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In addition to the standard fees, even the most amicable divorces tend to accumulate some add-ons.
Review your “divorce landscape” to determine how attitudes might impact the financial toll a divorce takes.
Then estimate the new costs of a single lifestyle, weigh the tax implications and be sure to seek professional help.

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Love may not cost a thing, but divorce can come with a hefty price tag.
Most people considering divorce go in with the understanding that it’s going to come with a cost, but many — particularly those pursuing a contested divorce — can experience massive sticker shock when those costs begin to add up during the process.

The majority of these fees simply can’t be avoided, but understanding what to expect can help you better plan for the process. Attorney fees and court fees are a given and can run anywhere from $5,000 to $50,000-plus, depending on factors such as geographic location (divorce is generally more expensive on the coasts), whether the divorce is highly contested, the complexity of the issues, how much litigation is involved and more.
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In addition to the standard fees, even the most amicable divorces tend to accumulate some add-ons. Below are some of the common-but-unexpected costs you may encounter.

Review your divorce landscape

Scenarios like these add more than emotional tension to the situation and can take extra resources to resolve. Expert witnesses, forensic accountants and psychological evaluations are all investments that may add value to your case and more, but the costs can add up, so surveying your unique landscape will help prepare you for what resources will be necessary to chart a path to the other side.
Uncovering potential hidden costs can begin with surveying the landscape of your divorce — determine who the players are, what the climate is, and who you may need to help guide the journey in addition to your attorneys.

The way in which you and your soon-to-be-ex approach your divorce will have a big impact on the final price tag. Mediation and other alternative dispute resolution strategies can save money, but they may also require compromise you aren’t necessarily considering. If you decide that bridging the divide on major financial and custodial issues isn’t possible without litigation, additional expenditures will likely arise.
If your divorce is contested or your partner isn’t cooperative, it’s important to prepare your financial mindset accordingly. Is your spouse the type to hide money or assets? Budget for some forensic accounting. Special subpoenas may be needed to ensure that bank statements and business documents, such as profit-loss statements, along with other important financial documents, are available and accounted for.
When it comes to children, if you and your spouse share similar expectations for custody, the matter can be straightforward to resolve. But if you’re not on the same page, or there are additional issues such as allegations of domestic violence involved, the services of custody experts and other evaluations may be called for.

The literal cost of moving on

You may be very eager to start the next phase of your life, separate and apart from your ex, but if you and your spouse intend to sell shared property and split the profits, it may make sense to discuss the logistics now. Dividing shared assets such as a primary or vacation home, art collections, cars or other big-ticket items requires investment on the front end — whether it’s a real estate attorney, appraisals and/or closing costs. Something as straightforward as transferring title to real property still comes with a fee.

Even without having to negotiate buying and selling a property, chances are that if one of you is keeping the property, the other is likely moving out. Moving expenses and other relocation costs such as deposits or down payments, setting up utilities, storage and more may not be on the top of your list when thinking about costs as you begin the divorce process.
Beginning to put time into researching these lesser, but still accumulating, costs can be a big help when considering the whole financial picture.

Know the tax consequences

If you’ve previously enjoyed tax savings from joint filing and/or claiming child-related tax benefits, your first “single” tax bill may be very different from what you’re used to. Many child-related tax benefits such as dependent or education credits can only be claimed by one filer, so you may want to plan ahead and address this in your settlement agreement. Without a thorough agreement, you could be left in the lurch if your ex-spouse files before you do or if there’s no clarity on how and when these benefits can be utilized.
Taxes are complex, so it may benefit you to take a collaborative approach with other professionals early in the process. Your divorce attorney can work with financial and tax advisors so you are clear on the tax implications and how you can plan ahead.

Learn to live with higher lifestyle costs

Splitting lifestyle expenses with your spouse, such as insurance, utilities and even your Netflix and Hulu subscriptions, likely resulted in cost savings. Keep in mind that when the marriage ends and your household divides, so will benefits such as family plans and multiple-car discounts. While this might seem obvious — and minor compared with other costs — the reality of paying for everything from vacations to health insurance to home appliance repairs independently often takes people by surprise.
Therapists, business coaches and life coaches can offer invaluable advice to help you find your footing in this new phase of your life, but if you plan to utilize their services, be sure to add these fees to your divorce budget. If possible, consider working with providers who offer flat rates to make your budget more predictable.

How to best prepare your budget and mindset

Skynesher | E+ | Getty Images

The financial aspects of divorce can become less stressful when you take stock of everything before filing.
Seek professional financial guidance if you can. An extra pair of trained eyes can offer substantial benefits both for your daily budget and your new long-term financial outlook. If possible, consult with a financial planner who can offer steps to improve your money management.
If you don’t have an accountant, seek one out promptly. This is especially crucial for anyone who owns a business or manages large investments. Introducing your team to each other, so your attorney can coordinate with other professionals in your life, can make settlement negotiations, or ultimate outcomes, that much easier to navigate.
There are also many things you can do independently as you prepare to transition to a one-income household. From collecting and reviewing copies of bank statements, shared bills and other financial documents to requesting new quotes from insurance and service providers, the more organized and informed you are heading into the divorce, the more prepared you’ll feel.
Taking these steps to be proactive, rather than reactive, will help you minimize stress and stay focused on your future when unexpected costs arise.
 — By Jamie Berger and Sarah Jacobs, founders of New Jersey-based matrimonial and family law firm Jacobs Berger

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An EV600 all-electric light commercial vehicle purpose-built for the delivery of goods and services, built by GM’s electric commercial vehicle business, BrightDrop, is seen in Detroit, Michigan, in this undated photograph.
Brightdrop | Handout | via Reuters

Layoff announcements and warnings of an economic downturn from multiple CEOs during the earnings season have made it difficult to look beyond the ongoing turmoil and pick good stocks for the long term. 
To help with the process, here are five stocks chosen by Wall Street’s top pros, according to TipRanks, a platform that ranks analysts based on their track records.

