Investing

Compared with their parents at this age, today’s young adults are more likely to have a college degree and work full time, according to a recent report by the Pew Research Center.   
However, Gen Zers are also less likely to own a home, be married or have children. Additionally, about one-third still live with their parents.
But both parents and their adult children are less inclined to mind cohabiting, Pew also found, as living in multigenerational households becomes more mainstream.

By many measures, Generation Z is doing well.
Compared with their parents at this age, young adults are more likely to have a college degree and work full time — particularly women, who are not only achieving increasing levels of education but also earning more.   

However, Gen Z adults are also less likely to own a home, be married or have children.
Today’s young adults are reaching those key milestones later than their parents did in the early 1990s, according to a recent report by the Pew Research Center. Pew surveyed about 1,500 adults between the ages of 18 and 34 and more than 3,000 parents of adult children. Gen Z is generally defined as those born between 1996 and 2012, including a cohort of teens and tweens.

Student loan debt weighs on Gen Z

Although young adults today are much more likely than their parents to have a four-year college degree, work full time and have higher wages than their parents did 30 years ago, they are also more likely to have outstanding student loans, Pew found.
Not only is it common to carry education debt, but those balances have soared, the report also said, primarily as a result of the rising cost of college.
“They [Gen Zers] are more highly educated but they are taking on so much more debt, that is making it harder,” said Kim Parker, Pew’s director of social trends research.

Most people with student loans say they’ve had to delay one or more key life milestones because of their debt, other studies also show.
“Student loan debt prevents family formation, it prevents people from making decisions about their life, about purchasing a home, about buying their first car, about getting married, about having children,” Nicole Smith, chief economist at the Georgetown University Center on Education and the Workforce, previously told CNBC.
But that’s not the whole story.

The housing affordability crisis is also to blame

In addition to hefty student loan balances, inflation’s recent runup caused rent and housing prices to soar.
Between home prices and mortgage rates, 2023 was the least affordable homebuying year in at least 11 years, according to a separate report from real estate company Redfin.
“There are so many challenges with the cost of housing,” Pew’s Parker said. “That is a factor holding young adults back.”
Now, 31% of Gen Z are living with their parents because they can’t afford to buy or rent their own space, a separate report by Intuit Credit Karma found.
Even those who live on their own still lean on their family for financial support. Only 45% of young adults, ages 18 to 34, say they’re completely financially independent from their parents, according to Pew.

When I was growing up, 80 or 90% of people in my generation did better than their parents did. And those numbers have dropped substantially.

Janet Yellen
Secretary of the Treasury Department

“When I was growing up, 80 or 90% of people in my generation did better than their parents did. And those numbers have dropped substantially,” Treasury Secretary Janet Yellen recently told ABC News.
Most Gen Zers agree it’s harder today to make it on their own than it was for their parents when they were starting out, several studies show.
Although consumers as a whole are feeling more confident about the economy than they have in years, young adults blame current conditions for the affordability problems they face — coining the term “silent depression” to explain why financial independence is a work in progress.
More from Personal Finance:3 ways Gen Zers can build creditWhy can’t today’s young adults leave the nest?Gen Z, millennials are ‘house hacking’ to become homeowners
Roughly 38% of Generation Z adults and millennials believe they face more difficulty feeling financially secure than their parents did at the same age, largely due to the economy, according to a Bankrate report.
Additionally, 53% of Gen Zers say higher costs are a barrier to their financial success, a separate survey from Bank of America found.
And 73% of Gen Z respondents said today’s economy makes them hesitant to set up long-term financial goals, according to a recent Prosperity Index study by Intuit. 

Living with mom and dad has its benefits

Overall, the number of households with two or more adult generations has been on the rise for years, according to another Pew Research Center report. Now, 25% of young adults live in a multigenerational household, up from just 9% five decades ago. 
Meanwhile, as living with mom and dad has become more common for young adults — it’s also more socially acceptable, according to Parker.

