Investing

Workers may have jobs where they pay into Social Security or earn pension benefits.
When they have both, their Social Security benefits may be adjusted to reflect that.
There’s growing support in Congress to either revise those rules or eliminate them altogether.

Araya Doheny | Getty Images

When Dave Bernstein, 87, started working at the U.S. Postal Service in February 1970, he was making $2.35 an hour.
To supplement his income, he also took on other work. Years later, Bernstein decided in 1992 to take a voluntary retirement.

“We knew there was going to be a reduced pension because of the early out,” said Phyllis Bernstein, Dave’s wife, who is 84.
But what came next was something the couple did not expect.
While Dave was expecting a monthly Social Security check of around $800, it ended up being just about half that amount – around $415 – even though he had earned the required 40 credits to be fully insured by the program. The benefits were adjusted based on rules for workers who earn both pension and Social Security benefits.
More from Personal Finance:Will Social Security be there for me when I retire?Medicare open enrollment may cut retirees’ health-care costsHow much your Social Security check may be in 2024
The couple, who reside in Tampa, Florida, have had a different retirement than they envisioned due to the lower income.

Phyllis kept working until she was 82. They have also turned to family for financial support.
Their lifestyle is frugal, with home-cooked meals and cars they kept for 20 years, or “until the wheels were falling off,” the couple jokes.
But their limited resources have made traveling to Australia and New Zealand – Phyllis’ dream – out of reach.
“When he retired, I was working,” Phyllis said. “We just couldn’t do the travel.”
Today, Dave is pushing for the Social Security rules that reduced his benefits to be changed.

His union, the American Postal Workers Union, has endorsed the Social Security Fairness Act, a bill proposed in Congress that would repeal Social Security rules known as the Windfall Elimination Provision, or WEP, and Government Pension Offset, or GPO, that reduce benefits for workers had positions where they did not pay Social Security taxes, also called non-covered earnings.
The legislation has support from other organizations that represent public workers, including teachers, firefighters and police.
The bill has overwhelming bipartisan support in the House of Representatives – 300 co-sponsors – at a time when that chamber has been politically divided. That support recently prompted House lawmakers to send a letter to leaders of the Ways and Means Committee to request a hearing.
The Social Security Fairness Act has also been introduced in the Senate, with support from 49 leaders from both sides of the aisle.
Yet some experts say just getting rid of the rules may not be the most effective way of making the system fairer.

How the WEP, GPO rules work

The WEP applies to how retirement or disability benefits are calculated if a worker earned a retirement or disability pension from an employer who did not withhold Social Security taxes and qualifies for Social Security from work in other jobs where they did pay taxes into the program.
Social Security benefits are calculated using a worker’s average indexed monthly earnings, and then using a formula to calculate a worker’s basic benefit amount. For workers affected by the WEP, part of the replacement rate for the average indexed monthly earnings is brought down to 40% from 90%.
The GPO, meanwhile, reduces benefits for spouses and widows or widowers of recipients of retirement or disability pensions from local, state or federal governments.

It affects hundreds of thousands, if not millions of public employees that paid into Social Security and essentially are being penalized because they also happen to be public servants.

Edward Kelly
general president of the International Association of Fire Fighters

Under the GPO, Social Security benefits are reduced by two-thirds of the government pension. If two-thirds of the government pension is more than the Social Security benefit, the Social Security benefit may be zero.
The impact of the rules is far reaching, according to Edward Kelly, general president of the International Association of Fire Fighters. Many firefighters work in second jobs in the private sector as cab drivers, bar tenders or truck drivers, where they earn credits toward Social Security.
“They steal their money, because they’re also public employees,” said Kelly, who describes his union members as “passionately angry” about the issue.
“It affects hundreds of thousands, if not millions of public employees that paid into Social Security and essentially are being penalized because they also happen to be public servants, whether they are teachers, cops and, obviously, firefighters,” Kelly said.

Why experts say another fix may be better

The WEP and GPO rules were intended to make it so workers who pay Social Security taxes for their entire careers are treated the same as those who do not.
But under those current rules, some beneficiaries receive lower benefits than they would have if they paid into Social Security for all of their careers, while others receive higher benefits, according to the Bipartisan Policy Center.
Yet repealing the WEP and GPO rules would result in Social Security benefits that are “overly generous” for non-covered workers, research has found.
Part of what may create that advantage is that Social Security benefits are progressive, and therefore replace a larger share of income for lower earners. So someone who only has part of their salary history in Social Security may get a higher replacement rate without considering their pension income.