Walmart

Walmart (WMT) topped analysts’ expectations for the fiscal fourth quarter as budget-conscious customers preferred to shop at the big-box retailer due to its lower-price offerings. However, it issued a subdued sales outlook, as stubbornly high inflation continues to impact spending on discretionary items.
Nonetheless, Guggenheim analyst Robert Drbul noted that Walmart is starting the new fiscal year on “solid competitive and operational footing.” The analyst also highlighted the retailer’s market share gains in grocery, growth in private brands and the improvement in inventory levels.
“We continue to believe Walmart is well positioned in an uncertain macro environment, with its price and value proposition and with increased convenience and assortment, despite persistent indicators of pressure on the consumer, including stubborn food inflation,” Drbul said.
The analyst also thinks Walmart can gain more business from higher income families “because the company has made strides in pickup, delivery, and membership.” Drbul reiterated a buy rating on Walmart and a price target of $165.
Drbul ranks 247th among over 8,300 analysts on TipRanks. Moreover, 65% of his ratings have been successful, with each generating a 9.8% average return. (See Walmart Hedge Fund Trading Activity on TipRanks.)

Crocs

Casual footwear maker Crocs (CROX) is seeing robust demand for its products despite difficult macro conditions. Its fourth-quarter revenue surged 61%, reflecting organic growth and the momentum of the Heydude brand, which the company acquired in 2022.  
While Crocs acknowledges the macro headwinds affecting it, it is confident about achieving a record 2023, fueled by demand for its sandals, international growth potential of the Crocs brand and higher market penetration of the Heydude brand in the U.S.
Reacting to the results, Baird analyst Jonathan Komp commented, “The Q4 update included multiple positive developments, including stronger-than-expected Q4 EBIT margin performance, continued robust brand momentum, and reassuring 2023E EPS guidance which is front-weighted and includes multiple areas of conservatism.”
Komp raised his 2023 and 2024 earnings per share estimates, stating that Crocs remains a “favorite idea” at current valuations, given the company’s multiyear growth potential. He reiterated a buy rating and increased his price target to $175 from $155.      
Komp holds the 386th position out of more than 8,300 analysts followed on TipRanks. His ratings have been profitable 54% of the time, with each rating generating a 13.8% average return. (See Crocs Blogger Opinions & Sentiment on TipRanks)

The Chefs’ Warehouse

Another company that has displayed strength amid difficult conditions is Chefs’ Warehouse (CHEF), a distributor of specialty food products. It distributes over 55,000 products to more than 40,000 locations in the U.S. and Canada.
Chefs’ Warehouse’s fourth-quarter adjusted earnings per share surged nearly 85% year over year, driven by robust sales and improved margins. The company has been boosting its business through organic growth and key acquisitions. In the fourth quarter, the company acquired Chef Middle East, which helped it expand into new markets like United Arab Emirates, Qatar and Oman.
Following the fourth-quarter results, BTIG analyst Peter Saleh reiterated a buy rating and “Top Pick” designation on CHEF, with a price target of $48. Saleh, who ranks 346 out of 8,341 analysts tracked by TipRanks, thinks that “continued sales and earnings progression builds out the company’s favorable long-term potential.”
Saleh noted that the company is “still undervalued given the consistent growth it is achieving.” He also pointed out that investors misunderstood the recent convertible notes issuance, stating, “We believe investors missed the technical details in the filing that place the dilution overhang much higher than the stated conversion price. In our view, this could act as a tailwind for the shares in the near-term.”
Saleh’s ratings have been profitable 65% of the time and each rating has generated a 12.5% return, on average. (See Chef’s Warehouse Stock Chart on TipRanks)

Datadog

Next on our list is cloud-based software company Datadog (DDOG), which recently reported market-beating fourth-quarter results. That said, investors were spooked by its revenue outlook for the first quarter and full year 2023. Macro uncertainties are impacting the cloud spending of Datadog’s larger customers, thus affecting its expansion rate.
Baird analyst William Power lowered his 2023 revenue estimate based on the company’s outlook. He also reduced his operating income forecast to reflect continued growth investments made by the company. (See Datadog Insider Trading Activity on TipRanks)
Nevertheless, Power remains bullish about the long-term prospects of Datadog, as the company has “one of the broadest platforms and a strong R&D engine.” The analyst also noted “strong enterprise trends,” with the company ending the fourth quarter with nearly 2,780 customers contributing annual recurring revenue of $100,000 or more, up from 2,010 customers last year.
Power maintained a buy rating on Datadog and a $100 price target. He ranks 268 among more than 8,000 analysts tracked on TipRanks. Moreover, 55% of his ratings have been profitable, with each rating generating a return of 15.5%, on average.    