Parents today are more involved in their adult children’s lives, often calling, texting and even keeping tabs on each other with GPS apps, Pew also found — and grown kids say they are largely fine with that.
“Both parents and young adults rate their relationships positively,” said Rachel Minkin, research associate at Pew.
Young adults who live at home even say the arrangement has been good for their relationship and financial situation and most also said they rely on their parents for advice on their jobs, finances and physical health.
There is, in fact, an economic benefit to these living arrangements, Pew found, and Americans living in multigenerational households are less likely to be financially vulnerable.
There are emotional benefits to these living arrangements as well, Parker said. “It might be keeping those ties to their parents closer.”
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A hand changing television channels with the remote control.
Manuel Breva Colmeiro | Moment | Getty Images

Company: Xperi (XPER)

Business: Xperi is a technology company that develops software solutions and has the following four main business segments. First, there’s pay-TV, which provides backend software for internet-enabled cable boxes. There is the consumer electronics segment, which delivers audio and media technology for consumer devices at home and on mobile. There is also the connected car unit, which brings high-quality multimedia and personalization to the connected car. Finally, Xperi has an independent media platform that allows Smart TV original equipment manufacturers to brand the experience, retain customer ownership and generate recurring revenues through the company’s TiVo brand.
Stock Market Value: $480.29M ($11.05 per share)

Activist: Rubric Capital Management LP

Percentage Ownership: 7.6%
Average Cost: $11.94
Activist Commentary: Rubric Capital is a New York-based hedge fund founded by David Rosen. It first got its start as a division of SAC Capital while Rosen was working there. The firm was launched independently in October 2016 by Rosen, who is a managing member. Rubric is a deep value, long/short investor that will become active in situations that require it. The firm has filed five previous 13D’s in its history and gained board representation in three of those situations.

What’s happening

On Jan. 22, Rubric nominated Deborah S. Conrad, former senior vice president and chief marketing officer of Hinge Health, and Thomas A. Lacey, former CEO and director of Xperi’s predecessor company, for election as directors to Xperi’s board at the company’s 2024 annual meeting.

Behind the scenes

Xperi has mid to high single-digit growth, over $500 million of revenue in 2023 and over 75% gross profit margins. However, the company is only guiding to $35 million of earnings before interest, taxes, depreciation and amortization for 2023. Peer companies with similar gross profit margins generate 25% to 35% EBITDA margins. Meanwhile, Xperi is guiding for 6% to 8%. So, the first opportunity for value creation is cost cutting. Presently the company spends 45% of revenue on selling, general and administrative expenses and 43% on R&D. Together, that is well more than total gross profit. There needs to be a lot more discipline in the company’s spending. Decreasing R&D by just 20% — to 35% of revenue — and SG&A by 5% would increase EBITDA from $35 million to over $95 million. Part of that can be done immediately by divesting or shutting down the Perceive artificial-intelligence chip business. This business has no revenue and burns through $20 million of expenses each year. That would be an immediate bump of EBITDA to $55 million. Moreover, there is value to Perceive, and the company could probably sell it for something.

Another benefit to selling Perceive would be getting back some credibility in the market about management’s strategic decisions after its curious divestiture of AutoSense, its cabin safety business. This is a business that was breaking even and had huge growth potential from regulatory tailwinds mandating additional interior safety precautions. Xperi announced that it would sell the business to the Swedish company Tobii AB for approximately $43 million, of which about $28 million was a promissory note to be paid off over three years starting in 2027, and $15 million was additional payments in aggregate over four years starting in 2028. Moreover, Tobii was a $50 million company, so Xperi transformed itself from an owner of a promising cabin safety and sensor business into the sole creditor of a Swedish micro-cap. As Xperi would need to invest in this business to grow it, this was likely a decision to try to make short-term margin guidance by sacrificing long-term prospects. 
But the problem with the company is not a bloated cost structure or poor strategic decisions. Those are just symptoms. The problem is a culture that is not focused on shareholder value. This can clearly be seen through Xperi’s executive compensation policies. The company has approximately 46 million shares outstanding, including approximately 3.6 million of restricted stock units that have been previously granted to management prior to Jan. 1, 2023. In the last nine months, Xperi has granted an additional 4.1 million RSUs to management, which will result in a 12% dilution to shareholders based on a full year. To make matters worse, 75% of these grants are just time based as opposed to performance based, which has resulted in management owning RSUs for 14% of the company – 75% of which are only subject to time vesting during a period when the company’s stock price has declined by 24%, while the S&P 500 has increased by 36%.
While it seems like Xperi has a lot of problems, the good news is that it has great products in excellent markets and a management team that just needs discipline. All of its problems have the same solution: fresh blood on the board that will change the corporate culture, institute discipline and hold management accountable to shareholder value. Accordingly, Rubric Capital nominated Conrad and Lacey for election as directors to the company’s board at Xperi’s 2024 annual meeting. Lacey certainly knows this industry and Xperi well, as he has been a shareholder since he left the company and seems to care about it prospering.
This is a company that is in desperate need of board refreshment; it has only five directors on the board and could easily add two directors while still having a very manageable board of seven. Moreover, three of the incumbent directors received over 12% of against votes at the last annual meeting. While this is not an unusually high number, it is for a company that had only been public for seven months at the time of the annual meeting. With the use of the universal proxy card, we believe Rubric should easily get at least one, and likely two, of its nominees elected if this goes to a proxy fight. But that should not happen. Rubric is being amicable here: looking to work with management, not threaten them. There is a big difference between settling for two additional directors on a seven-person board and replacing two incumbent directors on a five-person board. The company would be unwise to take that risk. While Rubric is the type of investor that would prefer to settle amicably and has never taken a proxy fight to a decision before, the firm once came very close to doing so at UK-based Mereo BioPharma, and it would take this all the way to a decision if forced to.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments.  More

