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    You may be facing a Dec. 31 use-it-or-lose-it deadline with your flexible spending account. Here’s what you need to know

    If you have a flexible spending account, you may be running up against a Dec. 31 deadline to use your 2023 funds.
    Experts say it’s a good time to assess your FSA’s rules and make a plan to make the most of any unused money you have set aside toward medical expenses.

    Tom Werner | Digitalvision | Getty Images

    As the calendar turns to a new year, you may be at risk for losing money if you have a flexible spending account.
    Many FSA owners have a Dec. 31 use-it-or-lose-it deadline to use the funds they have set aside for the year.

    The average forfeit of funds last year from an FSA was $300, according to Rachel Rouleau, chief compliance officer at FSA Store. Of course, some account holders lost even higher sums.
    Flexible spending accounts are accounts that may be provided alongside an employer health plan and used to pay for eligible out-of-pocket medical costs. The money contributed to an FSA is not subject to federal income taxes.
    In 2024, employees are able to put up to $3,200 in an FSA, up from $3,050 in 2023.

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    Even for those account holders who may have had to forfeit several hundred dollars at the end of last year, the tax advantages still make the accounts worthwhile, according to Rouleau.
    For example, if you set aside $2,000 in your FSA and save 30% on taxes, that amounts to $600.

    “Even if you lose $300, you still made the right decision,” Rouleau said.
    Ideally, every dollar set aside in an FSA should be used toward eligible health-care expenses.
    The good news is “there are thousands of ways for people to avoid losing those pre-tax dollars,” Rouleau said.
    If you’re unsure where to start, these three tips can help.

    1.  Find out the rules for your unused FSA balance.

    Your employer may not necessarily require you to use all of your FSA funds by Dec. 31.
    “It’s important for the employee, if they have an FSA, and they’re running up against the deadline to know, do they have to use it before the deadline runs out?” said Lawrence Sprung, a certified financial planner and founder of Mitlin Financial in Hauppauge, New York.
    You may have the option to carry over unused funds into the next year. Up to $610 may be carried over into 2024, per IRS rules. Funds above that amount may be lost.
    Alternatively, your FSA plan may offer a grace period until March 15 to spend down your 2023 FSA funds.
    Or you may have a runout period, or several months after the end of the last plan year to submit receipts for qualified expenses that were incurred in 2023.
    To find out the specific rules that apply to your account, you may contact your FSA administrator, which typically lists their contact information on an FSA debit card. Your human resources department may also be able to provide that information.

    2. Create a strategy to use your balance.

    Though time may be running out, there are still plenty of ways to use your FSA money before the Dec. 31 deadline.
    If you have a bigger balance, you may want to pursue bigger ticket items like eye exams, glasses and contact lenses or dental work, suggested Sprung, who is also the author of the book “Financial Planning Made Personal.”
    It’s also a good time to pay for any outstanding medical bills that were incurred during the year, Rouleau noted.

    The funds can also be used for routine care items such as over-the-counter medicines like pain relievers or allergy medicines, as well as sunscreen, acne care and other routine care products, she noted.
    Purchases made on FSA Store’s website up until midnight on Dec. 31 may qualify toward your 2023 balance.

    3. Start planning for next year’s FSA funds.

    When working with families to plan for FSA spending, “the first year is the hardest,” Sprung said.
    If you have not been keeping track of your out-of-pocket medical expenses, it can be tough to gauge, he said.
    Sprung typically advises families to estimate how much they may spend, and perhaps cut that total back a bit.
    In following years, once you have FSA receipts or card transactions, that may make it easier to estimate how much money you and your family may need, Sprung said.
    If you’re carrying an FSA balance into 2024, it may be a sign you may want to contribute less when it comes time to elect your deferrals next year, he said.
    “[If] you think that next year is going to be a similar year, then you certainly want to use that as a gauge and start cutting back,” Sprung said.
    Keep in mind that life changes, such as the birth of children or a divorce, may also affect how much you need to set aside in your FSA, he said.
    Importantly, flexible spending accounts are fully funded on the first day of the plan year. As such, you may plan to start using next year’s funds earlier to avoid running up against next year’s December deadline.
    Keep in mind that if you leave your job at any point during the year, either voluntarily or involuntarily, you may lose access to your balance, unless you are allowed COBRA continuation for your FSA, Sprung noted. However, you may still have 60 to 90 days to submit receipts. More

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    It’s a ‘massive student debt strike’ activist says, as millions of borrowers still aren’t making payments

    Just 60% of student loan borrowers made a payment when the bills resumed in October.
    “This is, in essence, a massive student debt strike,” one activist said.