Applied Materials

Applied Materials (AMAT) provides manufacturing equipment and software to makers of semiconductors, electronic devices and related industries. Despite the ongoing challenges in the semiconductor space, the company delivered better-than-expected fiscal first-quarter earnings.  
Cheering the results, CEO Gary Dickerson stated that the company’s resilience is backed by its “strong positions with leading customers at key technology inflections, large backlog of differentiated products and growing service business.”
Needham analyst Quinn Bolton increased his price target for Applied Materials to $135 from $120 and reiterated a buy rating following the recent results. Bolton noted that ICAPS (chips for IoT, Communications, Auto, Power and Sensors) “stole the show” in the report. (See Applied Materials Financial Statements on TipRanks)
“ICAPS was the main focus on the call as it was mentioned 56 times and rightfully so. AMAT has become incrementally more positive on ICAPS than it was last Q, as it is set to grow Y/Y in 2023 even in the face of China export restrictions,” Bolton said.
He further explained that the market growth of ICAPS is way higher than the leading edge chips this year due to “end market strength, higher capital intensity, and government incentives.”
Bolton’s convictions can be trusted, given that he is ranked number 1 among more than 8,300 analysts in the TipRanks database. Additionally, his track record of 70% profitable ratings, with each rating delivering an average return of 39.8%, is laudable.

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Hiring a top interior designer is a luxury few consumers can afford, but there’s a growing number of services available to virtually decorate your space for less.
The Expert, for example, offers one-hour consultations with A-list decorators for $1,000 to $2,000.
For consumers who want help but may not have the means or access to a full-service design firm, “we are bridging the gap,” said The Expert’s CEO Leo Seigal.

A renovated apartment in New York City after The Expert consultation sessions with designers Jessica Gersten and Athena Calderone.
The Expert

Aside from bingeing Netflix, creating the picture-perfect home may have been the pandemic’s most popular habit.
Whether it’s organizing a pantry or adding on a home office, gym or spa-like bathroom, homeowners have been upgrading and expanding their spaces at record rates for over two years. 

Although Americans are no longer sheltering at home, the recent rise in mortgages rates has encouraged more people to stay put and renovate rather than relocate.
Even in the face of inflation, ongoing supply chain issues and other factors, the vast majority of homeowners are proceeding with their planned home improvement projects in 2023, according to a Houzz survey of nearly 4,000 homeowners conducted in October.
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At the same time, Instagram and other social media platforms have raised the bar by presenting an endless array of covetable spaces.
For most people, decorating is a daunting task, yet hiring a pro is out of reach.

Few Americans can afford the high-end look depicted online, which often comes with the help of an A-list designer and hefty budget. The average cost to hire an interior designer can vary greatly depending on the region and scope and whether it’s based on a flat rate, hourly fee or percentage of the project, although well-known designers easily charge in the five or six figures.
“It’s a time-consuming and overwhelming process for a lot of homeowners,” said Wayne Gao, co-founder and CEO of Australia-based Furnishd, which offers virtual consultations for $850 per room or $3,250 for the whole house. “It also costs a fortune.”

Virtual design services offer real-world pricing

That’s where virtual services can add value at a fraction of the cost, added Leo Seigal, co-founder and CEO of The Expert. “It’s almost like insurance to make sure you are making the right decision.”
The Expert was started by Seigal and Los Angeles-based interior designer Jake Arnold in early 2021. The service offers one-on-one consultations with over 150 big-name decorators including Arnold, Martin Brudnizki, Brigette Romanek, Ashe Leandro and Rita Konig. Prices range from $250 for a 25-minute call to up $2,000 for an hour.
Of course, online design help is not new. Even before 2020, there were services like Havenly and Homepolish. Retailers such as West Elm and Restoration Hardware offer those services, as well. However, now A-list decorators are getting into the game.
“The pandemic turbocharged interior design and created the environment to get the designers to do this in the first place,” Seigal said.

Americans are also prepared to shell out more based on what they see on sites like TikTok, Instagram and Facebook. Consumers are now conditioned “to believe they can get whatever they want, whenever they want,” according to an analysis by McKinsey & Company.
However, home upgrades are another level of spending altogether.
“Any renovation has the potential to get really expensive,” Seigal said. “You can’t really afford to make a mistake.”
For consumers who want help but may not have the means or access to a full-service design firm, “we are bridging the gap,” he said.

The pandemic turbocharged interior design and created the environment to get the designers to do this.