Smart Tax Planning

The earned income tax credit helps provide refunds at tax time to qualifying low- and middle-income families.
But the federal tax credit, which was first enacted in 1975, could be improved to provide more help to Americans.
“This is like a no brainer, lift up society,” JPMorgan Chase CEO Jamie Dimon said. “And I would pay for it by taxing the wealthy a little bit more.”

Jamie Dimon, chief executive officer of JPMorgan Chase & Co., at the UK Global Investment Summit at Hampton Court Palace in London, UK, on Monday, Nov. 27, 2023. 
Chris Ratcliffe | Bloomberg | Getty Images

When filing tax returns this season, low- to middle-income families may have money coming back to them, thanks to the earned income tax credit.
The earned income tax credit, or EITC, is refundable, which means eligible workers receive a refund of the difference if the value of the credit is larger than the federal taxes they owe.

Families with children and incomes below about $46,600 to $63,400 in 2023 may qualify for the EITC this tax season, based on their marital status and number of children in their households.

More from Smart Tax Planning:

Here’s a look at more tax-planning news.

But the EITC — which provides around $60 billion annually to workers and their families — could be reformed to be more efficient, experts said at a panel hosted by the Bipartisan Policy Center on Friday.
“This is like a no brainer, lift up society,” JPMorgan Chase CEO Jamie Dimon said. “And I would pay for it by taxing the wealthy a little bit more.”
Increasing spending on the earned income tax credit would give more money to households and communities, and therefore providing more money for food and children’s education, he said.
“It brings dignity,” Dimon said. “That money will be spent in local communities.”

One tax break that might be eliminated to help boost the EITC is the state and local tax deduction, which provides a federal tax deduction of up to $10,000 for certain taxes paid to state and local governments, suggested Paul Ryan, former Speaker of the House and Republican representative for Wisconsin.
Dimon agreed.
“There are so many tax breaks out there that shouldn’t be there,” Dimon said.
Dimon has spoken out on policy issues before, including recent testimony before Congress where he said rules for Supplemental Security Income benefits should be updated.

How the earned income tax credit may be improved

The EITC was first enacted in 1975 to help with stagflation, a combination of slow economic growth and high inflation, that was then affecting the U.S. economy. Today, in addition to the federal tax break, 31 states and Washington, D.C. offer a state version of the earned income tax credit to further supplement wages, according to the Bipartisan Policy Center.
But there are ways the credit could be more effective, such as by expanding eligibility for childless workers, a change that was temporarily put in place in 2021 in response to the Covid-19 pandemic. The credit could also be adjusted so both younger and older workers may qualify.
Approximately 1 in 5 workers who are eligible for the federal earned income tax credit fail to claim it, according to the Bipartisan Policy Center.
In addition, there is also a high rate of improper payments, due to the credit’s complex eligibility rules.

