

1. Get Your High School Diploma or GED

To be considered a journeyman plumber, you will need to pass your state’s licensing exam. In general, you will need to renew this license every three to five years and take continuing education courses to maintain your licensed status.
A plumber’s skill set is varied. As a plumber, you will need the technical knowledge to diagnose plumbing problems and make repairs. You will also need to be proficient in using a wide variety of tools, including saws, hammers, screwdrivers, wrenches and torches. Remaining in top physical condition is crucial, as you will frequently do heavy lifting and perform tasks that require stamina, often in very hot or cold environments.
Most states require you to operate as a journeyman plumber for a set number of years (between two and five) before you can seek licensure as a master plumber. To earn your license, you’ll need to pass a written and practical exam.

2. Become an Apprentice

Upon completing your apprenticeship, you can apply to become a licensed journeyman plumber. Once you reach this status, you will be able to work unsupervised on commercial and residential projects.
Becoming a plumber does not require the college career path. Instead, you will complete high school and find work as an apprentice. After a few years, you can get licensed as a journeyman plumber and then a master plumber.
We’ve found the answers to the most commonly asked questions about becoming a plumber, including how long it takes until you’re repairing leaky sinks on your own.
To earn a plumbing license, you must first complete a four- to five-year apprenticeship and then pass the journeyman exam; an apprenticeship includes classroom instruction but no formal school program. Some plumbers choose to attend a year or two of plumbing trade school before their apprenticeship.
A plumbing apprenticeship program includes on-the-job training and some classroom instruction, but many plumbers choose to attend a vocational school as a first step. Plumbing trade schools may offer special certification or even a two-year associate degree.

3. Become a Journeyman Plumber

In general, you can find a plumbing apprenticeship program through trade unions, community colleges, trade schools and even private businesses. You might need to pass an exam or interview with a licensed plumber.
How Long Does It Take to Become a Plumber?
How Much Money Do Plumbers Make?

4. Become a Master Plumber

Ready to stop worrying about money?
Depending on your state, you may be able to earn special endorsements and certifications. For example, in the Lone Star State, in addition to your Texas plumbing license, you can obtain endorsements for medical gas piping installation, multipurpose residential fire protection sprinkler installation and water supply protection installation and repair.
Scroll on to learn how to become a plumber — and what you can expect out of the career.

Wondering how to become a plumber? Our guide covers the education, apprenticeship and licensing requirements on your journey to getting certified as a licensed plumber — and offers a peek into the day-to-day, job outlook and typical salary.

Optional: Go to a Trade School

Earning a special degree or certification can give you a leg-up when applying for competitive apprenticeships.
In high school, math will be crucial to your role as a plumber. Each day, plumbers use concepts from algebra and geometry, and they’re regularly calculating using various units of measure.
At the journey level, you can work for a plumbing company or start your own business.

How Much Do Plumbers Make?

Plumbers can work on both residential and commercial projects. The day-to-day duties might include remodeling bathrooms and kitchens, replacing and repairing water and drain lines, installing new water heaters, installing new faucets, installing new toilets and installing water filtration systems.
In 2021, the median pay for plumbers was ,880, but the top 10% earned ,920.
As a master plumber, you’ll reach peak earning potential and can even run your own plumbing business.

What Do Plumbers Do?

If you want to work in a supervisory capacity or be able to employ additional plumbers for your business, you will need to become a licensed master plumber.

Necessary Skills

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Plumbing apprenticeships generally last four to five years, during which time you’ll receive roughly 2,000 hours of on-the-job training in the plumbing trade, plus technical instruction. During this time, you’ll learn about local plumbing codes and regulations, how to read blueprints and OSHA safety regulations.Advanced education may cover topics like plumbing fixtures and drainage systems. Unlike pursuing a college degree, however, plumbing apprenticeships are paid.

Challenges

The median pay for plumbers last year was ,880, according to the Bureau of Labor Statistics. Though the labor is tough, hours can be long and the work can be dangerous, becoming a licensed plumber may be well worth it if you have the necessary skills and dedication.

Frequently Asked Questions (FAQs) About Becoming a Plumber

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Becoming a licensed plumber takes at least four to five years, as this is the general length of an apprenticeship. Some aspiring plumbers choose a year or two of vocational school before their apprenticeship. After completing an apprenticeship, you can earn your journeyman and then master plumber license.
As an apprentice plumber, you won’t be able to tackle projects yourself. Instead, you will shadow a journeyman plumber or a master plumber, depending on the program.
License laws and types vary by state. Determine the state that you wish to operate in as a plumber, and research those specific guidelines. The steps below offer a more general look at how to become a plumber.
Plumbers need to be able to cut and solder pipes, diagnose and troubleshoot issues with plumbing systems and interpret (or even draw) blueprints. If you run your own plumbing company, you will also need to handle advertising, scheduling, taxes and billing — or hire someone to do that for you.
An apprenticeship offers on-the-job experience and classroom education. Programs vary by state and organization in terms of structure, length and application process.
Skilled plumbers fulfill a crucial need in society, and demand for plumbers continues to grow. Though the manual labor is often grueling, a career in plumbing can be quite lucrative — and doesn’t require expensive schooling and massive student loan debt.

Once you have your diploma or GED, the next step to becoming a licensed plumbing contractor is either attending plumbing school or completing an apprenticeship. Plumbing school is typically optional (but we’ve got more details below); many plumbing hopefuls skip straight to an apprenticeship. <!–

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While the BLS targets 5% job growth through 2030, the increase in home renovation projects due to the ongoing pandemic may create even more plumbing jobs in the years ahead.

Is Recession Coming? Watch These Signs

recession market scare crash downturn stock business men
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There’s no time stamp on when recessions pop up, or how long they last. Our last recession was two months long at the onset of the COVID-19 pandemic in 2020, making it the shortest on record.

The one before that was the Great Recession starting in 2007 and lasting 18 months, the longest downturn since World War II.

If the stock market and economy are keeping you on the edge of your seat, you can look for signs of a recession before it hits. That can help you determine whether you should start preparing for a recession, and the act of getting your finances ready for a possible downturn should give you some peace of mind.

An inexact science

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Before we dive into the possible warning signs of a recession, it’s worth noting that predicting a recession is not an exact science.

So, while the following warning signs historically have served as indicators that a recession might be on the horizon, that doesn’t mean they are foolproof. The economy is dynamic, and there is no list of indicators that have preceded every past recession.

Still, the following indicators tend to be a good place to start looking if you’re worried about whether a recession lies ahead.

Sign No. 1: The yield curve inverts

Positive yield curve
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Typically, long-term bonds pay more than short-term bonds, as illustrated above. This makes sense: If you agree to tie up your money for longer periods, you should be paid more for your trouble. This is why a five-year certificate of deposit (CD) pays more than a one-year CD.

Rarely, however, the reverse is true: Long-term bonds start paying less than short-term bonds. When that happens, a recession often follows. In fact, this situation, known as an inverted or negative yield curve, has proven a highly accurate recession predictor.

Why would long-term bonds ever pay less than short-term bonds? The nation’s central bank, the Federal Reserve — or “the Fed” for short — controls short-term rates, but the market controls the rates on longer-term securities.

The Fed can raise short-term rates, which is exactly what they started doing in March 2022, for the first time since 2018. But if investors start thinking things don’t look so good in the economy, they keep their powder dry by buying long-term bonds. The more they buy and bid up the price, the lower the rates on these securities go.

The yield curve did dip into negative territory in late March 2022. It quickly recovered, but it’s worth noting that it was the first time the yield curve turned negative since 2019 and, before that, 2006.

What to watch: You can find Treasury yields on the U.S. Treasury Department’s website. CNBC also tracks in real time the spread, or difference, between the yields on two-year and 10-year Treasurys.

Sign No. 2: The Leading Economic Index slips

Jenga game at risk of slipping
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The Conference Board’s Leading Economic Index (LEI) is one predictor of global economic health. The Conference Board, a nonprofit research group, describes the index as one of “the key elements in an early warning system to signal peaks and troughs in the global business cycle,” with the LEI specifically anticipating turning points in the business cycle.

Monthly dips in the Leading Economic Index aren’t alarming. However, year-over-year drops in the benchmark have been followed by recessions in the past.

The LEI increased by 0.3% from February to March, and by 1.9% over the six months leading up to March, so there’s no reason for concern based on this indicator right now.