    Student loan forgiveness advocates rally outside the U.S. Supreme Court building in Washington, D.C., after the nation’s high court struck down President Joe Biden’s student debt relief program, June 30, 2023.
    Kent Nishimura | Los Angeles Times | Getty Images

    Nearly a year before federal student loan payments restarted, the U.S. Department of Education warned that many borrowers could struggle to pay their bills again.
    “Unless the [Education] Department is allowed to provide debt relief, we anticipate there could be an historically large increase in the amount of federal student loan delinquency and defaults as a result of the COVID-19 pandemic,” Education Department Undersecretary James Kvaal said in a court filing.

    The Supreme Court in June blocked President Joe Biden’s plan to cancel up to $20,000 in student debt per borrower — and those warnings are now becoming real. To that point: just 60% of people with federal education loans, with payments due in October, paid their bill by mid-November, U.S. Department of Education data published this month shows.
    Outstanding student loan debt in the U.S. now exceeds $1.7 trillion, burdening Americans more than credit card or auto loan debt.
    The average loan balance at graduation has tripled since the 1990s to $30,000 from $10,000. Additionally, some 7% of student loan borrowers are now more than $100,000 in debt.
    Here’s what experts have to say about the new findings.

    ‘A massive student debt strike’

    The fact that up to 40% of borrowers didn’t make a payment “reflects exactly what we’ve been warning would happen should Biden turn the debt collection apparatus back on,” said Astra Taylor, co-founder of the Debt Collective, a union for debtors.

    “Faced with the impossible choice of feeding their kids, keeping a roof over their head or throwing an average of $400 a month into the Department of Education incinerator, borrowers are rightly choosing to keep themselves and their families financially afloat,” Taylor said.

    Astra Taylor
    Courtesy: Astra Taylor

    “This is, in essence, a massive student debt strike,” she added.
    The Debt Collective has recently created a petition in which borrowers can write to the U.S. Department of Education and request that it cancel their student debt. So far, more than 35,000 people have done so, the organization says.

    ‘Unfortunately unsurprising’

    The repayment problems for borrowers are “unfortunately unsurprising,” said Persis Yu, deputy executive director at the Student Borrower Protection Center.
    “Neither borrowers nor the student loan system were prepared to resume repayment,” Yu said.
    Even before the pandemic, when the U.S. economy was in one of its healthiest periods in history, nearly half of student loan borrowers were behind on their payments or enrolled in relief measures for those struggling, including deferments or forbearances, according to an analysis by higher education expert Mark Kantrowitz.
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    Meanwhile, Yu said, “servicers are overwhelmed and are failing to help struggling borrowers navigate the options that are available to them.”
    Indeed, many borrowers describe challenges trying to get current on their student loans, with long wait times trying to reach their servicers, errors with their bills, lost account information and confusion over new options rolled out over the past three years.
    Carolina Rodriguez, director of the Education Debt Consumer Assistance Program, a nonprofit in New York, said she’s never seen this kind of chaos in the student loan space before.
    “Servicers are having a very hard time getting people back into repayment,” Rodriguez said.
    Yu pointed out that Biden’s plan to cancel student debt was designed to alleviate borrower hardship, and she blamed the legal challenges to the president’s relief and the Supreme Court’s decision for the current situation.
    “What we see happening is the natural consequence of the right wing’s effort to kill debt relief,” Yu said.