Much of those problems can be solved by improving the technology used to administer the credit, Ryan suggested.
Having a more efficient system could make it possible to have it so the credit shows up in workers’ paychecks, rather than as one lump sum when they file their taxes, he said.
“I would rather have it embedded in the paycheck itself, so that each pay period you have that higher pay, so that you can budget more accordingly,” Ryan said.
Improved technology could also help get the earned income tax credit to eligible workers who are not currently receiving it, while also make it easier to change the terms of eligibility.
“We have a lot of expiring provisions coming in tax law in at the end in the next session of Congress,” Ryan said. “There is where you have churn of tax policy where you probably have an opportunity to make some of these expansions.” More

Smart Tax Planning

Some taxpayers will soon qualify for Direct File, a free tax-filing option from the IRS.
The pilot will begin as an invitation-only service before rolling out to certain taxpayers in 12 states by mid-March.
In 2023, individual U.S. taxpayers spent an average of $150 to prepare and file returns, according to the IRS.

IRS Commissioner Daniel Werfel testifies before a Senate Finance Committee hearing on Feb. 15, 2023.
Kevin Lamarque | Reuters

As the tax season kicks off next week, Americans have several free filing options — and some taxpayers will soon qualify for a new offering from the IRS.
Known as Direct File, the agency’s free filing software pilot will begin as an invitation-only service for a group of government workers before rolling out to certain taxpayers in 12 states by mid-March.

The software is “simple, secure and free,” Laurel Blatchford, the U.S. Department of the Treasury’s chief implementation officer for the Inflation Reduction Act, said in a statement Thursday.

More from Smart Tax Planning:

Here’s a look at more tax-planning news.

Direct File comes after a feasibility report authorized by the Inflation Reduction Act. The report found nearly three-quarters of taxpayers expressed interest in a free IRS-provided filing system.
In 2023, individual U.S. taxpayers spent an average of $150 to prepare and file returns, according to the Treasury Department.
The IRS on Thursday provided a Direct File demo to CNBC and other media outlets. Here’s what taxpayers can expect for the upcoming season.

Internal Revenue Service

Direct File is ‘starting small’ with 12 states

The IRS Direct File pilot intentionally starts with a limited group of taxpayers with relatively simple filings, according to IRS officials.

“We’re starting small: as the filing season begins, the pilot is undergoing continuous testing with taxpayers, so we can identify and resolve issues,” IRS Commissioner Danny Werfel said in a statement Thursday.
Eligible states will include Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming.
While Direct File won’t cover state returns, Arizona, Massachusetts and New York residents can immediately continue to state filing by importing Direct File data. California residents will use CalFile with some pre-populated information.
“We will be working closely with the 12 pilot states in this test run, which will help us gather information about the future direction of the Direct File program,” Werfel said.

Who qualifies for IRS Direct File

Residents of eligible states with a simple, straightforward return can qualify. The pilot will start with limited types of income, credits and deductions, IRS officials said.
While only certain taxpayers can use Direct File, the bilingual software includes built-in live chat support with IRS assistors.
The pilot will only accept Form W-2 wages, Social Security retirement income, unemployment earnings and interest of $1,500 or less. This means the pilot won’t include anyone with gig economy work or business income.

Internal Revenue Service More

Smart Tax Planning

The opening of tax season for 2023 returns officially starts for individual filers on Jan. 29.
Experts cover a few key changes taxpayers need to consider before filing this year.

Kseniya Ovchinnikova | Moment | Getty Images

The opening of tax season is approaching — and experts have a few reminders before you file.
The IRS expects to receive more than 128.7 million individual tax returns before the deadline for most filers, which is April 15.

Generally, the best way to avoid a delayed refund is by filing a complete and electronic return and using direct deposit. Last year, the average refund was roughly $3,200.

More from Smart Tax Planning:

Here’s a look at more tax-planning news.

Here are the key things taxpayers need to know before filing this season.