What to watch: Keep an eye on Conference Board press releases or media coverage of the index.

Sign No. 3: Interest rates rise

Federal Reserve
Orhan Cam / Shutterstock.com

Government monetary policy can be another economic bellwether. We’ll explain what to watch, but first, a quick refresher on how it works.

The Federal Reserve influences the economy by using a couple of tools. One of those tools is control over short-term interest rates via the target federal funds rate. If the economy is in the doldrums, it can lower the federal funds rate to encourage consumers and businesses to borrow, buy and invest, which stimulates the economy. That’s why this rate was kept near zero for years following the Great Recession that began in December 2007.

On the other hand, if the economy is growing too fast, that can lead to rising prices, otherwise known as inflation. To cool things down, the Fed raises the federal funds rate, which serves to put the brakes on the economy by discouraging both consumers and businesses from borrowing and spending as much.

While interest rates don’t directly affect the stock market, if businesses have to pay more in interest, that hurts their profits, which will ultimately be reflected in a lower stock price.

Also, as rates rise, investors often sell stocks, driving prices lower. Why do they sell? Think about it: If you can earn high interest from insured bank accounts or guaranteed Treasury bonds, why take a chance on stocks?

Again, the Fed resumed raising the federal funds rate in March 2022, marking the first rate hike since 2018. The hike in May — a half-point — was the largest increase since 2000.

What to watch: The Federal Reserve’s Federal Open Market Committee posts statements, which include any votes to change the federal funds rate, after each of its regularly scheduled meetings. The meetings are also widely covered by the financial media.

Sign No. 4: Consumer sentiment falls

Upset shopper at a grocery store
C.Snooprock / Shutterstock.com

Another economic indicator published by the Conference Board, the Consumer Confidence Survey, monitors everything from Americans’ buying intentions and vacation plans to their expectations for inflation, stock prices and interest rates.

After an uptick in March, consumer confidence fell slightly in April. The Consumer Confidence Index was at 107.3 for the month, down from 107.6. During the recession at the beginning of the COVID-19 pandemic, the index was less than 90.

Fluctuation is normal, especially as economic conditions shift. The pandemic, the rising costs of products and the war in Ukraine can change how people feel about the economy from month to month. But if consumer confidence continues to drop, that could be a sign of a looming recession.

What to watch: The Consumer Confidence Survey is updated monthly. Track press releases for it on the Conference Board’s website. The survey is also widely covered in the media.

Sign No. 5: Business confidence cools

Upset businessman holding his head at his computer
Rido / Shutterstock.com

Like consumer confidence, business confidence can shed light on the direction of the economy.

The Conference Board’s Measure of CEO Confidence remained in positive territory — 57 — in the first quarter of 2022. (The board considers measures of more than 50 points as positive, and lower readings as negative.) But this measure marked the third consecutive quarter of decline.

CEOs’ assessment of the current general economic conditions, and their expectations for the near future, also declined.

The outlook of small-business owners isn’t any rosier, according to the National Federation of Independent Business’ Small Business Optimism Index.

In March, inflation overtook labor quality as the top problem among small businesses. In fact, the share of owners raising their average selling prices reached its highest level in the survey’s 48-year history.

Moreover, the share of owners who expect better business conditions over the next six months fell to its lowest level in the survey’s history.

What to watch: Business confidence gauges like the Measure of CEO Confidence and CFO Survey are updated quarterly. The Small Business Optimism Index is updated monthly.

Sign No. 6: Vanguard’s risk forecast worsens

Vangaurd
Casimiro PT / Shutterstock.com

Vanguard is one of the biggest asset management firms in the world, so its economic outlooks can help paint a picture of how to monitor fluctuation in the economy.

Before the recession that started in late 2007, Vanguard’s six-month forecast had said the probability of a recession in six months was greater than 40%, according to The New York Times.

The firm’s forecast for 2022 — subtitled “Striking a better balance” — was overall optimistic, if cautiously so:

“While the economic recovery is expected to continue through 2022, the easy gains in growth from rebounding activity are behind us. We expect growth in both the U.S. and the euro area to slow down to 4% in 2022.”

In March, however, Vanguard downgraded its 2022 estimated growth for the U.S. from 4% to 3.5% — which is where it remained going into May.

What to watch: Vanguard posts its monthly market perspectives on its “Our Insights” webpage and issues press releases about its annual outlooks.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

What Is Inflation (Definition) – Causes & Effects of Rate on Prices & Interest

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People have always grumbled that a dollar doesn’t go as far as it used to. But these days, that complaint is truer than ever. No matter where you go — the gas station, the grocery store, the movies — prices are higher than they were just a month or two ago.

What we’re seeing is the return of a familiar economic foe: inflation. Many Americans alive today have never seen price increases like these before. For the past three decades, inflation has never been above 4% per year. But as of March 2022, it’s at 8.5%, a level not seen since 1981.

Modest inflation, like what we had up through 2020, is normal and even healthy for an economy. But the rate of inflation we’re seeing now is neither normal nor healthy. It does more than just raise the cost of living. It can have a serious impact on the economy as a whole. 

Recent inflation-related news:


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  • In March 2022, the U.S. inflation rate hit a 40-year high of 8.5%. 
  • Prices for gasoline have increased nearly 50% over the past year.
  • Retail giant Amazon has added a 5% fuel and inflation surcharge for sellers.
  • The Federal Reserve is planning a series of interest rate hikes to cool the overheated economy.

What Is Inflation?

Inflation is more than just rising prices. Prices of specific things we buy, from a gallon of milk to a year of college tuition, rise and fall all the time. These price increases affect individual consumers’ lives, but they don’t have a big impact on the entire economy.

Inflation is a general increase in the prices of goods and services across the board. It drives up prices for everything you buy, from a haircut to a gallon of gas. Or, to put it another way, the purchasing power of every dollar in your pocket declines.

Most of the time, inflation doesn’t disrupt people’s lives too much, because prices rise for labor as well. If your household spending increases by 5% but your paycheck increases by 5% at the same time, you’re no worse off than before.

But when prices rise sharply, wages can’t always keep up. That makes it harder for consumers to make ends meet. It also drives them to change their spending behaviors in ways that often make the problem worse.


Causes of Inflation

Inflation depends on the twin forces of supply and demand. Supply is the amount of a particular good or service that’s available. Demand is the amount of that particular good or service that people want to buy. More demand drives prices up, while more supply drives them down. 

To see why, suppose you have 10 loaves of bread to sell. You have 10 buyers who want bread and are willing to pay $1 per loaf. So you can sell all 10 loaves at $1 each.

But if 10 more buyers suddenly enter the market, they will have to compete for your bread. To make sure they get some, they might be willing to pay as much as $2 per loaf. The higher demand has pushed the price up.

By contrast, if another seller shows up with 10 loaves of bread, the two of you will be competing for buyers. To sell your bread, you might have to lower the price to as little as $0.50 per loaf. The higher supply has pushed prices down.

Inflation results from demand outstripping supply. Economists often describe this as “too much money chasing too few goods.” There are several ways this kind of imbalance can happen.

Cost-Push Inflation

Cost-push inflation happens when it costs more to produce goods. To go back to the bread example, cost-push inflation might happen because a wheat shortage makes flour more expensive. It costs you more to make each loaf of bread, so you can’t afford to bake as much.

As a result, you bring only five loaves to the market. But there are still 10 customers who want to buy bread, so they must pay more to get their share. The higher cost of production drives down the supply and thus drives up the price.

In the real world, cost-push inflation can result from higher costs for anything that goes into making a product. This includes:

  • Raw Materials. The wheat that went into your bread is an example. Higher-cost wheat means higher-cost flour, which means higher-cost bread.
  • Transportation. In today’s global economy, materials and finished goods move around a lot. Transporting products requires fuel, which usually comes from oil. So whenever oil prices go up, the price of other goods rises as well. 
  • Labor. Another factor in production cost is labor. When schools closed during the COVID-19 pandemic, many parents had to stop working to care for their children. That created a worker shortage that drove prices up.

Demand-Pull Inflation

The opposite of cost-push inflation is demand-pull inflation. It occurs when consumers want to buy more than the market can supply, driving prices up.

Typically, demand-pull inflation results from economic growth. Rising wages and lower levels of unemployment put more money in people’s pockets, and people who have more money want to spend more. If the booming economy hasn’t produced enough goods and services to match this new demand, prices rise.