Fully repealing the WEP and GPO rules may also come with higher costs at a time when the program facing a funding shortfall. The change would add an estimated $150 billion to the program’s costs in the next 10 years, according to the Center on Budget and Policy Priorities.
Another way of handling the disparity may be to create a proportional approach to income replacement. Instead of the WEP, workers’ benefits would be calculated based on all of their earnings and then adjusted to reflect the share of their careers that were in jobs covered by Social Security. A similar approach may be taken with the GPO.
Certain bills on Capitol Hill propose a proportional approach.
However, a proportional formula may not solve all the inequities in the current system, according to Emerson Sprick, senior economic analyst at the Bipartisan Policy Center, which has prompted to think tank to work on refining its proposal.

‘Extremely complex’ to understand

An important advantage to reforming the current formulas would be making it easier for workers to understand and plan for their retirements.
“It is definitely extremely complex, and very hard for folks preparing for retirement or in retirement, to understand what it means for their benefits,” Sprick said.
Social Security statements that provide retirement benefit estimates do not take these rules into account.
Consequently, many workers find out their benefits are adjusted when they are about to retire.

shapecharge | E+ | Getty Images

“The young guys don’t pay attention to it because it’s too far out; they’re not worried about it,” Kelly said of the firefighters.
“It’s not until you’re ready to go out the door that you actually start paying attention to what you’re going to have to live off when you actually retire,” he added.
The reductions to their Social Security benefits can be a shock.
For beneficiaries like the Bernsteins who start out with lower benefits, it can be difficult to catch up, even after a record 8.7% Social Security cost-of-living adjustmentw went into effect this year.
“Gas this summer and in the spring at $4 a gallon ate that money up like it wasn’t even there,” Dave Bernstein said. More

A man check his phone near an Apple logo outside its store in Shanghai, China September 13, 2023. 
Aly Song | Reuters

Companies are feeling the ill effects of dampening consumer demand in a range of sectors, but select names are confident they can deliver solid growth even as the economy becomes more challenging.
Wall Street analysts can help investors identify stocks that have what it takes to thrive amid short-term headwinds — and that can offer attractive returns going forward.

Here are five stocks favored by Wall Street’s top analysts, according to TipRanks, a platform that ranks analysts based on their past performance.

Apple

Tech giant Apple (AAPL) recently reported its fiscal fourth-quarter results. While the company’s earnings exceeded expectations, the top line reflected the impact of macro challenges on consumer spending. Apple’s overall revenue declined for the fourth consecutive quarter due to notable declines in iPad and Mac sales.
Baird analyst William Power lowered his revenue estimates and also cut his price target for AAPL stock to $186 from $204 to reflect the company’s flattish top line guidance for the December quarter. That said, Power raised his EPS estimate slightly to $2.08 from $2.04 due to higher margin guidance.    
Commenting on the guidance, Power noted that Apple’s Services business remains a key pillar. The analyst thinks that management’s commentary about the expectation of continued strength in the Services business in the holiday quarter and the projected rise in iPhone revenue addressed some concerns.
Power explained that his $186 target price target is 29 times his calendar year 2024 EPS forecast, putting AAPL’s valuation at the high end of its historical average and at a premium to other technology and consumer staples leaders, “reflecting strong execution, growing services contribution, continued eco-system benefits and strong free cash flow.”

Power ranks No. 194 among more than 8,600 analysts tracked by TipRanks. His ratings have been profitable 55% of the time, with each delivering a return of 14.7%, on average. (See Apple Technical Analysis on TipRanks)

Amazon

E-commerce and cloud computing behemoth Amazon (AMZN) impressed investors with its solid third-quarter earnings, which surpassed Wall Street’s expectations.  
Goldman Sachs analyst Eric Sheridan noted that Amazon’s Q3 earnings beat was fueled by the momentum in its e-commerce business, expansion of the North America unit’s operating margin, and continued stabilization in Amazon Web Services’ (AWS) revenue growth.
The analyst added that the company’s restructuring initiatives, regionalization of its domestic fulfillment center network, and success at overcoming the cost headwinds seen in the past 24 months have helped deliver an inflection point in North American e-commerce margins.
Sheridan thinks that Amazon is well-positioned to outperform in the future, given that e-commerce margins continue to overcome headwinds that emerged in recent years and its advertising business continues to expand. Further, AWS can still gain from long-tailed structural opportunity created by the transitioning needs of enterprise customers, he said.  
“Looking over a multi-year timeframe, we reiterate our view that Amazon will compound a mix of solid revenue trajectory with expanding margins as they deliver yield/returns on multiple year investment cycles,” said Sheridan, reiterating a buy rating and raising the price target for AMZN stock to $190 from $175.
Sheridan holds the 288th position among more than 8,600 analysts on TipRanks. His ratings have been successful 57% of the time, with each rating delivering an average return of 10.1%. (See Amazon Options Activity on TipRanks).