    ‘Borrowers just not realizing payments have come due’

    Meanwhile, other financial experts say the transition back to repayment after more than three years was bound to be difficult.
    “I attribute some of it to some borrowers just not realizing payments have come due,” said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit.
    Meanwhile, others may be taking advantage of the Biden administration’s 12-month “on-ramp” to repayment, during which they’re shielded from the worst consequences of falling behind, experts say.

    But Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers, said he is worried that some student loan holders were confusing that relief for another extension of the payment pause. (The stay on bills was extended eight times.)
    “There is a fundamental difference here,” Buchanan said. “Interest is accruing now.”
    Throughout the payment pause, which went into effect in March 2020, the interest rates on most federal student loans were set to zero. But interest began accruing again on Sept. 1.
    As a result, borrowers who don’t make payments now will see their balances grow.
    Still, Buchanan said he also wasn’t surprised by the large share of borrowers who haven’t made a payment yet. He said it was usually a trying process to get people back into repayment after long breaks from their bills.
    “It will likely be early 2024 before things normalize,” Buchanan said.
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    A 10-year initiative in Boston has helped narrow the gender wage gap by 30%

    Your Money

    A 10-year initiative in Boston has helped narrow the gender wage gap by 30%.
    Across the country, the difference between the earnings of men and women has remained stubbornly consistent.
    Despite recent progress in Boston, the model may be hard to replicate in other cities.

    Tomasz Szulczewski | Moment | Getty Images

    Women continue to make great strides in the workforce, achieving increasing levels of education, and advancing into senior leadership positions. However, the gender pay gap — the difference between the earnings of men and women — has barely budged in recent years.
    In the U.S., women who work full time are typically paid about 80 cents for every dollar paid to their male counterparts, nearly the same disparity that existed two decades earlier.

    There is no single explanation for why progress toward narrowing the pay gap has stalled, according to a recent report by the Pew Research Center, although women are still more likely to pursue careers in lower-paying industries and take time out of the labor force or reduce the number of hours worked because of caretaking responsibilities — often referred to as the “motherhood penalty.” Systemic bias has also played a role.
    In Boston, however, change is happening despite those headwinds.
    New research shows the gender wage gap decreased by 30% over the last two years, according to the Boston Women’s Workforce Council, which was formed a decade ago in partnership with the Boston mayor’s office to address this challenge.
    To be sure, in Boston, women still only earn 79 cents for every dollar a man earns. However, that marks a 9-cent improvement from the gap reported by the organization in 2021.

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    “This is the first time we’ve seen a real decrease,” said Kimberly Borman, executive director of the Boston Women’s Workforce Council.

    Two factors have helped move the needle, according to the council: Salaries for women overall rose 6% between 2021 and 2023, and more women advanced into higher-paying senior positions.
    The council’s annual report also found that the racial/ethnic wage gap did not improve over the same time period. Women of color remain overrepresented in lower-paying industries and positions and rigid workplace practices don’t accommodate for the needs of working parents, the report found, in addition to persistent bias in hiring and promotion practices.

    Equal pay for equal work

    The council recruits companies in Boston to sign the 100% Talent Compact, a pledge to work toward fixing wage and advancement inequities and a commitment to share their payroll data. More than 250 employers have joined the initiative.
    The idea is that pay transparency will bring about pay equity, or essentially equal compensation for work of equal or comparable value, regardless of worker gender, race or other demographic category.

    Other cities have reached out in the hope of achieving similar success, but the model may be hard to replicate, Borman said. In Boston, major employers such as MassMutual and Mass General were early co-signers.
    “There’s a general feeling among CEOs that this is something that has to be paid attention to,” Borman said.
    Those companies have also worked closely with the mayor, she added, noting that “the public and private partnership has helped.”