Other causes of demand-pull inflation include: 

  • Increased Money Supply. Another way people can end up with more money in their pockets is because the government has put more money in circulation. Governments often do this to stimulate a weak economy or to pay off past debts. But as the money supply increases, the purchasing power of each dollar shrinks. 
  • Rapid Population Growth. When the population grows rapidly, the demand for goods and services grows also. If the economy doesn’t produce more to compensate, prices rise. In Europe during the 1500s and 1600s, prices soared as the population grew so fast that agriculture couldn’t keep up with the new demand.
  • Panic Buying. Early in the COVID pandemic, consumers started buying extra groceries to fill their pantries in preparation for a lockdown. This led to shortages of many staple products, like milk and toilet paper. As a result, prices for those goods went up.
  • Pent-Up Demand. This occurs when people return to spending after a period of going without. This often happens in the wake of a recession. It also occurred as pandemic restrictions eased and people returned to enjoying movies, travel, and restaurant meals.

Built-In Inflation

When consumers expect prices to be higher in the future, they often respond by spending more now. If the purchasing power of their savings is only going to fall, it makes more sense to take that money out of the bank and use it on a major purchase, like a new car or a large appliance.

In this way, expectations of high inflation can themselves lead to inflation. This type of inflation is called built-in inflation because it builds on itself. 

When workers expect the cost of living to rise, they demand higher wages. But then they have more to spend, so they spend more, driving prices up. This, in turn, reinforces the belief that  prices will keep rising, leading to still higher wage demands. This cycle of rising wages and prices is called a wage-price spiral.


Effects of Inflation

Inflation does more than just drive up the cost of living. It changes the economy in a variety of ways — some harmful, others helpful. The effects of inflation include:

  • Higher Wages. As prices rise with inflation, wages typically rise as well. This can create a wage-price spiral that drives inflation still higher.
  • Higher Interest Rates. When the dollar is declining in value, banks often respond by raising interest rates on loans. The Federal Reserve also typically raises interest rates to cool the economy and rein in inflation, as discussed below.
  • Cheaper Debt. Inflation is good for debtors because they can pay off their debts with cheaper dollars. This is most useful for loans with a fixed interest rate, such as fixed-rate mortgages and student loans.
  • More Consumption. Inflation encourages consumers to spend money because they know it will be worth less later. All this spending keeps the economy humming, but it can also drive prices even higher.
  • Lower Savings Rates. Just as inflation encourages spending, it discourages saving. Higher interest rates can counter this effect, but they often don’t rise enough to make a difference.
  • Less Valuable Benefits. High inflation is worse for people on a fixed income. They face higher prices without higher wages to make up for them. Benefits such as Social Security change each year to adjust for inflation, but higher benefits next year don’t help when prices are rising right now.
  • More Valuable Tangible Assets. Inflation reduces the purchasing power of the dollars you have in the bank. Tangible assets like real estate, however, gain in dollar value as prices rise.

Measuring Inflation

The most common measure of inflation is the Consumer Price Index, or CPI. The Bureau of Labor Statistics (BLS) determines the CPI based on the cost of an imaginary basket of goods and services. BLS workers painstakingly check prices on all these items each month and record how each price changes.

To calculate the annual rate of inflation, the BLS looks at how much all prices in its basket have changed since a year earlier. Then it “weights” the value of each item based on how much of it people buy. The weighted average of all items becomes the CPI.

The BLS then uses the CPI to calculate the annual rate of inflation. It divides this month’s CPI by the CPI from a year ago, then multiplies the result by 100. This shows how the purchasing power of a dollar has changed over the last year. The result is reported monthly.

Other measures of inflation include:

  • Personal Consumption Expenditures Price Index (PCE). This inflation measure is published by the Bureau of Economic Analysis. Like the CPI, it’s a measure of consumer costs, but it’s adjusted to account for changes in the products people buy. The Federal Reserve uses the PCE to guide its monetary policy, as discussed below. 
  • Producer Price Index (PPI). The PPI measures inflation from the seller’s perspective, not the buyer’s. It’s calculated by dividing the price sellers currently get for a basket of goods and services by its price in a base year, then multiplying the result by 100.

Historical Examples of Inflation

A little bit of inflation is normal. But sometimes inflation spirals out of control, with prices rising more than 50% per month. This is called hyperinflation, and it can be devastating for an economy.

Hyperinflation has occurred at various times and places throughout history. During the U.S. Civil War, both sides experienced soaring inflation. Other examples include Germany in the 1920s, Greece and Hungary after World War II, Yugoslavia and Peru in the 1990s, and Venezuela today. In most cases, the main cause was the government printing money to pay for debt. 

The last time the U.S. had prolonged, high rates of inflation was in the 1970s and early 1980s. The inflation rate was nowhere near hyperinflation levels, but it spiked above 10% twice. Eventually, the Fed hiked interest rates to double-digit levels to get it under control.

Although high inflation can be destructive, zero inflation isn’t a good thing, either. At that point, an economy is at risk of the opposite problem, deflation. 

When prices and wages fall across the board, consumers spend less. Sales of products and services fall, so companies cut back staff or go out of business. As a result, jobs are lost and spending drops still more, worsening the problem. The Great Depression was an example.


The Federal Reserve, or Fed, is the U.S. central bank — or more accurately, banks. It’s a group of 12 banks spread across the country under the control of a central board of governors. Its job is to keep the economy on track, reining in inflation while trying to avoid recessions. 

The Fed maintains this balance through monetary policy, or controlling the availability of money.

Its main tool for doing this is interest rates. When the economy is weak, the Fed lowers the federal funds rate. This makes it easier for people to borrow and spend. 

When the problem is inflation, it does the opposite, raising interest rates. This makes it more costly to borrow and more worthwhile to save. As a result, consumers spend less, slowing down the wage-price spiral.

The Fed has other tools for fighting inflation as well. One option is to change reserve requirements for banks, requiring them to hold more cash. That gives them less to lend out, which in turn reduces the amount consumers and businesses have to spend.

Finally, the Fed can reduce the money supply directly. The main way it does this is to increase the interest rate paid on government bonds. That encourages more people to buy bonds, which temporarily takes their money out of circulation and puts it in the hands of the government.


Inflation Frequently Asked Questions (FAQs)

If you keep seeing stories about inflation in the news, you may have some other questions about how it works. For instance, you may wonder:

What Is Hyperinflation?

Hyperinflation is more than just high inflation. It’s a wage-price spiral gone mad, sending prices soaring out of control. As noted above, the usual definition of hyperinflation is an inflation rate of at least 50% per month — more than 12,000% per year. However, some economists use the term to refer to an inflation rate of 1,000% or more per year.

What Is Disinflation?

Disinflation is a fall in the rate of inflation. This is what the Federal Reserve and other central banks try to achieve through their monetary policy, such as raising interest rates.

Disinflation is not the same as deflation, or falling prices. During a period of disinflation, prices are continuing to rise, but the rate at which they rise is slowing down.

What Is Transitory Inflation?

When the first signs of a post-COVID-19 inflation spike appeared, Federal Reserve chair Jerome Powell described it as “transitory.” By this, he meant that the rise in prices would be short-lived and would not do permanent damage to the economy. 

However, in November 2021, Powell declared it was “time to retire that word.” Based on the growth in prices, he had concluded that inflation was more of a long-term trend. The Federal Reserve responded by planning to fight inflation harder, buying more bonds and plotting out a series of interest rate hikes.

What Is Core Inflation?

Measuring inflation can be tricky because prices for some products fluctuate more than others. Food and energy prices, in particular, can shift a lot from month to month. Including these products in the CPI can lead to sharp, but temporary, spikes or dips in the inflation rate.

To adjust for this, the CPI and PCE have a separate “core” version that doesn’t include food or energy prices. This core inflation measure is more useful for predicting long-term trends. The  main versions of the CPI and PCE, known as the “headline” versions, give a more accurate picture of how prices are changing right now.

What Is the Consumer Price Index (CPI)?

As noted above, the Consumer Price Index, or CPI, is the main measure of inflation in the United States. The BLS calculates it based on how much prices have risen for an imaginary basket of goods and services that many Americans buy.


Final Word

A little inflation in an economy is normal. It can even be a good thing, because it’s a sign that consumers are spending and businesses are earning. The Fed generally considers an annual inflation rate of 2% to be healthy.