Microsoft

Yet another tech giant on this week’s list is Microsoft (MSFT), which recently delivered upbeat fiscal first-quarter results and issued an encouraging second-quarter revenue outlook.
Deutsche Bank analyst Brad Zelnick noted that Microsoft’s revenue surpassed guidance, driven by strength across the board, with significant upside in the high-margin Windows offering.
The analyst highlighted that revenue from Azure, MSFT’s cloud computing platform, grew 28% year-over-year, thanks to higher GPU capacity and marginally better per-user services. He was also impressed with the improvement in the fiscal first quarter’s margins, thanks to the company’s operating discipline.  
Zelnick is quite optimistic about the Microsoft 365 Copilot artificial intelligence (AI) add-on. He pointed out that 40% of the Fortune 100 were said to be already using the product in pre-release with very strong feedback. While the company said it expects the related revenue from this new launch to increase “gradually over time,” he thinks that the outlook is likely conservative.
“We believe this is the most anticipated new product we have ever seen released in our long time covering the Software industry,” the analyst said about Microsoft 365 Copilot.
Zelnick raised his price target from $380 to $395 and reiterated a buy rating on MSFT stock. He ranks No. 48 among more than 8,600 analysts on TipRanks. His ratings have been successful 69% of the time, with each rating delivering an average return of 15.1%. (See Microsoft Hedge Fund Trading Activity on TipRanks).

ServiceNow

Zelnick is also bullish on ServiceNow (NOW), a cloud-based software company that helps enterprises automate and manage workflows. The company delivered market-beating third-quarter earnings and revenue, thanks to the impressive growth in subscription revenues and an aggressive push into generative artificial intelligence.
Following the Q3 2023 print, Zelnick maintained a buy rating on NOW stock and increased the price target to $650 from $625. In particular, the analyst highlighted the 24% year-over-year growth in the current remaining performance obligations — that is, contract revenue that will be recognized as revenue in the next 12 months — that was fueled by the performance of the U.S. federal vertical. This vertical saw net new annual contract value increase by more than 75% and strong early renewals in the quarter.
“Management commentary suggests the Federal opportunity is both robust and durable as agencies look to standardize on a single platform that offers end-to-end solutions,” said Zelnick.
The analyst also observed the early demand for ServiceNow’s generative AI offering Now Assist and broader generative AI capabilities, with the company mentioning that it has a pipeline of 300 customers and signed four large deals at the quarter-end.
Overall, Zelnick thinks that ServiceNow is ideally positioned to help customers adapt to a digital-first world and leverage generative AI across multiple enterprise workflows. (See ServiceNow Insider Trading Activity on TipRanks)      

CyberArk Software

The last stock for this week is identity security company CyberArk Software (CYBR). Earlier this month, the company reported solid third-quarter results. The company raised its full-year guidance for annual recurring revenue, or ARR, following 38% year-over-year growth in Q3 2023 ARR to $705 million.
After the results, Mizuho analyst Gregg Moskowitz, who ranks 151st out of more than 8,600 analysts on TipRanks, increased the price target for CYBR stock to $195 from $175 and reaffirmed a buy rating. The analyst raised his full-year revenue and earnings estimates to reflect the company’s upgraded guidance.
The analyst acknowledged the company’s improved execution and a healthy increase in seven-figure annual contract value transactions in the third quarter. He highlighted management’s commentary about customers increasingly buying more than two products and the dramatic rise in the average deal sizes for new logos.
“We continue to view CYBR as a primary beneficiary of a heightened threat landscape that has amplified the need for privileged access, and identity and secrets management,” said Moskowitz.
Moskowitz’s ratings have been profitable 57% of the time, with each delivering an average return of 13.8%. (See CyberArk Financial Statements on TipRanks)        More

Defense stocks have largely outperformed in the wake of Hamas’ attack on Israel and the ensuing war, upholding the market axiom that these names tend to see better returns during times of conflict.
But some retail investors are staying away from the stocks, citing moral qualms about investing in a thesis tied to a deadly war.