    Equal opportunities for advancement

    Going forward, having more women in the C-suite is key to further progress. “There’s a wage gap but there’s also something called a power gap,” Borman said.
    Even in a city in which slightly more than half of all professional employees are women, women are often prevented from getting the same opportunities to advance, according to a separate Women in the Workplace study from Lean In and McKinsey.
    “We need employers to continue their efforts to address the power gap by advancing women into positions of power, and therefore higher pay, at the same rate as men,” Borman said.
    That’s where progress often falls short, the Lean In report found.
    “The ‘broken rung’ is the biggest barrier to women’s advancement,” Rachel Thomas, Lean In’s co-founder and CEO, recently told CNBC.
    “Companies are effectively leaving women behind from the very beginning of their careers, and women can never catch up,” Thomas said.
    Ultimately, that is the biggest obstacle to success. Even moving “closer to equity isn’t enough,” Borman said. “We are working towards complete elimination but it’s going to take promoting women into higher-paying jobs.” More

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    The U.S. avoided a recession in 2023. What’s the outlook for 2024? Here’s what experts are predicting

    The U.S. economy avoided the recession forecast for 2023.
    Experts now say a soft landing or mild recession is possible in 2024.
    These tips can help investors prepare for the unexpected.

    Grocery items are offered for sale at a supermarket on August 09, 2023 in Chicago, Illinois. 
    Scott Olson | Getty Images

    Heading into 2023, the predictions were nearly unanimous: a recession was coming.
    As the year comes to a close, the forecasted economic downturn did not arrive.

    So what’s in store for 2024?
    An economic decline may still be in the forecast, experts say.
    The prediction is based on the same factors that prompted economists to call for a downturn in 2023. As inflation has run hot, the Federal Reserve has raised interest rates.
    Typically, that dynamic has triggered a recession, defined as two consecutive quarters of negative gross domestic product growth.
    Some forecasts are optimistic that can still be avoided in 2024. Bank of America is predicting a soft landing rather than a recession, despite downside risks.

    More than three-fourths of economists — 76% — said they believe the chances of a recession in the next 12 months is 50% or less, according to a December survey from the National Association for Business Economics.

    “Our base case is that we have a mild recession,” said Larry Adam, chief investment officer at Raymond James.
    That downturn, which may be “the mildest in history,” may begin in the second quarter, the firm predicts.
    Of the NABE economists who also see a downturn in the forecast, 40% say it will start in the first quarter, while 34% suggest the second quarter.
    Americans who have struggled with high prices amid rising inflation may feel a downturn is already here.
    To that point, 56% of people recently surveyed by MassMutual said the economy is already in a recession.
    Layoffs, which made headlines at the end of 2023, may continue in the new year. While 29% of companies shed workers in 2023, 21% of companies expect they may have layoffs in 2024, according to Challenger, Gray & Christmas, an outplacement and business and executive coaching firm.
    To prepare for the unexpected, experts say taking these three steps can help.

    1. Reduce your debt balances

    More than one third — 34% — of consumers went into debt this holiday season, down from 35% in 2022, according to LendingTree.
    The average balance those shoppers are taking away is $1,028, well below last year’s $1,549 and the lowest since 2017.
    But higher interest rates mean those debts are more expensive. One-third of holiday borrowers have interest rates of 20% or higher, LendingTree reports.
    Meanwhile, credit card balances topped a record $1 trillion this year.
    Certain moves can help control how much you pay on those debts.
    First, LendingTree recommends automating your monthly payments to avoid penalties for late payments, including fees and rate increases.
    If you have outstanding credit card balances that you’re carrying from month to month, try to lower the costs you’re paying on that debt, either through a 0% balance transfer offer or a personal loan. Alternatively, you may try simply asking your current credit card company for a lower interest rate.
    Importantly, pick a debt pay down strategy and stick to it.

    2. Stress-test your finances

    Much of how a recession may affect you comes down to whether you still have a job, Barry Glassman, a certified financial planner and founder and president of Glassman Wealth Services, told CNBC.com earlier this year. Glassman is also a member of CNBC’s Financial Advisor Council.
    An economic downturn may also create a situation where even those who are still employed earn less, he noted.
    Consequently, it’s a good idea to evaluate how well you could handle an income drop. Consider how long, if you were to lose your job, you could keep up with bills, based on savings and other resources available to you, he explained.
    “Stress-test your income against your ongoing obligations,” Glassman said. “Make sure you have some sort of safety net.”