However, higher inflation can cause serious problems for an economy. It’s bad for savers whose nest eggs, including retirement savings, shrink in value. It’s even worse for seniors and others on fixed incomes whose purchasing power has fallen. And it often requires strong measures from the central bank to correct it — measures that risk driving the economy into a recession.

If you’re concerned about the effects of inflation, there are several ways to protect yourself. You can adjust your household budget, putting more dollars into the categories where prices are rising fastest. You can stock up on household basics now, before the purchasing power of your dollars falls too much. 

Finally, you can choose investments that do well during periods of inflation. Stock-based mutual funds and real estate investment trusts are both good choices. Just be careful with inflation hedges like gold and cryptocurrency, which carry risks of their own.

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GME is so 2021. Fine art is forever. And its 5-year returns are a heck of a lot better than this week’s meme stock. Invest in something real. Invest with Masterworks.

Amy Livingston is a freelance writer who can actually answer yes to the question, “And from that you make a living?” She has written about personal finance and shopping strategies for a variety of publications, including ConsumerSearch.com, ShopSmart.com, and the Dollar Stretcher newsletter. She also maintains a personal blog, Ecofrugal Living, on ways to save money and live green at the same time.

Source: moneycrashers.com

What Is the MACD Indicator (Moving Average Convergence Divergence)?

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Traders use a wide range of technical indicators to generate trading signals when making their moves in financial markets. These indicators help traders analyze price action to determine price trends, the momentum of those trends, the best time to buy, and the best time to sell financial assets. 

The moving average convergence divergence indicator (MACD indicator) is one of the most popular tools in a trader’s toolbox. 

The tool is a momentum indicator built under the idea that momentum changes happen ahead of price changes. The idea is that traders can track and analyze the momentum of price movements to determine where the value of the asset is likely headed in the future. 


What Is the Moving Average Convergence Divergence (MACD) Indicator?

The MACD is a momentum oscillator that shows the relationship between two moving averages of a financial asset’s price. Those moving averages include the 26-day exponential moving average (EMA) and the 12-day EMA. Traders also use a signal line with this indicator which is plotted using a 9-day EMA of the MACD. Gerald Appel, founder of the Systems and Forecasts newsletter, developed the indicator in the late 1970s. 


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It’s important that you understand moving averages before going further, because they are the building blocks that form the MACD and the signals it generates. 

Moving averages reveal average prices over time. At the close of every trading session, the new closing price is added into the calculation and the oldest is removed, helping smooth the volatility of price movement in the trading chart.

The MACD uses exponential moving averages (EMAs). EMAs are time-weighted averages, meaning the newest data is given more importance than older data. This makes them more sensitive to the most recent price movements. 


What the MACD Measures

The MACD is a momentum oscillator, meaning it measures the veracity of price movements in the market. 

The concept behind the indicator is that price changes happen as a result of investor movements. When investor demand for an asset climbs, the price of that asset follows, and when demand declines, the price falls. 

Because all investors don’t make their moves at the same time, tracking the speed of price movements, or speeding and slowing of demand, indicates when reversals are likely to occur. Traders see these coming reversals as buy and sell signals. 


How to Calculate MACD

To calculate the MACD, subtract the long-term, 26-period EMA from the short-term, 12-period EMA:

MACD = 12-Day EMA – 26-Day EMA

Most charting platforms do this calculation for you and plot the results alongside an asset’s price chart.

Example Calculation

Let’s say ABC stock has a 12-Day EMA of $25.12 and a 26-Day EMA of $24.93. The moving average convergence divergence formula using the data in the example would look like this: 

MACD = $25.12 – $24.93 = $0.19 

The value of the MACD is plotted on the graph over time. Investors watch as the value increases and decreases, creating buy and sell signals. 

Signals are also created by comparing the movement of a signal line in relation to the MACD line. The signal line is calculated by taking a nine-day EMA of the MACD. 


How to Read the MACD

There are three important lines to watch when reading MACD data:

  1. MACD Line. The MACD line is plotted on the chart based on MACD values over time. When the MACD line crosses above zero, the trend is considered bullish, and the trend is bearish when the MACD line crosses below zero. 
  2. Signal Line. The signal line — the line created by taking a nine-day EMA of the MACD — is also plotted on the chart. Traders pay close attention to the relationship between the MACD line and the signal line, specifically looking for points at which the two lines cross for trading signals. 
  3. MACD Histogram. The MACD histogram is a visualization tool that helps traders measure the difference between the MACD line and the signal line. Investors read these two lines converging or diverging as buy and sell signals. 

Ways to Interpret the MACD

The MACD generates trading signals in multiple ways. Some of the most common ways to interpret the indicator include:

MACD Crossovers

MACD crossovers happen when the MACD line crosses over the signal line on a trading chart, generating signals to buy and sell the asset being analyzed. Here’s how they work:

  • Bullish Crossover. A bullish crossover happens when the MACD line crosses over the signal line. When this happens, it acts as a signal that the stock is headed for an uptrend. 
  • Bearish Crossover. A bearish crossover happens when the MACD line crosses below the signal line. When this occurs, it’s a signal that the stock price is headed for a downtrend. 

Crossovers can also happen without a signal line:

  • Bullish Crossover. When the MACD line crosses over zero, the move is considered to be bullish, signaling upward movement ahead. 
  • Bearish Crossover. When the MACD line crosses below zero, the move is considered bearish, signaling downward movement ahead. 

See the chart below for an example. The chart shows Apple’s daily stock price and the MACD over a six-month period ending April 7, 2022.

At the bottom of the image, you’ll notice a sub-chart with a red line, a black line, and a blue histogram. This section charts the MACD. The black line is the MACD line, and the red line is the signal line. 

Around November 15, 2021, a bullish crossover took place, preceding a sharp rise in Apple’s stock price. In mid-December, a bearish crossover took place, followed by significant downward movement. 

There are two more bullish crossovers and one more bearish crossover on the chart that occured in 2022. Take a moment to see if you can spot them. 

If you spotted the bullish crossovers in late January 2022 and mid-March 2022, and the bearish crossover in mid-February 2022, you’re on the right track. 

MACD Histogram

The MACD histogram is a series of bars plotted in the center of the MACD chart. The bars seem to grow above and fall below the zero line, creating easy-to-spot bullish and bearish signals. 

  • Bullish Histogram Signals. When the MACD line crosses above zero, a bar in the histogram will start a series of bars that climb above the zero line. This event indicates that momentum is moving in the upward direction and an uptrend is on the horizon. 
  • Bearish Histogram Signals. When the oscillator’s line crosses below zero, a bar in the histogram will start a series of bars that fall below the zero line. This event indicates that momentum is moving in the downward direction and signals a downtrend. 

Let’s refer again to Apple’s stock chart for an example:

You’ll notice a series of blue lines in the MACD section at the bottom of Apple’s stock chart. 

In mid-November, a series of blue bars emerged in an upward direction from the center of the chart, suggesting that prices would rise. In mid-December, the bars reversed direction, falling below the zero line, suggesting prices would decline. Following these events, Apple’s stock price did exactly what the signals suggested would happen. 

Bullish signals were also created in late January and mid-March of 2022, and another bearish signal can be spotted in mid-February 2022. Take a moment to study the chart and note how the price of Apple’s stock reacted following these events. 

MACD Divergences

Finally, MACD divergences are used to determine which direction an asset is likely to move in. A divergence takes place when the MACD doesn’t agree with the asset’s price movement. 

For example, if the asset closes the day at a higher high but the MACD moves lower, the move is known as a divergence. Here’s what divergences tell you:

  • Bullish Divergence. When a stock closes the day lower, but the MACD moves into the positive territory, this is known as a bullish divergence. The signal suggests that bearish momentum is slowing and buyers are flooding into the asset. As a result, the price of the asset should head in the upward direction. 
  • Bearish Divergence. When a stock closes the day at a new high, but the MACD moves into negative territory, it’s considered a bearish divergence. This move suggests bullish momentum is slowing and the bears are about to take control. As a result, declines are likely ahead. 

Let’s return to Apple’s stock chart to see what this looks like:

The MACD line started moving downward in mid-December. While the histogram showed bearish momentum, the price of Apple continued to move upward for a few trading sessions. As the divergence between the price of Apple and its MACD grew, a clear reversal began to emerge, leading up to dramatic declines in the price of the stock in the sessions to follow. 