Leo Seigal
co-founder and CEO of The Expert

Other top designers, too, have spun off their own virtual consulting service to meet the demand for a less expensive and more accessible option.
Marianne Brown, the principal designer and owner of W Design Collective, also now offers virtual design help starting at $500 for a one-hour call, in addition to the high-end remodels and full-service projects she’s known for, which cost substantially more.
“I couldn’t even afford myself,” she said, referring to the latter.
More recently, however, Brown said she’s wrestled with the effect that the constant stream of home upgrades on social media has on homeowners and women, in particular.
“At least when Vogue tells you your skinny jeans are ‘out’ you are only donating a $50 pair of jeans to Goodwill,” she said. “But when Architectural Digest tells you white kitchens are ‘out,’ you are hiring a painter for $8,000 to repaint your kitchen cabinets.”
Brown advises homeowners to resist the urge to keep up with the Joneses. Rather, she says consider how you will use the space and make sure it reflects your personality. “What have I always loved? Where do I come from and where have I traveled? Stay true to who you are.”
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The Black Lives Matter movement has helped upend the idea of representation in the art market.
More Black artists are showing in galleries and museums, which has translated into higher sales.
“There’s a lot more support for Black artists,” one painter says.

People walk past a mural of George Floyd by the Cup Foods where he was killed by Minneapolis Police Officer Derek Chauvin in Minneapolis.
Sopa Images | Lightrocket | Getty Images

When George Floyd was murdered by police in 2020, the event brought a “scary” time for the Minneapolis neighborhood where it occurred.
“Everything was on fire,” said Lamar Peterson, a contemporary art painter who lives less than a mile from the scene.

“You couldn’t have your windows open because of the smoke,” Peterson said. “It just felt like it was Armageddon, the end of times.”
The streets were filled both with protesters and also looters, Peterson remembers.
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For Peterson, it was a personally difficult for another reason: Due to the lockdown at the time, he lost access to his studio based in the University of Minnesota building where he teaches.
Peterson, 49, an oil painter, was unable to do his work at home in a closed space.

“That was really hard for me,” Peterson said. “My outlet is my artwork.”
Today, Peterson has recently wrapped up his latest show at the Fredericks & Freiser art gallery in the Chelsea neighborhood of New York.
The works are the opposite of the dark time he lived through in 2020, with bright garden landscapes and Black figures that draw inspiration from the 1970s and 80s cartoons that Peterson grew up on.

Arrows pointing outwards

The Proud Gardener, Bouquet, 2022, by Lamar Peterson Oil on canvas 60 x 72 inches
Cary Whittier; Courtesy Fredericks & Freiser, NY

The paintings are about appreciating the fleeting beauty in life, he said, inspired by his own love of gardening and his father’s recent death.
“Flowers can be a metaphor for human life, too,” Peterson said. “There’s a beginning and an end.”
The show, titled “Proud Gardener,” sold “very well” and is one of Peterson’s most successful shows to date, according to Andrew Freiser, a co-owner of the gallery. Prices for the works ranged from $15,000 to $60,000, depending on size.
Peterson, who started showing his work in the early 2000s, has noticed a shift in the art market.
“There’s a lot more support for Black artists that kind of came out of George Floyd’s murder and institutions realizing that they need to do more,” Peterson said.

‘Absolutely genuine’ rise in interest in Black artists

Artist Kehinde Wiley, left, shakes hands with Barack Obama at the unveiling of his portrait of the former president at the Smithsonian’s National Portrait Gallery in Washington, D.C., on Feb. 12, 2018.
Saul Loeb | Afp | Getty Images

The market for work by Black American artists grew by nearly 400% between 2008 and 2021, according to a recent report from art market website ArtNet.
However, art in that category represented just 1.9%, or $3.6 billion, of global auction sales between 2008 and mid-2022, the report found.
The growth has not been consistent, according to ArtNet. Acquisitions of work by Black American artists peaked in 2015, two years after the start of the Black Lives Matter movement.
Still, there continues to be a higher interest in African American artists that is “absolutely genuine,” according to Sophie Neuendorf, vice president at ArtNet.
“Museums face a lot of criticism for showing primarily male white artists,” Neuendorf said.

There are a lot of artists that I think have risen to a level of prominence that have really placed them at the center of the contemporary art narrative.

Drew Watson
head of art services at Bank of America

“There’s been a real effort to consciously show more exhibitions of female, as well as African American artists,” she said.
That “sea change” in recent years has prompted museum shows of artists including Kerry James Marshall, Michael Armitage, Lynette Yiadom-Boakye and Jennifer Packer, noted Lucius Elliott, head of The Now Evening Auction at Sotheby’s, which focuses on contemporary works.
“My impression is there are vastly increased number of solo shows and group shows dedicated to Black artists in London, in Paris, in New York, across the United States,” Elliott said.
“Something fundamental has shifted here, and that’s driven I think more than anything by a desire to correct or redress a historical oversight, both in the market, but also for institutional representation,” Elliott said.
Other Black artists have gained importance, including Kehinde Wiley, who painted a portrait of former President Barack Obama, and Hank Willis Thomas, who sculpted the statue “The Embrace,” of Martin Luther King, Jr., and Coretta Scott King that was recently unveiled in Boston.

“There are a lot of artists that I think have risen to a level of prominence that have really placed them at the center of the contemporary art narrative,” said Drew Watson, head of art services at Bank of America.
Works from established artists like Kerry James Marshall that depict Black figures are influencing the work of new artists and creating a lineage, Elliott noted.
“These are not images of degradation, but they’re images of dignity,” Elliott said.
Painter Xavier Daniels’ most recent show titled “Cry Like a Man” features portraits of Black men with vivid colors like purple, blue and white, meant to convey royalty, freedom and purity.