An F-15E fighter aircraft can carry seven groups of four StormBreaker bombs.
Source: Raytheon

As the war between Israel and the Hamas militant group ramped up last month, Kenneth Suna took to his investing-focused TikTok account.
Suna began a video asking his more than 200,000 followers “if you’re cool with profiting off war,” before adding “I am not.” He went on to list the names and performances of defense-focused funds including the iShares U.S. Aerospace & Defense ETF (ITA) and the SPDR S&P Aerospace & Defense ETF (XAR).

“You have a choice where your money goes,” the 38-year-old Washington, D.C., resident told CNBC. “I would feel guilty.”
Suna is part of a group of everyday investors skirting the “returns at any costs” mentality on moral grounds. As the latest geopolitical conflict escalates, these investors are ignoring defense stocks despite the market axiom that those holdings tend to perform better in times of war.
Indeed, the iShares U.S. Aerospace & Defense ETF popped more than 4% in the week following Hamas’ Oct. 7 attack and went on to finish October up about 3.7%. Meanwhile, the benchmark S&P 500 index added just 0.5% that week and ended the month 2.2% lower.

Ignoring market wisdom

Retail traders poured into defense stocks and funds in the aftermath of the invasion, but inflows have since cooled, according to Vanda Research. Defense giant RTX, which Vanda found was a top sector pick among individual investors, has climbed 14% since the start of October.
But not everyone sees the intensifying conflict as a moment to invest in defense stocks. Weapon Free Funds, a screening tool gauging defense exposure in portfolios, including the funds in your 401(k), recorded a five-fold increase in visits between the attack and early November from the 30 days prior. 

Weapon Free Funds is part of a family of tools from shareholder advocacy nonprofit As You Sow aimed at helping people check if their fund dollars are invested in companies tied to themes such as guns or deforestation. Andrew Behar, As You Sow’s CEO, said it can be particularly challenging for those with money in large funds to decipher which companies they are investing in.
“The person who earns the money should have the right to decide how it’s invested and should be able to invest in alignment with their values,” Behar said. “We find there’s a really strong correlation of people who want that, but they don’t know how to do it.”
The screening platform gives funds a letter grade. An “A” means no holdings were flagged in a military weapons screen, while an “F” indicates more than 4% were. (For reference, the SPDR S&P 500 ETF Trust (SPY), which tracks the broad S&P 500 index, earned a “D'” grade.)

155mm artillery shells are inspected in the production shop at the Scranton Army Ammunition Plant on April 12, 2023 in Scranton, Pennsylvania.
Hannah Beier | Getty Images

Critics of defense companies have pointed to the fact that the need for their products can increase during periods of heightened geopolitical strife. The latest war’s impact on these businesses has already started becoming apparent: General Dynamics CFO Jason Aiken told analysts last month that artillery demand would likely see “upward pressure” as the Israel-Hamas conflict broke out alongside the ongoing war between Russia and Ukraine.
Those with moral qualms have also historically highlighted the death toll of war as a reason for their uneasiness.
Weapon Free Funds’ recent surge in interest surpassed what was seen in February and March of 2022 following Russia’s invasion of Ukraine, As You Sow said.
That can be tied to differences in public consensus of how these conflicts should play out. While there was overwhelming international support for Ukraine to fight back with weapons, opinion appears to be more mixed on the Israel-Hamas war as calls for a ceasefire grow.

Drawing the line

These moral calculations are the latest example of a growing trend of some investors wanting their holdings to reflect personal values. In one of the newest data points on the relationship, U.S. Bank found more than four-fifths of Gen Z and millennials would underperform the S&P 500′s 10-year return to ensure the companies they invested in had aligned with their beliefs.
“A common decision making process is that if I hold a value that I’m anti-war, then I don’t want to be holding stocks that enable war,” said Brad Barber, a finance professor focused on investor psychology at the University of California, Davis. “That is a fairly simple way of trying to invest in a way that’s consistent with one’s values.”
Meanwhile, Suna said he can feel caught between two schools of thought. There are those who tell him that war is going to happen anyway, so he might as well see the return on defense stocks. On the other side of the spectrum, he’s heard younger people say that they don’t invest because no corporation is perfect or because they see the stock market as an unequitable system for building wealth.
Suna is left walking a fine line: He views investing as creating a chance at retirement one day, but simultaneously needs to feel morally sound about where his money goes. Still, while he said choices about where to invest can sometimes be tricky or complex, deciding to avoid defense stocks wasn’t a particularly difficult call.
“More and more young people are saying, ‘You know what? You can invest how you want, but I’m not OK with that,'” Suna said. “Everyone draws the line somewhere.” More

Only a small share of millionaires say they feel wealthy, according to a recent report.
Persistent inflation has taken a toll on most Americans’ financial security, making it harder to feel well off.
What does it take to be rich? “The short answer is more,” said Jason Van de Loo, chief client officer at Edelman Financial Engines.