    3. Boost emergency savings

    Even having just a little more cash set aside can help ensure an unforeseen event like a car repair or unexpected bill does not sink your budget.
    Yet surveys show many Americans would be hard pressed to cover a $400 expense in cash.
    Experts say the key is to automate your savings so you do not even see the money in your paycheck.
    “Even if we do get through this period relatively unscathed, that’s all the more reason to be saving,” Mark Hamrick, senior economic analyst at Bankrate, recently told CNBC.com.
    “I have yet to meet anybody who saved too much money,” he added.
    Another advantage to saving now: Higher interest rates mean the potential returns on that money are the highest they have been in 15 years. Those returns may not last, with the Federal Reserve expected to start cutting rates in 2024. More

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    Here are some options for student loan borrowers struggling to make their payments

    Many student loan borrowers are not finding it easy to resume their payments.
    Fortunately, struggling borrowers have options, including continuing to pause their bills or enrolling in a more affordable repayment plan.

    Blackcat | E+ | Getty Images

    Many student loan borrowers are struggling to resume their payments.
    When the bills restarted after a more than three-year-long reprieve, just 60% of people with federal education loans had made a payment by mid-November, U.S. Department of Education data shows.

    “The fact that so few borrowers have been able to make a payment is unfortunately unsurprising,” said Persis Yu, deputy executive director at the Student Borrower Protection Center. “[People] were struggling to make payments before the pandemic.”
    Outstanding education debt in the U.S. has surpassed $1.7 trillion. In fact, education debt burdens Americans more than credit card or auto debt. The average loan balance at graduation has tripled since the 1990s, to $30,000 from $10,000. Around 7% of student loan borrowers owe more than $100,000.
    To help cushion the blow of resuming payments, the Biden administration is implementing a 12-month “on ramp” to repayment, during which borrowers are shielded from the worst consequences of falling behind. President Joe Biden also said his administration is still trying to figure out a way to cancel student debt after the Supreme Court struck down its first plan.
    Here are the other options for borrowers unable to pay their bills.

    1. Deferments

    Struggling borrowers should first see if they qualify for a deferment, experts say. That’s because their loans may not accrue interest under that option, whereas they almost always do in a forbearance.

    If you’re unemployed when student loan payments resume, you can request an unemployment deferment with your servicer. If you’re dealing with another financial challenge, meanwhile, you may be eligible for an economic hardship deferment.
    Those who qualify for a hardship deferment include people receiving certain types of federal or state aid and anyone volunteering in the Peace Corps, said higher education expert Mark Kantrowitz.
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    With both a hardship and an unemployment deferment, interest generally doesn’t accrue on undergraduate subsidized loans. Other loans, however, will rack up interest.
    The maximum amount of time you can use an unemployment or hardship deferment is usually three years, per type.
    Other, lesser-known deferments include the graduate fellowship deferment, the military service and post-active duty deferment, and the cancer treatment deferment.

    2. Forbearances

    Student loan borrowers who don’t qualify for a deferment may request a forbearance.
    Under this option, borrowers can keep their loans on hold for as long as three years. However, because interest accrues during the forbearance period, borrowers can be hit with a larger bill when it ends.
    Kantrowitz provided an example: A $30,000 student loan with a 5% interest rate would increase by $1,500 a year under a forbearance.

    If a borrower uses a forbearance, he recommends they at least try to keep up with their interest payments during the pause to prevent their debt from increasing.
    “A deferment or forbearance should be a last resort, but they are better than defaulting on the loans,” Kantrowitz said.
    Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit, recommends borrowers only use a forbearance or deferment for a short-term hardship, including a sudden big medical expense or period of joblessness.
    Borrowers are best off finding a payment plan they can afford, Mayotte said. 