Toward the end of the chart, there’s a bullish divergence, with Apple’s 50-day moving average moving downward while the histogram moved into positive territory. Can you spot it? When you do, you’ll see the stock made a strong move for the top shortly following the divergence. 


Relative Strength Index (RSI) vs. the MACD Indicator

The relative strength index (RSI) is a momentum indicator, just like the MACD. However, the two are calculated in different ways, which can lead to different results from time to time. 

The RSI is also an oscillator, but it’s centered around price gains or losses over time, focusing on extreme highs and extreme lows to determine if an asset is overbought or oversold. This differs from the MACD because it doesn’t use moving averages to determine momentum and momentum direction. 

No single momentum oscillator is perfect. Many traders use both the RSI and the MACD when making their trades, using one to verify the results of the other. 


Limitations of the MACD Indicator

The MACD indicator is an impressive tool, but like most other technical analysis tools, it’s not perfect. Some limitations to consider when taking advantage of the MACD include:

  • Failure to Signal. Although the indicator is great at showing when some reversals are likely to occur, it doesn’t catch them all. In some cases, momentum and price movements occur at just about the same time, and the MACD doesn’t have time to alert traders to the coming reversal before it’s already happened. 
  • False Positives. In some cases, momentum will shift directions for a short period and reverse quickly, while the price stays relatively flat. As a result, traders may act on a signal, and a reversal may not actually happen. 

In short, the indicator doesn’t catch all reversals, and some of the signals it does provide won’t come to fruition. 

Most indicators have their limitations, which is why it’s important for traders to have multiple tools in their toolboxes. 


Final Word

The MACD is an important piece of many successful traders’ trading strategies. The metric helps to determine when prices will rise and fall, but it isn’t perfect. Make sure you couple it with a few other technical indicators to get a full picture when making your moves in the market. 

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GME is so 2021. Fine art is forever. And its 5-year returns are a heck of a lot better than this week’s meme stock. Invest in something real. Invest with Masterworks.

Joshua Rodriguez has worked in the finance and investing industry for more than a decade. In 2012, he decided he was ready to break free from the 9 to 5 rat race. By 2013, he became his own boss and hasn’t looked back since. Today, Joshua enjoys sharing his experience and expertise with up and comers to help enrich the financial lives of the masses rather than fuel the ongoing economic divide. When he’s not writing, helping up and comers in the freelance industry, and making his own investments and wise financial decisions, Joshua enjoys spending time with his wife, son, daughter, and eight large breed dogs. See what Joshua is up to by following his Twitter or contact him through his website, CNA Finance.

Source: moneycrashers.com

Cómo crear un presupuesto de emergencia para hacer frente al COVID-19

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El COVID-19 ha producido un gran impacto en la vida de muchas personas y en las economías de todo el mundo. Debido a las empresas que pasaron a trabajar de forma remota, a los restaurantes que cerraron sus puertas y a la caída de la bolsa de valores, se frenó gran parte de la economía estadounidense y esto ha afectado a millones de ciudadanos del país. Desde que el brote de coronavirus llegó a los Estados Unidos, más de 10 millones de estadounidenses han solicitado beneficios por desempleo con la esperanza de recuperar el ingreso recientemente perdido.

Si, al igual que muchos estadounidenses, estás haciendo frente a la crisis ocasionada por el COVID-19, es probable que te preocupe tu situación financiera. Independientemente de que la pandemia haya afectado o no tu salario o estilo de vida, es importante mantener la estabilidad financiera durante estos tiempos de tanta incertidumbre. La mejor forma de evitar una emergencia financiera es preparar un presupuesto para tal fin que funcione para ti y para tu hogar.

Proteger tus finanzas en medio de una pandemia mundial puede parecer una hazaña imposible, pero con el presupuesto correcto, puedes prepararte adecuadamente para los gastos imprevistos que puedan surgir. Si usas esta guía, te ayudaremos con el proceso de crear un presupuesto de emergencia y lograr la tranquilidad que mereces durante estos tiempos sin precedentes.

¿Qué es un presupuesto de emergencia?

En esencia, un presupuesto de emergencia prioriza la supervivencia por encima de todo lo demás. Si bien es similar a tu presupuesto semanal o mensual promedio, un presupuesto de emergencia elimina todos los gastos innecesarios y solo cubre tus necesidades y responsabilidades financieras básicas.

Si se usa de forma efectiva, un presupuesto de emergencia puede proporcionar un margen financiero adicional que te permita depositar más dinero en un fondo de emergencia o, simplemente, que el dinero te dure más. En la medida que el COVID-19 ejerce presión en su bienestar financiero, muchos estadounidenses enfrentan una realidad que los obliga a reducir los costos y volver a priorizar los gastos.

Debido a la naturaleza impredecible del coronavirus, esperar lo inesperado debe ser una pieza fundamental del rompecabezas que supone planificar tu presupuesto. Por último, tu presupuesto de emergencia debe contemplar los costos necesarios para llegar a fin de mes y todos los ingresos sobrantes deberían ir a un fondo de emergencia.

Cómo crear un presupuesto de emergencia: guía paso a paso

Crear un presupuesto de emergencia es muy similar a crear tu presupuesto mensual habitual; sin embargo, en lugar de asignar fondos a gastos tales como cuotas de gimnasio o cenas en restaurantes, debes enfocarte más en cómo cubrir las necesidades básicas y dedicar el resto a asegurar tu estabilidad futura.

Toma una calculadora y ten a la mano tus presupuestos pasados para ver paso a paso cómo crear un presupuesto de emergencia.

Paso 1:  Evaluar tu presupuesto actual

Para crear un presupuesto de emergencia exitoso, primero debes entender el estado de tus finanzas antes de la pandemia. Tu presupuesto actual revelará todo lo que debes saber acerca de tus gastos actuales y adónde va tu dinero.

Haz una lista de todos tus gastos mensuales, que incluya los gastos periódicos y los variables así como las necesidades y los deseos. Para tener una imagen más clara de estos cargos, tal vez te ayude revisar tus transacciones en Mint o en tus estados de cuenta bancarios o de tu tarjeta de crédito. Suma el total de estos gastos para calcular tus gastos mensuales.

Ahora comparemos tus gastos mensuales con tu ingreso actual. Esto es fundamental si has perdido tu empleo recientemente o te han reducido el salario. Esta comparación te brindará información precisa sobre cómo tendrás que modificar tus gastos para cubrir las necesidades básicas y asignar el ingreso residual a gastos futuros o a un fondo de emergencia.

Paso 2: Dividir tus gastos

Una vez que hayas hecho una lista completa de tus gastos mensuales, divídelos en dos categorías: gastos necesarios e innecesarios. Dado que lo esencial en cuanto al estilo de vida varía según cada persona, eres tú quien debe distinguir entre tus necesidades y tus deseos. Ten en cuenta que, a cuantos más deseos puedas renunciar, más dinero tendrás para cubrir necesidades más adelante.

Para ayudarte a empezar, usa estas listas de necesidades comunes y gastos innecesarios:

Necesidades: también conocidas como gastos fijos. Incluyen todo lo que garantice que cubras tus necesidades básicas. Estos son algunos ejemplos:

  • Alimento
  • Transporte
  • Seguro
  • Alquiler o hipoteca
  • Cuidado de niños
  • Servicios públicos
  • Pago de préstamos
  • Servicio básico de telefonía e Internet

Gastos innecesarios: abarcan los costos de cosas que en realidad no necesitas y deberían ser los primeros en eliminarse o volver a evaluarse a la hora de crear tu presupuesto de emergencia. Estos son algunos ejemplos:

  • Suscripciones a servicios de entretenimiento (streaming, videojuegos, etc.)
  • Comidas en restaurantes
  • Compras
  • Pasatiempos
  • Cuota del gimnasio

Paso 3: Ajustar tu presupuesto

Si entiendes visualmente cómo se dividen tus finanzas entre necesidades y deseos, puedes tomar decisiones más inteligentes y calcular mejor tu presupuesto de emergencia. Independientemente de que estés atravesando o no dificultades financieras, es importante hacer los ajustes de presupuesto necesarios para evitar números negativos si surge una emergencia médica o se produce un cambio radical en tu vida.

Reconstruir tu presupuesto significa determinar cuáles gastos mantener o recortar y encontrar formas de reducir los gastos fijos periódicos. Vamos a analizar esto.