1. Watch for proposed child tax credit changes

House lawmakers last week advanced a bipartisan tax package with proposed changes to the child tax credit for 2023. If enacted, the adjustments could provide a bigger tax break to lower-income U.S. families, according to estimates from the Urban-Brookings Tax Policy Center.
Currently, the child tax credit is worth up to $2,000 per qualifying child for 2023, which reduces your taxes on a dollar-for-dollar basis. For 2023, $1,600 of the credit is refundable, meaning you can still get at least $1,600 without taxes owed.
“There are 19 million children who do not get the full child tax credit because their parents’ income is too low,” said Chuck Marr, vice president for federal tax policy for the Center on Budget and Policy Priorities.

There are 19 million children who do not get the full child tax credit because their parents’ income is too low.

Chuck Marr
Vice president for federal tax policy for the Center on Budget and Policy Priorities

The proposed changes would increase the refundable portion of the credit to $1,800 for 2023 and make the formula more generous for families with multiple children.
However, negotiations for the bipartisan tax plan are ongoing. If enacted, the child tax credit changes could happen after the tax season begins Jan. 29.   
Experts say eligible families shouldn’t rush to file before possible legislation changes. If you claim the refundable part of the child tax credit, you may not get a refund earlier than Feb. 27, according to the IRS.

2. Know the reporting changes for Form 1099-K

If you received business income via payment apps such as Venmo and PayPal, or from e-commerce companies such as eBay, Etsy or Poshmark, you’re less likely to get a tax form for 2023 — thanks to an IRS change in November.
For 2023, you can expect payment apps to send Form 1099-K if you had more than 200 transactions worth an aggregate over $20,000. But the IRS will phase in a $5,000 limit for 2024.

Don’t lean towards that inclination to cheat if you didn’t get a 1099-K.

Bill Smith
National director of tax technical services at CBIZ MHM

Regardless of whether you receive Form 1099-K for 2023, you still must report business income, according to Bill Smith, national director of tax technical services at financial services firm CBIZ MHM.   
“Don’t lean towards that inclination to cheat if you didn’t get a 1099-K,” he said.

3. Consider free tax filing options

There are several options for filing your federal taxes for free this season, including a limited Direct File pilot through the IRS.
While there’s not an official launch date for Direct File, the agency aims to have the pilot widely available to certain taxpayers by mid-March, according to IRS officials.
Eligible states include Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming.

Internal Revenue Service

“The 2024 pilot is an opportunity for the IRS to learn how best to deploy Direct File to meet the needs of taxpayers and test core improvements to the tax filing experience,” Laurel Blatchford, the U.S. Department of the Treasury’s chief implementation officer for the Inflation Reduction Act said in a statement Thursday.

Other free tax filing options may include:

IRS Free File: Free File offers online guided tax prep software if your adjusted gross income is $79,000 or less.
Volunteer Income Tax Assistance: VITA provides nationwide basic tax prep if you make up to $64,000.
AARP Foundation Tax-Aide: Low- to moderate-income filers over age 50 may qualify for Tax-Aide.
MilTax: There’s also a free filing option for members of the military community.
Free Fillable Forms: Taxpayers of all income levels can use Free Fillable Forms from the IRS, the electronic equivalent to filing a paper return. More

The U.S. has no federal bereavement leave policy, but workers in mourning still have options.
Here’s what they should know.

Fg Trade | E+ | Getty Images

After the loss of a family member or close friend, one of the last things someone wants to think about is their job. Unfortunately, they often have to.
The U.S. has no federal bereavement leave policy, meaning workers aren’t guaranteed time off after the death of a loved one to attend a funeral and grieve.

President Joe Biden in 2021 proposed a 3-day bereavement leave policy in his Build Back Better spending package, but the provision was dropped from the social safety net bill after objections from centrist Democrats. Mourning has been a major theme of Biden’s presidency, with him speaking often about losing his son Beau, who died in 2015 to brain cancer at age 46.
“Not being given this time for adjustment puts enormous additional pressure on the mourner,” said Mikolaj Slawkowski-Rode, an assistant professor of philosophy at the University of Warsaw and editor of the essay collection “The Meaning of Mourning: Perspectives on Death, Loss, and Grief.”
More from Personal Finance:What to do if you can’t find an accountant for tax seasonAmericans can’t pay an unexpected $1,000 expenseEmployers and workers are at odds over work-life balance
Despite the lack of federal bereavement leave, workers dealing with a loss may still have options. Here’s what they should know.