    3. Income-driven repayment plans

    Income-driven repayment plans can be a great option for borrowers who are worried they won’t be able to afford their bills, experts say.
    Those plans cap your monthly payments at a percentage of your discretionary income and forgive any of your remaining debt after 20 or 25 years.
    The Biden administration recently introduced a new repayment option under which borrowers could pay just 5% of their discretionary income toward their undergraduate student loans, with some people having a $0 monthly bill.
    Some of the benefits of the Saving on a Valuable Education (SAVE) plan, however, won’t fully go into effect until the summer of 2024 because of the timeline of regulatory changes. More

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    Spot bitcoin ETF approval may be coming in January, experts say. Here’s what it means for investors

    ETF Strategist

    Investors await approval for the first U.S. spot bitcoin exchange-traded fund, which would be a milestone for cryptocurrency investors.
    Discussions between the Securities and Exchange Commission and asset managers with pending spot bitcoin ETF applications have advanced.
    Still, bitcoin “remains an extremely volatile and speculative asset,” said Bryan Armour, director of passive strategies research for North America at Morningstar.

    Marco Bello | Reuters

    The price of bitcoin has surged in 2023 as investors await approval for the first U.S. spot bitcoin exchange-traded fund, which would be a milestone for cryptocurrency investors, experts say.
    In early December, the digital currency topped $44,000 for the first time since April 2022, and year-to-date gains were above 160%, as of Dec. 21, mostly fueled by optimism for a spot bitcoin ETF.

    Meanwhile, discussions between the Securities and Exchange Commission and asset managers hoping to list bitcoin ETFs have advanced to technical details, signaling to some experts that an approval could be imminent.
    More than a dozen firms — including BlackRock, WisdomTree, Valkyrie and others — are waiting for the green light from the SEC, which could come in early January.

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    “For ETF investors, this would be the best product on the market,” said Bryan Armour, director of passive strategies research for North America at Morningstar. “All the other options right now have flaws to varying degrees.”
    Currently, U.S. investors can buy bitcoin futures ETFs, which own bitcoin futures contracts, or agreements to buy or sell the asset later for an agreed-upon price. The long-awaited bitcoin spot ETF would invest in the digital asset directly.

    Loading chart…

    If the SEC signs off on a spot bitcoin ETF, Armour anticipates a “batch approval,” with multiple ETF listings on the same day. “I would expect them to rule on spot ETFs holistically because most issuers are taking similar approaches” with applications, he said.

    “There are a lot of good signs that the SEC is taking the most recent batch of filings more seriously,” Armour said. “I’m more optimistic about a bitcoin ETF than ever before.”
    Some crypto investors expect a bitcoin rally upon approval, but it’s also possible the price will dip as investors sell to collect profits, Armour said.

    Cryptocurrency remains an ‘extremely volatile’ asset

    While SEC approval of a spot bitcoin ETF may make the asset class more accessible to the masses, experts urge investors to consider their risk tolerance and goals before piling in.
    “I think it depends on the investor,” said certified financial planner Ben Smith, founder of Cove Financial Planning in Milwaukee. If you’re a more aggressive investor with an appetite for higher risk, a spot bitcoin ETF could fit into a diversified portfolio, he said.

    Still, experts often suggest limiting cryptocurrency exposure, such as 1% to 5% of your allocation, to minimize downside exposure. “It still remains an extremely volatile and speculative asset,” Armour added.
    Some 72% of financial advisors said they would be more likely to invest in crypto if spot ETFs were approved in the U.S., according to a 2022 Nasdaq survey of 500 advisors. More

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    I’m a CNBC personal finance reporter — here’s the best money advice I heard this year

    Your Money

    As a personal finance reporter at CNBC, most days of the year, I’m at my desk talking to people about money.
    Here’s some of the advice that has stuck with me.

    Jack Hollingsworth | Tetra Images | Getty Images

    As a personal finance reporter at CNBC, most days of the year, I’m at my desk talking to people about money.
    Although the general topic stays the same, so many of the conversations I have with sources leave me with a new perspective.

    When I got the idea to do a roundup of some of the most interesting and helpful money insights I’d heard in 2023, I knew right away the points I wanted to bring back. Maybe that’s one definition of good advice? Guidance you may ignore but can’t forget?
    Well, here are some of the ideas and recommendations that stuck.