Prices for the works at the Black-owned Richard Beavers gallery in New York’s SoHo neighborhood ranged from between $30,000 to $42,000.
The male portraits are inspired by other Black men with whom Daniels, 42, had either worked during his 13-year career as a firefighter or been a student at an all-male predominantly Black college, he said.
The works in the recent show also touch on the mental health struggle Black men go through, with portions of some of the faces missing to reflect how negative stereotypes may lead them to not feel whole.
At the same time, the figures are empowered and free to be themselves, Daniels said.
“I’m just taking our experiences and creating art and a language I feel would help other Black males feel great about who they are,” he said.

Tips for investing in art
If you think you may want to invest in art, experts have some tips for getting started.

Look before you buy: Before you purchase any art, it is a good idea to take your time, go to galleries in person, see a lot of works, according to Freiser, the co-owner of the namesake Chelsea gallery. Ideally, you should look over at least several show cycles to decide what you like, he said.”There’s no way to look at art over a period of time without having your eye develop,” Freiser said. Bank of America’s Watson said he has met collectors who waited five years before making their first art purchase, which allowed them to train their eye and develop relationships with dealers and auction houses.”When that time does come and you are ready to take the plunge, you’ve done your homework,” Watson said.
Be realistic about appreciation: At Bank of America, art is not considered a pure investment, though it is an asset class, according to Watson. As such, the asset class wouldn’t be subject to quarterly reviews, like stocks and bonds, he said. It also comes with greater transaction costs, specific tax treatment and costs to conserve it.”When you think about it, it’s actually a cash flow negative asset,” Watson said. Whether or not a piece becomes more valuable varies on a case-by-case basis.”If you’re buying from an artist who’s up and coming, and you see that pop, it can certainly happen,” said Jocelyn D. Wright, a certified financial planner and managing partner at PF Wealth Management Group in Jenkintown, Pennsylvania.
Buy what you like: “My advice would be to always collect for passion, but with an investment view,” said Neuendorf, the ArtNet VP. If you’re going to display the work in your home, you want to be sure you like it, while also thinking of it as an investment, according to Wright. Also be sure to find out the artists’ stories when acquiring new pieces, she said.
Adjust your financial plan: Once you make a purchase, be sure to get it appraised, Wright said. Add the work to your homeowner’s insurance policy, or consider a separate policy to protect its value, she said. Also be sure to budget for other costs, like framing or other features that may help protect the work.Keep in mind that art investments tend to be illiquid. If you try to sell a work quickly, you may not get the full value, Wright noted. “It would certainly be the item of last resort to try to liquidate,” she said.
Cultivate relationships: Art dealers are looking for buyers who are going to be on the artist’s team, according to Freiser. Being open to lending the working for exhibits and acquiring other work from the artist are among the qualities sellers look for, he said.”We’re looking for a smart collector who’s interested in putting a collection over a period of time that brings value to the art as much as the art brings value to them,” Freiser said. –L.K.

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The average interest rate on typical 30-year mortgages has stayed between 6% and 7% for the last several months, roughly double what it was at the end of 2021 and early 2022.
The median home price in January was $383,000, which is about 1.5% higher than a year earlier.
Here’s what to know about how your credit score affects the interest rate you can qualify for.

Phiromya Intawongpan | Istock | Getty Images

Anyone who’s exploring homeownership may know that rising interest rates and elevated home prices are making that goal challenging.
The average rate on a typical 30-year, fixed-rate mortgage has been zigzagging between 6% and 7% for the last several months — down from above 7% in early November but roughly double the 3.3% average rate heading into 2022, according to Mortgage News Daily.

Yet the interest rate that any particular buyer is able to qualify for depends at least partly on their credit score — meaning you have some control over whether you’re able to get the best available rate, experts say. And the difference that a good or excellent score makes in terms of monthly payments — and total interest paid while you hold the mortgage — can be significant.
“The score impacts practically everything: loan approval, interest rate, monthly mortgage insurance premiums … and ultimately their payment,” said Al Bingham, a credit expert and mortgage loan officer with Momentum Loans.
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The median home price in January was about $383,000, according to Redfin. Although prices have been sliding since mid-2022, that amount is still 1.5% higher than a year earlier. In January 2020, the median was below $300,000.
While you may be able to negotiate on the price of the house to bring the overall cost of homeownership down, it’s also worth making sure you go into the process with as high a credit score as possible.

Lenders check three scores but use one number

Although things like steady income, length of employment, stable housing and other aspects of your financial life are important to lenders, your credit score gives them additional information.
The three-digit number — which ranges from 300 to 850 — feeds into a lender’s calculation of how risky a borrower you may be. For example, if you’ve always made your debt payments on time and you have a low credit utilization (how much you owe relative to your available credit), your score will benefit.
And the higher the number, the less of a risk you are to lenders — and therefore the better terms you can get on a loan.

Lenders check a homebuyer’s credit report and score at each of the three large credit-reporting firms: Equifax, Experian and TransUnion. For mortgages, the score provided by those companies is typically a specific one developed by FICO, because it is the score currently relied on by Fannie Mae and Freddie Mac, the largest purchasers of home mortgages on the secondary market. (In the coming years, this reliance on one score is poised to change.)
However, because that particular FICO score can differ among the three credit-reporting firms due to differences in what is reported to them and the timing, mortgage lenders use the middle number to inform their decision.