Your employer may have its own policy

Around nine out of 10 U.S. companies offer bereavement leave, according to the International Foundation of Employee Benefit Plans.

“Providing flexibility during a challenging time of loss is something many organizations are willing to work with employees on,” said Julie Stich, vice president of content at the International Foundation of Employee Benefit Plans.
Some employers’ policies are especially generous, Stich said. (Johnson & Johnson, for example, extends 30 days off for workers who have lost an immediate family member.)
“In our survey, there were two companies that offered 40 days for immediate family, grandparents and in-laws,” she said.

Adam Lister | Moment | Getty Images

The leave companies provide tend to vary based on who in your life has died. The average for an immediate family member was around five days, compared to roughly one day for a close friend, IFEBP found.
A small number of companies even permit workers to take time off to grieve the death of a pet.

Some states offer bereavement leave

Options for workers without bereavement leave

Workers without bereavement leave who have recently lost someone can ask their employer if they can use vacation or sick days to mourn, Stich suggested. Working remotely for a period or taking unpaid time off may also be options.
“As grief is a journey, flexibility may be needed over the course of several months or longer,” Stich said.

Grieving workers may have other options still.
While bereavement is not usually an acceptable legal reason to take time off under the Family Medical Leave Act, there are exceptions, said Jeff Nowak, co-chair of the Leave and Accommodations Practice Group at Littler Mendelson. (The FMLA offers certain workers up to 12 weeks of unpaid, job protected leave for a number of reasons, including the birth of a child or the need to care for a spouse or parent with a serious health condition.)
“FMLA leave likely would be available to the birth mom to the extent that she needs to recover from any medical procedures associated with miscarriage or still birth,” Nowak said.
A worker may also be able to use the FMLA if their mourning has left them with a serious health condition, such as anxiety or depression, that makes them unable to perform their job, he said.
Similarly, the Americans with Disabilities Act, or ADA, protects conditions including depression, and entitles workers to leave, Nowak added. More

Inflation has prompted even wealthy Americans to curb their spending habits.
But affluent millennials still feel pressured to spend to show they’re successful, a recent survey finds.
To build true wealth, experts say they may want to reframe their thinking.

Ascentxmedia | E+ | Getty Images

High inflation has prompted even well-to-do Americans to rethink their spending habits.
But one group — affluent millennials — are more likely to lie or exaggerate their finances to appear financially successful, according to a recent survey from Wells Fargo.

That goes for 34% of affluent millennials versus just 20% of Gen X or 4% of baby boomers.
More than half of affluent Americans have cut back on luxury purchases post pandemic. Moreover, most say they wait until items are marked down before they buy them.
Yet affluent millennials — with $250,000 to more than $1 million in investable assets — are going to great lengths to appear wealthy.
Wells Fargo found 29% of affluent millennials admit they sometimes buy items they cannot afford to impress others.
Meanwhile, 41% of affluent millennials admit to funding their lifestyles with credit cards or loans, versus just 28% of Gen Xers and 6% of baby boomers.

More from Personal Finance:The quiet luxury trend is out and ‘loud budgeting’ is inMany Americans cannot pay for a $1,000 unexpected expenseShoppers embrace ‘girl math’ to justify luxury purchases
More than half — 51% — of affluent millennials say their efforts are working, with people assuming they are wealthier than they are.
But they are paying a price, with 40% reporting they have taken on more debt than they would prefer.
Affluent millennials have been affected by inflation, a high cost of living and the restarting of federal student loan payments, if they still carry those debts, said Emily Irwin, managing director of advice and planning at Wells Fargo.
“Yet they want to have a reflection of, ‘We’re working hard, and therefore we’re successful, and we can still do everything that we want to do,'” Irwin said.

Money still a taboo topic

Despite the displays of rich lifestyles that appear on social media, two-thirds of individuals surveyed are reluctant to talk about money, according to Irwin.
“It seems to be a real silent journey that individuals are on,” Irwin said.
Women in particularly are more hesitant to discuss financial topics, except for earnings.
Meanwhile, men are most reluctant to talk about their earnings, though they are willing to address most other financial topics, including investments, balance sheets and debt.
Silence around money can encourage illusions about how much money other people really have, according to Irwin.
Regardless of what someone’s financial picture is, it is easy to draw conclusions from what they portray on social media, Irwin said.
“There’s this tension between looks and appearances and taking on debt,” Irwin said.
While people may be willing to portray a certain lifestyle — and the balance sheet necessary to support it — it is important to keep in mind that that may or may not be true behind the scenes, she said.