Decidir cuáles gastos mantener o recortar

Determinar cuáles gastos mantendrás y cuáles eliminarás queda a tu entera discreción; sin embargo, debes tener en cuenta que, cuantos más gastos innecesarios puedas recortar, mejor.

Esto puede significar cancelar tus suscripciones a servicios de streaming y la cuota de las clases de yoga a fin de tener más dinero en tu presupuesto del mes próximo para comprar artículos de almacén.

Buena parte del país tiene instrucciones de quedarse en casa, por lo cual eliminar los costos de cenar en restaurantes, las cuotas del gimnasio y los gastos de salidas nocturnas debería ser relativamente sencillo, dado que estos establecimientos ya no están abiertos al público. En virtud de este cambio, haz tu mayor esfuerzo para convertir una situación limitativa en una de crecimiento. Desempolva un viejo juego de mesa para reemplazar tus métodos de entretenimiento más costosos o prueba una nueva receta para saciar tus ganas de tener una cena fina.

La gran mayoría de nuestras necesidades probablemente estarán incluidas en tu presupuesto de emergencia ajustado y, de aquí en adelante, siempre deberían ser los gastos prioritarios de cada mes.

Reducir los gastos fijos

Una vez que hayas eliminado todos los gastos innecesarios, puedes definir mejor los detalles de tu presupuesto de emergencia. Repasa tu lista de gastos esenciales y fíjate cuáles se pueden reducir. Te asombrarás al descubrir cómo se pueden reducir muchos costos fijos para ajustarse mejor a este momento de dificultad financiera.

Aunque la mayoría no lo sabe, las empresas de servicios públicos, las compañías de cable y los proveedores de telefonía móvil estarán dispuestos a trabajar contigo para encontrar un plan más económico que les garantice que continúes siendo un cliente fiel. Negociar tus facturas de proveedores requiere de un poco de conocimiento y persistencia, pero tal vez descubras que puedes ahorrar $10 o $100 en una factura periódica con una simple llamada telefónica.

Paso 4: Explorar los beneficios disponibles

A luz de que la situación del coronavirus ha afectado a los estadounidenses, el Gobierno federal ha ampliado la ayuda que ofrece a aquellos que están en una situación más vulnerable. Desde paquetes de incentivo hasta la ampliación de los beneficios de desempleo, hay muchas medidas de asistencia disponibles y en progreso para las que puedes ser elegible.

El Servicio de Impuestos Internos de los Estados Unidos confirmó que, a partir del 30 de marzo de 2020, los contribuyentes con un ingreso bruto ajustado de $75,000 o menos son elegibles para recibir el pago de impacto económico otorgado por el Gobierno, que es de $1,200 y se paga por única vez. Las parejas casadas con un AGI de $150,000 o menos serán elegibles para recibir un cheque por $2,400 y hasta $500 más por cada hijo que califique. Siempre que hayas presentado una declaración de impuestos de 2019 o 2018, el IRS (Servicio de Impuestos Internos) calculará y enviará el pago a las personas elegibles mediante un depósito directo o un cheque por correo postal.

Los programas de ayuda por desempleo federales y estatales trabajan de forma conjunta para proporcionar asistencia financiera a aquellos que hayan perdido sus empleos sin justa causa. La  Ley de Ayuda, Alivio y Seguridad Económica en Respuesta al Coronavirus (CARES, por sus siglas en inglés), que se promulgó el 27 de marzo de 2020, otorga de forma activa beneficios de desempleo a trabajadores temporales o por proyecto, trabajadores independientes y empleados con licencias no pagadas.

El Programa de Compensación de Desempleo de Emergencia por la Pandemia (PEUC, por sus siglas en inglés) permite a los trabajadores que hayan agotado sus beneficios de compensación por desempleo recibirlos durante 13 semanas más. Este programa también otorga beneficios a trabajadores por proyecto o temporales, trabajadores freelance y contratistas independientes.

Según cuál sea tu situación en particular, es posible que seas elegible para varios programas de asistencia del Gobierno, que pueden ampliar los límites de planificación de tu presupuesto de emergencia.

Paso 5: Volver a evaluar tus objetivos financieros

Ante la posibilidad de una emergencia financiera, el objetivo más importante debe ser pagar tus facturas más esenciales. Para la mayoría, esto probablemente signifique tener que pausar cualquier otra meta para el futuro cercano y que la máxima prioridad sea llegar a fin de mes hasta que se restablezca el flujo de ingresos normal.

Los expertos en finanzas recomiendan tener un fondo de emergencia que permita afrontar los gastos de tres a doce meses a fin de protegerte de cualquier bache y proporcionar una base extra para atravesar tiempos difíciles. Al volver a evaluar tus objetivos financieros durante el COVID-19, céntrate en no alejarte de tu presupuesto de emergencia y en crear un fondo para el mismo fin.

Conclusión

En tiempos de gran incertidumbre, es esencial que mantengas tus finanzas en orden. Aunque no hay una respuesta universal en cuanto a cómo manejar una dificultad financiera, hay varias formas posibles de prepararse para ello. Si usas esta guía sobre presupuestos de emergencia, podrás tomar las medidas preventivas necesarias para asegurar que te mantengas estable y seguro durante la pandemia del COVID-19.

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Mint

Mint is passionate about helping you to achieve financial goals through education and with powerful tools, personalized insights, and much more. More from Mint

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How to Secure the Bag in 2022

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Are you living by the mantra, “New Year, new you?” Year after year, we set these resolutions and goals – for them to get tossed out before the year can fully bloom. Looking for ways to elevate your life? Maintain the things you’ve started? Produce real results? Check out the tips below to secure your future and your bag in the year to come.

Write down your goals

As much as we’d like to consider ourselves computers, it’s nearly impossible for us to remember every single thing we’d like to do. In order to stay focused and remain organized, it’s best to simply jot down your goals.

Try your best not to overthink and begin to write everything that comes to your head. Essentially, this is a brain dumping exercise that allows you to clear your mind as much as possible. Often times confusion doesn’t necessarily come from us not knowing, it’s simply because we haven’t written down our thoughts.

Once this is finished, the second step is refining. Go through everything you’ve listed and organize it into categories. From there you’ll be able to highlight the top 3-5 goals you’d like to accomplish. This allows you to only focus on the goals with priority – and as those items are completed, the next ones in line will be yours for the conquering!

Are you wanting to start a new career or business venture? Write down all of the to-do items needed to accomplish that goal and assign a certain number of tasks per day, week or month. In this way you’re not overwhelming yourself with unrealistic expectations but creating an actionable guide that navigates you straight to the finish line.

Self-assess and readjust as needed

Let’s take a moment to reflect on 2021. What are the things you did exceptionally well? What are a few items that need improvement? Are you able to recall the goals that didn’t have any traction at all?

Before you can execute, you need to know where you’re currently starting from. Be honest with yourself – this isn’t an exercise to stir up negative and non-productive emotion. This is to chart your next steps and make them effective.

If you overspent this year on discretionary items, test out the cash method for your purchases. Looking to increase your earning potential? Update your resume, network and explore the opportunities that interest you. Saving for a large purchase? Create a reasonable savings plan that lays out the steps to ensure you’re successful.

Keep in mind this is not a one-day exercise. Carve out some time over the course of a week to truly reflect.

Avoid impulsive behavior and identify the root cause

Each and every one of us have thorns in our side that derail us from our goals – big or small. In order to identify the true problem, we must tap into our self-awareness and discuss some ugly truths. For example, if you are on a fitness journey and have a desire to become healthier– a routine is mandatory. Schedules allow us to operate more efficiently. So, let’s say you want to workout at least three times a week. This means there’s a certain window of time that needs to be allotted for the actual workout. After that you need time to eat, prepare food and continue flowing through the day. If one of these links are missing in the routine, it could tempt you to skip the workout completely.

What needs to happen? Have food readily available on the days you workout. Get sufficient rest the night before to make sure you’re energized to conquer the day. Try your best to eat the right foods to avoid feelings of sluggishness or irritation. Have your exercise clothes ready the night prior to avoid any mishaps in the morning. No matter how crazy and insane these little things may seem they’re very impactful. It creates a smoother workflow which decreases anxiety, worry, frustration and irrational decision making.

Let’s talk money!