Feeling “rich” is increasingly elusive.
Even among millionaires, only 8% would characterize themselves as wealthy these days.

Roughly 60% of investors with $1 million or more of investable assets said they are more likely upper middle class, according to a recent Ameriprise Financial survey of more than 3,000 adults.
To that point, 31% consider themselves decidedly middle class.
More from Personal Finance:Credit card balances spiked in the third quarterWhy working longer is a bad retirement planRetirement goal expectations vs. reality
Between persistent inflation, high interest rates and geopolitical and economic uncertainty, fewer Americans, including millionaires, feel confident about their financial standing.
“Many people feel squeezed between higher prices and lower asset prices,” said Kim Maez, a certified financial planner and private wealth advisor at Ameriprise. “While a necessary part of the economic cycle, it’s also uncomfortable.”

Even doctors, lawyers and other highly paid professionals — also referred to as the “regular rich” — who benefit from stable jobs, homeownership and a well-padded retirement savings account, said they don’t feel well off at all. Some even said they feel poor, according to a separate survey conducted by Bloomberg.
Of those making more than $175,000 a year, or roughly the top 10% of tax filers, one-quarter said they were either “very poor,” “poor” or “getting by but things are tight.”
Even a share of those making more than $500,000 and $1,000,000 said the same.
Despite their high net worth, just 44% of all millionaires felt “very comfortable,” another report by Edelman Financial Engines found.

What it takes to feel wealthy

What would it take to feel wealthy?
Jason Van de Loo, chief client officer at Edelman Financial Engines, recently told CNBC, “The short answer is more.”
Most people said they would need $1 million in the bank, although high-net-worth individuals put the bar much higher. More than half said they would need more than $3 million, and one-third said it would take more than $5 million, Edelman Financial Engines found.
When it comes to their salary, Americans said they would need to earn $233,000 on average to feel financially secure, according to a separate Bankrate survey. But to feel rich, they would need to earn nearly half a million a year, or $483,000, on average.
Of course, higher costs continue to make it hard to make ends meet. Households are facing surging child-care expenses, ballooning auto loans, high mortgage rates and record rents along with the resumption of student loan payments.
To bridge the gap, more people rely on credit cards to cover day-to-day expenses.
In the past year, credit card debt spiked to an all-time high, while the personal savings rate fell.

But a deterioration of the American dream has been decades in the making, according to Mark Hamrick, Bankrate’s senior economic analyst.
“Structural or long-term changes have been injurious to Americans’ ability to manage their personal finances,” he said.
“Where there was a time in the U.S. when a married couple, with children, could get by with a single-wage earner in the house, those days are mostly vestiges of the past.”
Money continues to be the No. 1 source of stress among households, Van de Loo added. “The last couple of years just lit a match to those concerns.”
Subscribe to CNBC on YouTube.Don’t miss these stories from CNBC PRO: More

Your Money

Farnoosh Torabi, author of “A Healthy State of Panic,” says financial fear can help you build wealth if you lean into it. 
“People who go and do that thing that presents as scary … they’ll come out of that on the other side of that road potentially more successful,” Torabi said.

Too often, people are encouraged to be fearless, according to personal finance expert Farnoosh Torabi, but fear is a valuable tool, particularly when it comes to building wealth.
“If you are feeling fear at life’s crossroads, pertaining to your finances, your career choices, your relationships, I think it’s important to listen to that,” said Torabi, host of the “So Money” podcast and author of “A Healthy State of Panic.”

Torabi made her comments during CNBC’s Your Money event.
Amid today’s persistent inflation, high interest rates, bank failures, geopolitical uncertainty and the lingering possibility of a recession, “it’s normal to fear these big ‘what ifs,'” she said. But once you distill that fear, you can use it to better your financial standing.