    1. ‘When we don’t talk about money, we’re shielding ourselves from knowing reality’

    “I find people are more private about money than their sex life,” psychoanalyst Orna Guralnik, who stars on the Showtime documentary series “Couples Therapy,” told me in May.
    It can take years of therapy sessions, Guralnik said, for people to get around to the subject. I was amazed by that! Money is an unavoidable daily part of our lives, and so how could we not talk about it?

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    Even more interesting was how Guralnik articulated the dangers of this avoidance.

    “Money is a very important point of contact with reality,” she said. “People can have all sorts of fantasies and ideas about themselves. But money is feedback from the real world. So, when we don’t talk about money, we’re shielding ourselves from knowing reality.”
    This really resonated. I’ve heard friends say they’ve gone months without checking their credit card balances, and I’ve noticed how I always underestimate my spending when I draw up a budget.

    Psychoanalyst Orna Guralnik, who stars on the Showtime documentary series “Couples Therapy.”
    Source: Showtime

    Guralnik pushes people to be more real.
    “You can’t take care of yourself if you don’t deal with reality,” she said. “We learn from reality. We grow from reality.”

    2. How to still have $1 million at 100

    Bill Stovall is a stellar example of how keeping expenses in line with income can pay off.
    At 100, he still has more than $1 million saved. What’s more, throughout his career in the steel industry, he said he never had an annual salary beyond $40,000. But each year he salted away 2% of his income for his old age — and his employer usually matched that.
    “That compounded over the years,” Stovall said in our November interview.

    Bill Stovall and his wife, Martha.

    The only debts he ever took on, he said, were for his mortgages. To this day, he looks for discounts at the grocery store and orders the cheaper dishes on restaurant menus. He enjoys following the stock market but almost never buys or sells individual stocks.
    His life story illustrates the benefits of consistency and frugality, two of the most effective financial habits.
    “I always lived within my means,” Stovall said. “I’m not a gambler.”

    3. Money struggles aren’t just on you

    When I interviewed Pulitzer-prize winning author Matthew Desmond in March about his new book “Poverty, by America,” we talked about a story from his own childhood. When his father lost his job and the bank took their house, Desmond originally blamed his family for their struggles.
    “When you’re in the middle of something, you often grasp at the explanation that is closest to you, which is often about shame and guilt,” Desmond said. When he interviewed people facing evictions for his first book, he said they often believed it was their fault they were losing their homes.

    Arrows pointing outwards

    “But I think it’s the sociologist’s job, to quote C. Wright Mills, to turn a personal problem into a political one,” Desmond said. “Millions of people are facing this every year. This is not on you.”
    Desmond’s wisdom applies to so much of the financial hardship people endure today in the U.S.
    Whether it’s a layoff or food insecurity, understanding when your struggle is the product of a larger societal problem helps you to be less hard on yourself — and hopefully more compassionate with others.

    4. Tiny financial changes are powerful

    I’ll end at the beginning.
    In January, I interviewed financial experts about the money moves people should make at the start of a new year. I told my sources that I didn’t believe people could make big changes overnight. And so, I asked them, were there small things they could do that would still make a difference?
    They had a lot of ideas.

    Rita Assaf, vice president of retirement with Fidelity Investments, provided one example. For someone age 35 who is making $60,000 a year, upping their retirement saving contribution by 1%, or less than $12 a week, could generate an additional $110,000 by retirement, assuming a 7% annual return.
    More recently, as student loan payments restarted, higher education expert Mark Kantrowitz illustrated the same lesson with paying down debt. If a borrower owed $10,000, and had a 5% interest rate, an additional $50 a month would shave nearly four years off a 10-year repayment timeline.
    Those numbers have stayed with me, as a reminder of the power of tiny changes we can work toward in the new year.
    Good luck! More

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    Op-ed: How to use ETFs to invest in stocks, bonds and alternative assets in 2024

    ETF Strategist

    ETFs have kicked open the door to opportunities for countless investors who have typically remained on the margins of lucrative asset management.
    Diversification is a cornerstone of sound investment strategies, and ETFs naturally lend themselves to this principle.
    ETFs’ liquidity and transparency also offer investors the flexibility they need to react to market movements.