The higher your score, the lower the interest rate you’ll be charged. For illustration only: On a $300,000, fixed-rate 30-year mortgage, the average rate is 6.41% (as of Thursday) if your credit score is in the 760-to-850 range, according to FICO.
This would make your monthly principal and interest payment $1,878. On top of this amount typically would be property taxes, homeowners insurance and, if your down payment is less than 20% of the home’s sale price, private mortgage insurance.
In contrast, if your score were to fall between 620 and 639, the average rate available is 7.99%. That would mean a payment of $2,201 (again, for principal and interest only).

Most of your monthly payment goes to interest at first

Because of how loans are structured, most of your monthly payment would go to interest at the beginning of the loan instead of toward the principal.
For example, if you started paying on that $300,000 mortgage next month with a rate of 6.41%, in two years you would have paid $39,600 in interest and just $7,438 toward the principal, according to Bankrate’s mortgage calculator.
In comparison, a rate of 7.99% would mean that in two years, you would have paid $49,570 in interest and $5,455 toward the principal, according to the Bankrate calculator.

There are ways to boost your credit score

If you want to get your score up before applying for a mortgage, there are some key things you can do.
“Improving your credit score really comes down to the fundamentals,” said Ted Rossman, senior industry analyst for Bankrate. “You should aim to pay your bills on time, keep your debts low and show that you can successfully manage a variety of types of credit over the long haul.”
And, he said, there are some things you can do to improve your score fairly quickly.

“My favorite is to lower your credit utilization ratio,” Rossman said, referring to credit card balances. “This resets every month and it typically reflects statement balances, so you might have a high utilization ratio even if you pay your credit cards in full to avoid interest.”
You may want to consider making an extra mid-month payment or asking for a higher credit limit to bring the ratio down, he said.
“It’s often recommended to keep [the ratio] below 30%, although below 10% is even better, and your credit score should improve as long as you bring it down,” Rossman said.
He also recommends checking your credit report — which you can do for free at annualcreditreport.com — before applying for a mortgage. “Look for any errors and correct them as soon as possible,” he said.

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An employee with a face mask and shield cleans the door of Bath & Body Works store on July 21, 2020 in Pembroke Pines, Florida.
Johnny Louis | Getty Images News | Getty Images

Company: Bath & Body Works (BBWI)

Business: Bath & Body Works operates a specialty retailer of home fragrance, body care, soaps and sanitizer products. In August 2021, Bath & Body Works (formerly known as L Brands) completed the separation of its Victoria’s Secret business. 
Stock Market Value: $9.68B ($42.42 per share)

Activist: Third Point

Percentage Ownership:  6.02%
Average Cost: $38.16
Activist Commentary: Third Point is a multi-strategy hedge fund founded by Dan Loeb. The fund selectively takes activist positions. Loeb is one of the true pioneers in the field of shareholder activism and one of a handful of activists who shaped what has become modern-day shareholder activism. He popularized the poison-pen letter at a time when the measure was often necessary. As times have changed, he has transitioned from the poison pen to the power of the argument. Third Point has amicably obtained board representation at companies like Baxter and Disney, but also will not hesitate to launch a proxy fight if the firm is being ignored. 

What’s Happening?

Third Point initially filed a 13D on Bath & Body Works (“BBWI”) on Dec. 8, 2022, and expressed its concern with the company’s executive compensation structure, its financial discipline, investor communication and board composition. On Feb. 22, Third Point sent a letter to BBWI’s board announcing that it intends to nominate a slate of director candidates for election. Third Point believes that additional oversight is required on the board when it comes to corporate governance, executive compensation and shareholder rights.

Behind the Scenes

Last May, BBWI’s CEO Andrew Meslow stepped down from his position, citing health reasons. The board, chaired by Sarah Nash, named her as interim CEO. In its announcement, the company stated that Nash currently served as the CEO of privately held Novagard Solutions, a company that manufactures silicone coatings and sealants. As part of this appointment, BBWI agreed to increase Nash’s annual compensation as chair of the company to $1,000,000 from $700,000 during the time she served as interim CEO. Additionally, the company agreed to pay her an annual base salary of $1,350,000 and a short-term performance incentive compensation target of 190% of her base salary for her work as interim CEO. The situation became egregious when the board, in addition, awarded her $18 million of restricted stock units on March 11, 2022. She would receive this $18 million regardless of how long she served as interim CEO. Ultimately, she served as interim CEO for a full seven months for the $18 million.

Would this have happened if an activist were on the board? We don’t think so. As an example, in April 2019, ABB chairman Peter Voser stepped in as interim CEO of ABB. He did not receive any increase to his compensation as chairman and he received the same salary and short-term incentives as the prior CEO and no additional long-term incentive grants or benefits, except those legally required. He served as interim CEO for 11 months and received total compensation of $4.2 million, which was $3.3 million less than the prior CEO and $1.7 million less than the permanent CEO succeeding him. ABB was a $50 billion company at the time. BBWI is a roughly $10 billion company. Further, Voser did not have another full-time job back then. For the $4.2 million, he agreed to devote his full attention to ABB. One other thing – Lars Förberg, co-founder and managing partner of activist fund Cevian Capital was on the board of ABB at the time.