More from Women and Wealth:

Here’s a look at more coverage in CNBC’s Women & Wealth special report, where we explore ways women can increase income, save and make the most of opportunities.

“Fear, here, is an opportunity,” Torabi said. The following two steps can help you harness fear to build wealth.

1. Get informed about what scares you

“People who go and do that thing that presents as scary … they’ll come out of that on the other side of that road potentially more successful,” Torabi said.
For example, “if you are fearing investing in the stock market, maybe it’s because you are afraid to lose money, which is understandable,” Torabi said.

“But the solution is not to not invest,” she added. “The solution is to get educated and understand that the market is volatile — but when you invest for the long run, when you are in a diversified portfolio, there’s a much higher chance of success.”
While market downturns are inevitable, long-term investors have historically earned a nearly 10% average annual return.
“Sometimes fear is a nudge to get more educated,” Torabi added.

2. Play out the worst-case scenario

Often, it’s women who feel financially insecure, according to Northwestern Mutual’s 2023 Planning and Progress Study. Women are also more likely to live paycheck to paycheck and consider themselves financially fragile, a separate report by Varo Bank found.
Torabi, who said she’s wrestled with her own relationship with fear as a young adult, advises playing out the worst-case scenario.
“If you are afraid of a recession, better to think about what might happen if you lost your job,” she said.

In fact, nearly six in 10 women said they don’t have a long-term financial plan that factors for up and down economic cycles, Northwestern Mutual’s study also found. That may mean determining how to lower your expenses and build up a cash cushion so you can maintain your current lifestyle in the event of a temporary income disruption.
“Our brain is prompted to find a lasting cure and usually that cure is to make a plan,” Torabi said. “You’ve taken this fear and you’ve used it as a tool to make a road map.” More

“Dupes,” short for duplicates, was popularized as a broad consumer trend by social media platform TikTok.
Travelers adopted the strategy of seeking out cheaper alternatives in 2023 as prices soared, and will continue to do so in 2024, experts said.
It’s not always about flight price. In many cases, travelers can also save on hotels, food and local transportation, too, experts said.

Klaus Vedfelt | Digitalvision | Getty Images

Flight searches for travel ‘dupes’ increased in 2023

Dupe is, of course, a new term that puts a spin on the old concept of bargain hunting.
Data shows that travelers leveraged the strategy more in 2023. For example, flight searches more than doubled for several “dupe” destinations internationally, according to Expedia data.
Searches to Taipei, a dupe for Seoul, were up 458% in the U.S. and 2,786% globally, according to Expedia. Those to Pattaya, Thailand, an alternative to Bangkok, rose 163% in the U.S. and 249% globally.

Likewise, flight searches to the island Curaçao, a stand-in for St. Martin, were up 228% in the U.S. and 185% worldwide. Those to Perth, Australia, a dupe for Sydney, jumped 33% in the U.S. and 109% globally. Additionally, those to Liverpool, England, a London alternative, spiked 138% in the U.S. and 97% worldwide, according to Expedia.
The data compared searches in the 12-month period through Aug. 31, 2023, to the same period the prior year.
“TikTok popularized the idea of dupes … and the concept is increasingly taking off in the world of travel,” Expedia said in a report published Wednesday.

Affordability is a top driver of travel dupes

Coroimage | Moment | Getty Images

Affordability is among the top reasons cited by consumers for seeking out these alternate destinations, Expedia said.
“If you are looking to save money on your next trip, consider an alternate destination,” said Hayley Berg, lead economist at Hopper, a travel app. “Oftentimes you can save on airfare and hotel rates by picking a destination off the beaten track.”
For example, the average round-trip flight from the U.S. to Hanoi, Vietnam, is $1,564. Travelers would save money by flying instead to Ho Chi Minh City, where a flight averages $1,326, Hopper said.
In a similar vein, let’s say you’re considering a trip to Spain.
A round-trip flight to Tenerife, in Spain’s Canary Islands, costs $827, on average. Instead, you might consider a trip to Barcelona, a popular metropolis, where a flight costs an average $572, according to Hopper. Likewise, flights to Phuket, Thailand, an island getaway, cost $1,705 round trip, while flights to the capital Bangkok cost $1,404. The Hopper prices are current averages for departures in December to March.

In 2024, Americans are more likely to choose hidden-gem destinations over tried-and-true tourist hotspots for their vacations.