    Westend61 | Westend61 | Getty Images

    As we stand on the cusp of the new year, one trend on the investment landscape that has brought significant changes in past years appears unshakeable: exchange-traded funds.
    The ongoing popularity of ETFs is no coincidence. Historically speaking, stock portfolio and asset management were much like exclusive clubs, since investing in diverse assets, such as stocks, commodities or bonds, required hefty capital.

    However, ETFs, which are traded on exchanges just like individual stocks, have kicked open the door to a myriad of opportunities for countless investors who have typically remained on the margins of lucrative asset management.
    Beyond accessibility, ETFs boast many other merits. Diversification, for one, is a cornerstone of sound investment strategies, and ETFs naturally lend themselves to this principle.

    More from ETF Strategist

    Here’s a look at other stories offering insight on ETFs for investors.

    ETFs also offer price updates throughout the trading day, allowing people to make informed decisions based on present market conditions. Finally, ETFs’ liquidity and transparency are two more feathers in their cap, allowing individuals to buy or sell them throughout the trading day. This offers investors the flexibility they need to react to market movements.
    The versatile ETF spectrum, covering various sectors, regions and strategies, provides investors with extensive opportunities to customize investments to their financial goals and risk levels. As we move into 2024, the potential for growth and innovation within the ETF space is substantial, presenting exciting opportunities for portfolio diversification and capitalizing on ETF benefits.

    Growth ETFs have the potential for higher returns

    Let’s start simple: growth ETFs.

    As a fund that focuses on companies expected to grow at an above-average rate compared to others in the market, growth ETFs provide multiple benefits for investors. Number one is the potential for higher returns.
    Second, many growth ETFs are invested in sectors such as technology, health care and renewable energy, which are the driving forces of innovation. Investing in these sectors can provide exposure to emerging trends and technologies.
    Growth ETFs are great at diversifying a portfolio. By including them, individuals can balance other investments that may have different risk and return characteristics, such as value stocks or bonds, and improve the overall performance of their portfolio.

    Fixed-income ETFs can diversify bond holdings

    Fixed-income ETFs have been garnering significant interest from investors, with inflows expected to continue the 2023 trend well into 2024.
    Fixed-income ETFs offer an effective way to diversify portfolios. They provide exposure to different types of bonds, such as corporate or municipal bonds, helping reduce overall portfolio risk. They also offer the flexibility of being traded on stock exchanges, which allows for liquidity and lets investors buy or sell shares easily.
    Moreover, with expectations that the Federal Reserve may be nearing the end of its rate hiking cycle, it might be a great time to consider fixed-income ETFs, more so for those with an overweight cash position.

    Alternative ETFs offer exposure to new asset classes

    Alternative ETFs are ETFs that provide exposure to alternative asset classes or investment strategies, ranging from hedge fund tactics to antiques and collectibles. They offer unique chances for diversification by exposing people to asset classes that may have low correlations with traditional investments such as stocks and bonds. This way, they can help reduce overall portfolio risk.
    Moreover, they generally have lower expense ratios, unlike actively managed alternative options, such as private equity funds. This cost efficiency can result in improved net returns for investors.

    As with any other investment security, it’s important to thoroughly research and understand alternative ETFs before considering them for one’s profile, but it’s hard to deny their potential in safeguarding a portfolio against market volatility while ensuring investors remain on their paths to prosperity.
    From high returns and exposure to cutting-edge sectors to stability and robust diversification, the potential ETFs carry is immense — and this sphere is only expected to keep evolving, presenting a wealth of brand-new opportunities. As we welcome the next year, investors would greatly benefit from harnessing the power of ETFs to meet — exceed even — their financial goals.
    After all, a well-diversified strategy is key to successful risk management and achieving long-term financial success.
    — Christopher J. Day, founder of Days Global Advisors, a Houston-based advisory firm that offers wealth management and private portfolio services. More