If you have an issue with overspending; consider this. Do you spend more money when your emotions fluctuate?  Adopt some self-care techniques to relax and unwind before making hash decisions. Try adopting yoga within your weekly routine. Step away from the computer when the feeling of work stress occurs. Swap out the impulse to spend with something positive, like taking a quick walk or simply log off social media. Unsubscribe from retail emails so there won’t even be an urge to spend. When you’re healthy mentally and physically – your finances have no choice but to positively benefit.

Let’s talk retirement

Before the year is up evaluate your retirement account, savings methods and/or investments. Are your selections aligning with the financial goals you’ve set for the upcoming year? Assess your contributions and adjust as you see fit. If there are things you’re unclear on or are in need of further guidance, solicit the assistance of a financial advisor. Don’t allow yourself to get hung up as challenges arise! There’s always a solution. Take a deep breath and revisit your goals in moments of frustration.

Create an accountability tribe

We cannot live life alone and in confinement, so what better way to engage the people closest to you than create an accountability tribe? Establish some safe meetups or virtual check-ins as schedules permit to discuss hiccups, successes and lessons. In this way, it establishes a sense of community and support. It’s almost like having your own personal cheerleaders ushering you through all phases of life. You can gain multiple perspectives while also having a safe space that doesn’t judge you for your mistakes.

Remain positive and stay the course

In this upcoming year, don’t settle for less. The key to achieving all of your goals fall into two main categories: consistency and discipline. Will the work always be easy? Absolutely not. Your goals will stretch you in new ways and will create a new level of resilience.

2022 is ours for the taking. You have the tools; now do the work and secure the life you truly desire to live!

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Marsha Barnes

Marsha Barnes is a finance guru with over 20 years of experience dedicates her efforts to empower women worldwide to become financially thriving. Financial competency and literacy are a passion of Marsha’s, providing practical information for clients increasing their overall confidence in their personal finances. More from Marsha Barnes

Source: mint.intuit.com

Calculadora de presupuesto

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Nuestra calculadora de presupuesto gratis puede ayudarte a obtener una idea más completa de tus finanzas mensuales, darte información sobre dónde se concentran tus gastos (y dónde podrías querer reducirlos).

Ingresa la información que se te pide en los campos correspondientes y, automáticamente, calcularemos tus ingresos, gastos y ahorros mensuales totales de modo que puedas determinar si estás gastando de más o de menos según tu presupuesto.

Comienza a trabajar con nuestra calculadora o haz clic en un paso a continuación para saltar a instrucciones más detalladas:

Paso 1: Ingresa todas las fuentes de ingresos mensuales

Paso 2: Ingresa todos los gastos mensuales

Paso 3: Ingresa todas las contribuciones para ahorros mensuales

Cómo se usa la calculadora de presupuesto gratis

Nuestra calculadora de presupuesto es muy fácil de usar. Completa la información que se te pide en cada campo y nosotros nos ocuparemos de los cálculos.

Nuestra calculadora de presupuesto gratis se divide en tres áreas principales: ingresos, gastos y ahorros mensuales.

Nota: Si ingresas costos variables que cambian de un mes a otro, ingresa tu estimación más aproximada.

Paso 1. Ingresa todas las fuentes de ingresos mensuales

Esta sección de la calculadora de presupuesto cubre todo el dinero que te ingresa e incluye tu fuente principal de ingresos y todas las fuentes de flujo de efectivo complementarias.

  • Sueldos y salarios (después de impuestos): tus ingresos mensuales netos son el dinero que te queda después Es la cantidad que figura en tu cheque salarial. Es decir, tus salarios menos impuestos federales, Seguro Social, Medicare, costos de seguro, contribuciones para la jubilación y cualquier otro beneficio.
  • Otros: asegúrate de considerar también fuentes de ingresos complementarias, como pagos por trabajos freelance, pagos de pensión para el cónyuge divorciado, retiros de inversiones o sustento financiero para hijos, e ingresa el valor en la celda de la derecha.

Paso 2. Ingresa todos los gastos mensuales

Ahora, veamos tus gastos mensuales promedio, lo que incluye tanto costos fijos como variables.

  • Vivienda: ingresa tus pagos mensuales totales de alquiler o hipoteca; eso incluye facturas de servicios públicos como gas, electricidad, recolección de basura y agua. Si pagas seguro de inquilino, también incluye ese costo aquí.
  • Comida: considera las facturas de tiendas de comestibles o suscripciones a servicios de comida. Si sueles ir a comer afuera, estima esos gastos e inclúyelos.
  • Transporte: ingresa tus costos mensuales totales correspondientes al transporte diario. Si conduces un auto, incluye pagos de automóvil, costos de seguro y gastos de gasolina. Si viajas en transporte público, incluye precios de boletos o suscripciones a pases.
  • Tarjetas de crédito y préstamos: asegúrate de considerar todos los pagos mínimos de tarjetas de crédito y de préstamos. Si sueles pagar más que el mínimo, asegúrate de incluir la cantidad total estimada.
  • Seguro médico: ingresa los costos de seguro médico si no recibes la cobertura a través de tu empleador, lo que incluye planes médicos, odontológicos y oftalmológicos.
  • Mascotas: si tienes un amigo peludo, completa este campo con los gastos mensuales de comida y las facturas de medicamentos, aseo o veterinaria.
  • Entretenimiento: en esta categoría, se incluye la cantidad que sueles gastar por mes en actividades de entretenimiento en casa, como televisión y suscripciones a Internet, y fuera del hogar, como boletos para conciertos, boletos para el cine o eventos sociales.
  • Cuidado personal: puede incluir elementos como champú, pasta dental, cosméticos y otros artículos básicos para el cuidado personal.
  • Cuidado de hijos menores: ingresa todos los gastos que hiciste para el cuidado de hijos menores; eso incluye costos de guardería, cuotas escolares y costos de cuidado de niños.
  • Otros: en este espacio, incluye los gastos periódicos que no entran en ninguna de las categorías anteriores. Como ejemplo, podemos mencionar viáticos para un viaje próximo, compras de prendas de vestir y otros artículos “no esenciales”.

Paso 3. Ingresa todas las contribuciones para ahorros mensuales

Esta sección aborda la planificación de tu futuro financiero, desde ahorros para emergencias hasta contribuciones para la jubilación.

  • Fondo de emergencia: una cuenta de ahorro para emergencias es dinero que ahorras para cubrir imprevistos financieros que te pueda deparar la vida. Los expertos en finanzas recomiendan ahorrar al menos 3 meses de gastos básicos. Ingresa aquí las contribuciones mensuales que haces a tu fondo de ahorro para emergencias.
  • Inversiones: si haces contribuciones a cuentas de inversión, inclúyelas aquí.
  • Jubilación: si haces contribuciones a una cuenta de jubilación fuera de un plan 401(k) de tu lugar de trabajo, inclúyelas también.
  • Otros: incluye cualquier otro tipo de contribuciones para ahorros que hagas mensualmente.

A medida que vayas ingresando tu información, nuestra calculadora de presupuesto irá actualizando automáticamente tus ingresos, gastos y contribuciones totales para ahorros mensuales, y te mostrará cuánto dinero gastas de más (o cuánto margen es posible que tengas en tu presupuesto).

Visualiza tus finanzas con este presupuesto mensual detallado y aprovecha al máximo tu dinero con nuestro planificador y nuestra calculadora de presupuesto gratis.

Calculadora de presupuesto: preguntas frecuentes

Un presupuesto detallado puede ayudarte a aprovechar al máximo tus ingresos y conducirte al éxito en el futuro. ¿Tienes más preguntas sobre cómo armar un presupuesto? Consulta nuestras respuestas a las preguntas frecuentes sobre presupuestos que se incluyen a continuación:

1. ¿Cuáles son las técnicas habituales de elaboración de presupuestos?

Existen muchos métodos de elaboración de presupuestos que puedes usar para mantener encaminadas tus finanzas. Solo es cuestión de averiguar cuál es el correcto para ti. Las técnicas habituales de elaboración de presupuestos incluyen:

  • El sistema de sobres: es una técnica simple, pero efectiva. Suma todos los gastos fijos y variables y, luego, resta esa cantidad de tus ingresos. Coloca cada gasto en un sobre rotulado; cuando recibas un cheque salarial, coloca la cantidad de efectivo correspondiente en cada sobre.
  • Presupuesto invertido: esta técnica invierte totalmente el presupuesto habitual; en lugar de establecer categorías para dar seguimiento a los gastos, creas objetivos de ahorro agresivos y contribuyes a ellos cada mes.
  • Presupuesto de base cero: con este método, debes asignar todos tus ingresos mensuales a gastos, contribuciones para ahorros y pagos de deuda. A fin de mes, tus ingresos menos los gastos deben dar cero.
  • La regla de 50/30/20: con esta técnica de elaboración de presupuestos, que es una de las más populares, los costos se dividen en tres categorías diferentes. Obtén más información sobre este método a continuación.