Jon Gieselman
president of Expedia Brands

More Americans planned trips abroad this year as their pandemic-era health fears waned and countries largely reopened their borders to visitors. Americans applied for passports in record numbers in 2022 and 2023.
That surging demand caused prices to surge across the travel spectrum. Airfare to Europe, the most popular destination for U.S. tourists, was the most expensive on record in summer 2023.  
Internet search traffic in the U.S. for travel dupes spiked throughout 2023, peaking in July, according to Google Trends data.

It’s more than just the flight price

However, Hopper flight data indicates that not all dupes will necessarily pay off for travelers. They may need to try a few different alternatives to find savings.
For example, the average round-trip flight from the U.S. to Perth, the aforementioned dupe for Sydney, currently costs $2,389, while a flight to Sydney costs $1,572, according to Hopper. However, travelers who look a bit farther afield — to Nadi, Fiji, or Auckland, New Zealand — would spend $1,365 and $1,394, respectively, Hopper said.
However, dupes aren’t just about the airfare. People traveling off the beaten track can often save on food, hotels and local transportation, said Sara Rathner, travel expert at NerdWallet.

Avoiding “way over-touristed” locales, especially if traveling during peak season, can also be a more enjoyable experience due to smaller crowds, Rathner said.
When picking a “dupe” destination, travelers should research details such as amenities, infrastructure and safety considerations, Rathner added. Reading online travel articles and blogs, and asking friends who may have visited before, can give a general sense as to potential itineraries and the ease of lodging and getting around, she said.
To save money on general travel, try being flexible with trip dates, Berg said. For example, flying on a Tuesday can save you $100 on domestic airfare, while departing Monday through Wednesday can save up to $150 per international ticket, Berg said.
Hotel stays are most expensive Friday and Saturday night. Starting a stay on Sunday can save an average of 25% off weekend rates, she added.Don’t miss these stories from CNBC PRO: More

The average credit card balance is now more than $6,000, the highest in 10 years, a new report by TransUnion found.
Total credit card debt also reached a $1.08 trillion record in the latest quarter, the Federal Reserve Bank of New York reported Tuesday.
Amid persistent inflation, consumers are struggling to afford their everyday expenses, TransUnion’s Charlie Wise says. “They’re trying to keep the house of cards from collapsing.”

Persistent inflation has put many households under financial pressure — more cardholders are carrying debt from month to month or falling behind on payments.
Credit card delinquency rates rose across the board, the New York Fed and TransUnion found.
“These are consumers who are struggling to afford their everyday expenses,” said Charlie Wise, senior vice president of global research and consulting at TransUnion. “They’re trying to keep the house of cards from collapsing.”

“Not only are balances higher but the cost of debt service on those cards is significantly higher,” Wise said.

Credit card rates spiked more than 5% with the Federal Reserve’s recent string of 11 rate hikes, including four in 2023.
Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. As the federal funds rate rose, the prime rate did, as well, and credit card rates followed suit.
More from Personal Finance:62% of Americans live paycheck to paycheckWhy working longer is a bad retirement planCredit scores hit all-time high even as overall debt rises
The average annual percentage rate is now more than 20% — also an all-time high.
At more than 20%, if you made minimum payments toward this average credit card balance, it would take you more than 17 years to pay off the debt and cost you more than $9,063 in interest, Bankrate calculated.
“Basically, for every person who’s using credit cards for convenience and to earn cash back and travel rewards without paying interest, there’s someone else who’s carrying a very expensive balance,” said Greg McBride, chief financial analyst at Bankrate.

Americans are addicted to credit cards, no question.

Howard Dvorkin
chairman of Debt.com

Still, consumers often turn to credit cards, in part because they are more accessible than other types of loans.
“Americans are addicted to credit cards, no question,” said Howard Dvorkin, a certified public accountant and the chairman of Debt.com.
Overall, an additional 20.5 million new credit accounts were opened in the latest quarter, boosted in part by consumers looking for additional liquidity, Wise said. The tally of total credit cards hit a record near 538 million, TransUnion also found.