Third Point also takes issue with the fact that the BBWI board does not designate Nash as an executive chair even though she is receiving $18 million in stock grants vesting over the next three years. Third Point believes that $6 million of compensation per year renders a director non-independent. We would tend to agree with that. Let’s look at another example. Richard Dreiling is designated as the executive chair of Dollar Tree because he is paid a salary of $1 million per year and has stock options to acquire 2.25 million shares of stock at the company’s all-time highest closing price, vesting over five years. Before negotiating that deal, the board reached out to shareholders owning more than 50% of their stock. The dominant theme from that outreach was that the company should do whatever was necessary to secure Dreiling’s services as the company’s top executive for a multi-year period. This is just good corporate governance. Having previously grown Dollar General from a $4.5 billion company to a $25 billion company in seven years as its CEO, Dreiling was imminently qualified for this position. He also did not have another full-time position, and Dollar Tree is a $30 billion company. Finally, Paul Hilal, founder and CEO of activist investor Mantle Ridge was on the board, brought on Dreiling and led the board in structuring and negotiating this entire arrangement.
In contrast, the BBWI board did not appear to reach out to shareholders, did not have an activist or any shareholder representative on the board and seemed to enter an “arms-length” negotiation between Nash and the board she leads. That is how you reach an $18 million payment for seven months of work while holding on to your full-time job. So, Third Point is now going to make a books-and-records request under Delaware law to assess the information the board relied on to justify this payout. My guess is that the support for this decision will be underwhelming.
The Nash-led BBWI board is now doing whatever it can to protect itself from having a shareholder representative on the board. And when I say, “whatever it can,” I mean the very least the board thinks it has to do to win. We often see this in activist campaigns at companies with inexperienced and/or entrenched boards. In this case, the board is “refreshing” its membership by adding two new directors to the 12-person board. This allows the board to continue with business as usual, while at the same time enabling it to go before Institutional Shareholder Services and argue that there is no need for a Third Point representative on the board because it has been refreshed. However, when a board has egregious corporate governance practices, its members are the last people you want to appoint new directors. A board like this will need a lot more refreshment than just two additional directors.
The company may also argue that it received an approval vote of over 95% on its most recent say-on-pay proposal in 2022. This vote was entirely focused on 2021 pay and did not include Sarah Nash as a named executive officer. Furthermore, ISS recommended voting “for” on say on pay, but also said that the $18 million Nash award and her overall compensation as interim CEO will be analyzed next year.
Third Point’s Loeb popularized the poison-pen letter at a time when it was needed. As times have changed, he has transitioned from the poison pen to the power of the argument. Third Point’s letter to BBWI is evidence of that. Third Point has amicably obtained board representation at companies like Baxter and Disney, but the firm will not hesitate to launch a proxy fight if it isn’t being heeded. Often the difference between amicable activism and confrontational activism is the response of the company. It is up to the company as to how adversarial this engagement gets. It is often difficult in activist campaigns to identify who is wearing the black hat and who is wearing the white hat. In this situation, it seems obvious. Large institutional shareholders and ISS will not condone egregious corporate governance. If this goes the distance, we believe Third Point will show the BBWI board how powerful a good argument is.
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.

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Some Treasury bills, or T-bills, are now paying 5% after a series of interest rate hikes from the Federal Reserve. 
You can buy T-bills through TreasuryDirect, a website managed by the U.S. Treasury Department, or a brokerage account.
However, there are a few things to know about each purchase option, financial experts say.

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With some Treasury bills now offering 5%, the assets have become more appealing to investors. But there are a few things to know about the purchase process, experts say.
Backed by the U.S. government, Treasury bills, or T-bills, are nearly risk-free, with terms of four weeks to 52 weeks. You receive T-bill interest at maturity, which is exempt from state and local taxes.  

After a series of rate hikes from the Federal Reserve, T-bills have become a competitive option for cash, with some T-bills paying more than 5%, as of Feb. 24.
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However, there’s not a direct rate comparison with other products because T-bills are typically sold at a discount, with the full value received at maturity, explained Jeremy Keil, a certified financial planner with Keil Financial Partners in Milwaukee.
For example, let’s say you purchase $1,000 of one-year T-bills at a 4% discount, with a $960 purchase price. To calculate your coupon rate (4.16%), you take your $1,000 maturity and subtract the $960 purchase price before dividing the difference by $960.   

Fortunately, you’ll see the “true yield” or “bank equivalent yield” when buying T-bills through TreasuryDirect, a website managed by the U.S. Department of the Treasury, or your brokerage account, Keil said.

How to buy T-bills through TreasuryDirect

If you already have a TreasuryDirect account — say, because you’ve purchased Series I bonds — it’s relatively easy to buy T-bills, according to Keil, who detailed the process on his website.
After logging into your account, you can pick T-bills based on term and auction date, which determines the discount rate for each issue.
“You don’t really know truly what the rate is going to be until the auction hits,” Keil said. The process involves institutions bidding against one another, with no action required from everyday investors. 