Not spending key to becoming rich

Much of people’s behaviors come down to their money stories – How did they grow? How were they raised with money? And how does that have an impact on their spending and saving behaviors now?
People who are trying to put on a show of affluence tend to come from poor homes and also tend to not have as much money or net worth, notes Brad Klontz, a certified financial planner and expert in financial psychology and behavioral finance. Klontz is also a member of the CNBC FA Council.
“It’s just not representative of how most people become wealthy and how most wealthy people spend their money,” Klontz said.
Ultra wealthy individuals won’t show you their wealth on Instagram or show you their designer labels and Gucci belts, he said. Instead, they’re often enthusiastically frugal.
“The only way to grow net worth is to not spend your money,” Klontz said.
Before making discretionary purchases, ask yourself some questions first, Irwin suggested.
First, do you have enough cash flow to support those expenditures?
Second, do you have enough money saved for emergencies?
Additionally, are you paying yourself in a retirement plan, either through an employer or self-directed IRA?
“Those are the kinds of things that you want to be able to identify as you put on your oxygen mask first,” Irwin said.
“Only after that are we really able to think about, ‘Hey, is splurging appropriate, given the overall financial picture?'” she said. More

Microsoft joins a list of major tech companies that announced layoffs at the start of 2024.
If you’re offered a voluntary buyout deal, there are a few things to consider before you accept.
“Buyout regret is real,” said Suzy Welch, a career expert and CNBC contributor.

Skynesher | E+ | Getty Images

Microsoft joined a list of big tech companies that announced major layoffs at the start of 2024.
The technology company plans to cut about 9% its Gaming Unit headcount, amounting to 1,900 laid off workers, according to a memo obtained by CNBC.

Earlier this week, EBay said it plans to let go 1,000 employees, or 9% of the company’s staff. These announcements join a flurry of layoffs from tech behemoths like Amazon and Google.
Amazon let go of 30 employees in its Buy with Prime unit while Google has more job cuts slated for the year after paring its headcount of central engineer and hardware workers.
More from Personal Finance:What to do if you can’t find an accountant for tax seasonAmericans can’t pay an unexpected $1,000 expenseEmployers and workers are at odds over work-life balance
Meanwhile, SAP, the German software company, plans to offer job changes or voluntary buyouts for 8,000 employees as part of its restructuring program for 2024.  
With all these recent layoffs, if you find your company aims to carry out voluntary buyouts, there are a few things to consider before you accept.

“Buyout regret is real,” said Suzy Welch, a career expert and CNBC contributor. “People take them in the moment. They think, ‘The money’s good, and ‘Non-voluntary layoffs are going to be next.'”
If you ever receive a buyout deal, first assess the value of the financial package.
“How many months of severance pay will you get? Will you have health coverage and for how long? How will your retirement benefits be affected?” said Julia Pollak, chief economist at ZipRecruiter.
Afterwards, see if there’s room for negotiation, experts say. For example, explore options to work fewer hours or find ways to boost your buyout deal, they advise.

Always make sure you get a written letter of recommendation and not the promise of one before signing the dotted line.

Suzy Welch
career expert

“Management is not expecting 100% acceptance.” Welch said. “Maybe a deal can be struck for different [or] less work so you can keep doing what you love.”
Ask if you can stay in your job under different leadership or on a different team, Pollak added.
If not, seek an additional month or two of severance pay based on your performance and tenure, or an extra six months of health insurance coverage, she said.
“These kinds of improvements can be worth a great deal of money and have a large effect on your financial situation during your job search,” Pollak said. “Try to negotiate a departure on the best possible terms, with the longest possible benefits coverage and severance pay, or largest possible lump sum payout.”

The worst possible outcome is if the only alternative to the buyout is being involuntarily terminated without the benefits, Pollak explained.
“Always make sure you get a written letter of recommendation and not the promise of one before signing the dotted line,” Welch said. More