How to tackle costly credit card debt

“My top tip for paying down credit card debt is to sign up for a 0% balance transfer card,” McBride said.
Cards offering 12, 15 or even 21 months with no interest on transferred balances are out there, he added, and “these allow you to move your high-cost debt over to a new card that won’t charge interest for up to 21 months, in some cases.”
Borrowers may also be able to refinance into a lower-interest personal loan. Those rates have climbed recently, as well, but at 11.5%, on average, are still well below what you currently have on your credit card.
Otherwise, ask your card issuer for a lower annual percentage rate. In fact, 76% of people who asked for a lower interest rate on their credit card in the past year got one, according to a LendingTree report.
Subscribe to CNBC on YouTube. More

Global sales for lab-grown diamonds increased to $12 billion in 2022, up 38% year over year, per an analysis by New York-based Paul Zimnisky, a diamond industry analyst.
Jewelry shoppers increasingly have opted for these machine-made gems over mined diamonds because they are visibly and chemically identical — but cost far less. 
However, as lab diamond prices continue to fall, their value will not hold up as well long term as a natural diamond.

Tom Werner | Digitalvision | Getty Images

If your partner got down on one knee and asked you to marry them today, would you say yes? What if you found out the ring destined for your finger boasts a lab-grown diamond?
The chances of that engagement ring bearing a man-made diamond are higher than you might think. 

Global sales for lab-grown diamonds increased to $12 billion in 2022, up 38% year over year, per an analysis by New York-based Paul Zimnisky, a financial and diamond industry analyst.
More from Personal Finance:Borrow for your wedding, have ‘a macaroni-and-cheese marriage’Gen Z, millennial couples say it’s too expensive to get marriedCouples leverage ‘something borrowed’ to cut wedding costs
Ring shoppers have opted for these gems — created by subjecting pure carbon to extremely high heat and pressurization by machine — over mined diamonds because they are visibly and chemically identical but cost way less. 
The catch? They don’t increase in value at all.
“It’s very difficult to resell a lab diamond, and as the price gets lower, I don’t think there’s going to be a resale market for lab diamonds,” Zimnisky said.

As the so-called engagement season — or the time between Thanksgiving and Valentine’s Day, according to wedding site The Knot — approaches, consumers on the market for diamonds should look at a few considerations on what sort of jewels to invest in.

Diamonds ‘a winner during the pandemic’

Consumers may have gotten federal stimulus money back in 2020 during the Covid-19 pandemic, but some “experiential luxury” such as travel and dining was still restricted due to lockdowns and other regulations. Americans instead redirected their discretionary spending to hard luxury goods such as diamonds.
“Diamonds were kind of a winner during the pandemic,” Zimnisky said.

But the Covid-19 pandemic soon presented a separate challenge: a sharp decline in dating, leading to a drop in engagements.
Engagements typically occur within three years of a first date, per Signet Jewelers, the largest diamond conglomerate in the U.S. and parent company of retailers Kay Jewelers and Zales.
As fewer couples went out on dates in 2020, fewer got engaged in the last two years.
However, the company expects engagements to rebound in the coming years.

The rise of lab-grown diamonds

Meanwhile, the industry of lab-grown diamonds is “growing so rapidly that I would currently describe the market as a bubble,” Zimnisky said.
The man-made diamond market is forecast to reach $18 billion in total value by 2024 as both the overall industry and supply volumes continue to grow. But as prices for man-made diamonds begin to decline, the industry is going to attract a different consumer.
“There’s a lot of consumers that would love to buy diamond jewelry but maybe cannot afford it at $1,000 price points but can afford it at $100 price points,” Zimnisky said.
If the industry starts to get oversaturated, man-made diamonds might come to be considered “costume jewelry” in the future, said Benjamin Khordipour, manager of Estate Diamond Jewelry in New York.

‘People don’t buy them because they’re cheap’

Cavan Images | Cavan | Getty Images

Traditional mined diamonds are not a practical purchase, Zimnisky added.
“People don’t buy them because they’re cheap; they buy them because it makes them feel good, it’s an emotional purchase, a financial sacrifice,” he said.
If you opt for a lab-grown diamond, go into the store with the expectation that it — unlike a mined diamond — probably won’t have any resale value.
“I know most consumers aren’t thinking about that when they’re getting an engagement ring, but that’s just the big takeaway,” Zimnisky said.

On the other hand, if you’re planning on investing in a natural diamond, be very realistic with your budget, Khordipour said. Come to a realistic price point you can afford with your lifestyle.
While financing options such as wedding loans exist, it may be in your best interest to avoid going into heavy debt for a ring, he said.
If you don’t have enough savings for the ideal ring, adjust to something smaller and upgrade to a grander gesture in 10 years, Khordipour suggested.
In the end, make sure you have the discussion with your loved one and come to an agreement that makes the most sense for your preferences and financial goals.Don’t miss these stories from CNBC PRO: More