Desarrollada por Elizabeth Warren y su hija, Amelia Warren Tyagi, la regla “50/30/20” es uno de los métodos más populares de elaboración de presupuestos. Puedes usar la calculadora de presupuesto 50 30 20 como ayuda para dividir los ingresos netos en 3 categorías:

  • 50% para necesidades: la mitad de tus ingresos mensuales netos debe asignarse a elementos esenciales de la vida. Eso incluye necesidades como vivienda, comida, transporte, seguro y servicios públicos.
  • 30% para deseos: los elementos incluidos en esta categoría pueden variar, pero podemos mencionar compras de prendas de vestir, entretenimiento, salidas a comer, viajes o suscripciones mensuales.
  • 20% para ahorros y pagos de deudas: este dinero pretende ahorrarse para uso futuro. Según tu situación financiera, puedes optar por dedicar esta cantidad de dinero al pago de saldos de deuda, contribuciones para la jubilación o fondos de emergencia.

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Mint

Mint is passionate about helping you to achieve financial goals through education and with powerful tools, personalized insights, and much more. More from Mint

Source: mint.intuit.com

How to Check Credit Score: A Comprehensive Guide

How to Check Credit Score: A Comprehensive Guide – MintLife Blog

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overall financial health. Learn how to check your credit score.

Checking your credit score isn’t as challenging as it may seem, and once you know how the process becomes faster and easier each time. Several methods are available for checking your credit. Review the options below to determine which one makes the most sense for you.

Step 1: Check Your Credit Card or Loan Statement

When you apply for a credit card or loan, the lender pulls your credit information to determine if they’ll approve you. These entities will provide you with your credit score or you can ask them to send you a copy. Receiving your credit score from an entity you’re already working with can save you time and money. But if you’re not planning to apply for a credit card, loan, or other new line of credit in the near future, it may be best to choose a different method for checking your credit score.

Step 2: Use a Free Service

A range of services are available that all you to check your credit score for free. No matter which service you choose to use, follow the steps listed on the website to receive your free credit score. Be sure to read the fine print before entering your credit card or payment information.

Step 3: Purchase Your Scores

In addition to the free services, you can also receive your scores through one of the three major credit bureaus (Experian, Equifax or TransUnion) or an outside entity. The cost typically ranges from $10 to $20 per credit check. Some people choose this option because they like what a particular report offers or because a free method isn’t currently available to them. Many free services offer a variety of valuable information, so do your research before determining which option is best for you!

Step 4: Go see a Nonprofit Credit Counselor

Nonprofit credit counselors are available to help people improve their financial standing. Whether you want to save more, eliminate debt or create a budget, nonprofit credit counselors can provide guidance. Depending on the counselor, your credit score check might be free or cost a small amount. In addition to receiving your score, a credit counselor can help you understand what your score means and how you can improve it.

What to Know When You Check Your Credit Score

While a credit score may seem straightforward, there are some nuances to be aware of. By understanding key information about what your number means, you’ll get the most out of your credit score check.

There Are Many Different Credit Scores and Credit Score Ranges

Not all credit bureaus and credit reporting entities utilize the same scoring system. For example, there are several websites and apps like Turbo that provide a free score and tools like a free personal loan calculator. The scoring model used may be slightly different than another bank, lender or credit bureau. If you were to check your credit score through a couple of different entities, you’re likely to receive somewhat differing numbers.

In addition, each entity may categorize their credit score ranges differently. One organization might define good credit as anything above 700, while another entity might say that anything above 680 is good. Keep this in mind as you review your score and compare it with the guidelines of the financial product or service you’re considering.

There’s No Need to Limit How Often You Check Your Credit Score

Checking your own credit is considered a soft inquiry, not a hard inquiry. Soft inquiries don’t impact your credit score, so checking your score often won’t cause it to lower.

You’ll also want to review your credit report periodically, which lists your payment history, open lines of credit and any outstanding debt. By reviewing your report, you’ll be able to identify cases of fraud or outstanding credit you’ve forgotten about.

Pay Attention to Your Range, Not Your Exact Number

Your credit score can fluctuate and can even differ based on which entity calculates your score. That’s why it’s more important to focus on the range your score falls in, rather than your exact number. All credit scores fall somewhere between 300-850. Generally speaking, between 720-780 is considered a “good” score and an “excellent” score is 781 and beyond.

You can learn more about credit score ranges here.

You Can Take Steps to Improve Your Score

If your credit score is not where you’d like it to be, there are plenty of methods for raising it. Although any method to improve your credit score will take time, a higher score increases your eligibility for financial products, loans, and credit card offers.

Clean up your credit report: Review your credit report and identify whether you need to change your financial behavior in any way. While you can’t remove negative items from your report, they typically will age off after seven years. Make sure to also look for false items on your credit history, such as an unpaid bill.

Be timely with your payments: Whether it’s a utility bill or credit card payment, be sure to consistently pay on time.

Pay off your debt: While you do need to have some debt to show that you can pay it off responsibly, you don’t want to rack up large credit card balances or lease a new car every year. In other words, your balance shouldn’t become a high percentage of your overall credit line. To accomplish this, continue to pay off your outstanding debt and avoid unnecessarily large purchases.

Limit how many new lines of credit you open: A lender may consider how many new lines of credit you’ve recently applied for, which could negatively impact your score.

Maintain long-term accounts: A solid track record of paying off your credit on-time will show a potential lender that you are reliable. Try to keep a couple of accounts open, active, and paid over time to demonstrate a strong credit history.

Most negative information ages off after about 7 years

While a late payment or unpaid bill stays on your report for a while, credit reporting doesn’t occur for longer than seven years from when the original debt was charged off. Exceptions to this rule include defaulted student loans and bankruptcy.

It’s Important to Check Your Credit Score

Understanding and monitoring your credit score allows you to be in tune with your financial standing and make adjustments as needed. Checking your credit score periodically offers a few important benefits. Get your absolutely free credit score from Turbo – it’s quick and easy!

Understand Your Financial Standing

Your credit score is one indicator of your overall financial health. It provides information about your credit experiences and your history of paying bills, in addition to any outstanding debt you may have. By checking your credit score, you get a glimpse where you currently stand financially. Your credit score can almost always be improved (unless you’re one of the lucky few with perfect credit), so knowing your score gives you key insight into whether or not you should prioritize giving your score a boost.

Several companies consider your credit score along with your other financial indicators, like your income and debt-to-income ratio, when approving you for a loan or service. Your credit score provides indication of how likely you are to repay the loan amount on time.

Ensure You Can Get the Best Terms

When lenders pull your credit score and credit report, they receive your history of paying bills, how long you’ve had certain accounts, and if debt collection has ever been utilized. Based primarily on these factors, they will then make a determination of the terms they will offer you. Typically, the better your credit score, the lower fees or rates you’ll receive.

If your score isn’t where you’d like it to be, you can take time to work on your score before following through with a lender. You might improve your credit score by doing things like paying off  your current debt and being timely with all of your payments.

Determine Eligibility for Financial Products

Some lenders and financial vendors provide guidelines as to what they’re looking for from a potential borrower. For example, a credit card company might require a score of 720 or above to be approved, or a mortgage company may require a credit score within a particular range to lock in a certain interest rate. By knowing your score, you’ll have better understanding of which financial products and terms you might be eligible for.

Alert Yourself of Potential Fraudulent Activity

Pulling your credit score won’t give you direct information regarding fraudulent activity, but it could be a clue that fraudulent activity has occurred. If you think your credit score is suspicious, be sure to pull your credit report or sign up for credit monitoring.

Knowing how to check your credit score gives you instant access to your financial standing and helps you better understand what improvements you might like to make to your private life. Regularly checking your credit score and identifying areas for improvement is key to maintaining a strong financial life. To get started, get your free credit score and spend some time assessing your financial goals.

Turbo