How to buy T-bills through TreasuryDirect
1. Log in to your TreasuryDirect account.
2. Click “BuyDirect” in top navigation bar.
3. Choose “Bills” under “Marketable Securities.”
4. Pick your term, auction date, purchase amount and reinvestment (optional).

After the auction, “you get the exact same rate as the Goldman Sachs of the world,” with TreasuryDirect issuing T-bills a few days later, he said.
There is one downside, however. If you want to sell T-bills before maturity, you must hold the asset in TreasuryDirect for at least 45 days before transferring it to your brokerage account. There are more details about the process here.

There’s more liquidity through brokerage accounts

One way to avoid liquidity issues is by purchasing T-bills through your brokerage account, rather than using TreasuryDirect.
Keil said the “biggest benefit” of using a brokerage account is instant access to T-bills and immediately knowing your yield to maturity. The trade-off is you’ll probably give up around 0.1% yield or lower, he said.

George Gagliardi, a CFP and founder of Coromandel Wealth Management in Lexington, Massachusetts, also suggests buying T-bills outside of TreasuryDirect to avoid liquidity issues.
For example, there are low-fee exchange-traded funds — available through brokerage accounts — that allow investors to buy and sell T-bills before the term ends, he said.
“The fees pose a small drag on the interest,” Gagliardi said, but the ease of purchase and ability to sell before maturity “may override the small penalty in interest rates” for many investors.

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Higher than expected inflation for January means consumers can price growth to stay higher than average this year.
The Federal Reserve will likely continue to raise interest rates.
For households, stubbornly higher prices and uneven wage growth will be challenges.

Shoppers look at items displayed at a grocery store in Washington, D.C., on Feb. 15, 2023.
Stefani Reynolds | AFP | Getty Images

A new U.S. government reading showing persistent high inflation rattled Wall Street on Friday.
Consumers can expect the rate of price growth will likely stay higher than average through 2023.

“Inflation is going to come down gradually, if the Fed conducts policy the way it says it intends to,” said William Luther, director of the American Institute for Economic Research’s Sound Money Project.
“We’re looking at higher than normal price increases, certainly through 2023 and probably through much of 2024, as well,” Luther said.
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The Federal Reserve’s preferred measure for inflation, the personal consumption expenditures price index, showed headline inflation rose 5.4% from a year ago as of January and 0.6% for the month. Core inflation excluding volatile food and energy prices increased 4.7% and 0.6% for the month.
Declines in inflation that have happened since June actually reversed in January.

“It’s possible that this is just a blip, that we had more price increases in January and fewer price increases in December,” Luther said.

Earlier this month, the consumer price index, a separate government measure, also showed higher than expected inflation for January, with a 6.4% gain over 12 months and a 0.5% increase for the month.
While the inflation rate is poised to subside this year, “it will not be a straight line,” Raymond James chief economist Eugenio Aleman told CNBC.com at the time.
The Federal Reserve is tasked with getting inflation under control, while trying to avoid a deep economic recession.

What the latest inflation measure shows

The personal consumption expenditures price index, or PCEPI, is the central bank’s preferred measure as it seeks to bring inflation down to a 2% target.
There are two reasons why the PCEPI may be a better measure than the CPI, according to Luther.
First, the PCEPI measures all consumption expenditures, including those that are not coming directly out of consumers’ discretionary income, such as those made on their behalf by the government or employers.
“It puts more accurate weights on the categories of expenditures that are being made in the economy by consumers,” Luther said.

We’re looking at higher than normal price increases, certainly through 2023 and probably through much of 2024, as well.

William Luther
director of the American Institute for Economic Research’s Sound Money Project

The CPI, on the other hand, only looks at a basket of goods purchased from individuals’ discretionary incomes. Moreover, the basket of goods the CPI tracks is updated every year, while the PCEPI gets updated each month.
That really matters in cases where you have some individual prices that are changing a lot, according to Luther.

More interest rate hikes ‘almost a certainty’

The Federal Reserve has undertaken a series of interest rate hikes to tamp down inflation.
Based on Friday’s data, it’s “almost a certainty” the central bank will raise rates by 25 basis points in March, and maybe even higher, Luther said.
“If we continue getting these high inflation readings, it will have little choice [but] to go even further,” Luther said.

Prices will not come down

Organic eggs were priced at more than $11 per dozen at a store in Walnut Creek, California, on Feb. 10, 2023.
Smith Collection/gado | Archive Photos | Getty Images

As the Federal Reserve brings inflation down to a 2% target, prices will still continue to grow, albeit at a lower rate, Luther noted.
However, prices that have risen during high inflation will not return to where they were before.
A period of below 2% inflation would be needed to see prices subside back to where they were, Luther said.

Why wage growth is uneven

Even amid the highest inflation in 40 years, things could have been much worse for the typical household, Luther noted.
Median real wages are more or less where they were prior to both the pandemic and record high inflation kicking in, he said.

As prices shot up, many employees who saw their real wages decline were likely able to get new jobs or renegotiate with their current employers to push up their nominal wages, Luther said.
However, there may have been a lag between the price and wage increases, which may have hurt those households.
To be sure, not every household may have been able to negotiate for higher nominal wages, which means their income has not kept up with inflation, Luther noted.

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