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Currently, about 16% of 18- to 24-year-olds are neither in school nor working, according to a recent report by the St. Louis Fed.
These “NEETS” are largely discouraged by their economic standing and factors beyond their control.
Others, referred to as “new unemployables,” are struggling to get hired despite being well positioned to find work.

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When cracks start to show in the labor market, young adults are often the first to feel it.
To that point, about 16% of 18- to 24-year-olds are not employed and not enrolled in high school or college, according to a recent report by the Federal Reserve Bank of St. Louis, which refers to many in this group as “disconnected youth.”

Also often called “NEETs,” which stands for “not in employment, education, or training,” young, would-be job seekers are opting out of the labor force largely because they are discouraged by their economic standing. Weak job networks, college degree requirements, a lack of transportation or limited access to child care may also play a role, the St. Louis Fed found.

Among 16- to 24-year-olds, the unemployment rate rose to 9.1% in July, which is “typical,” according to Alí Bustamante, a labor economist and director of the Worker Power and Economic Security program at the Roosevelt Institute, a liberal think tank based in New York City.
Although the youth unemployment rate fell below 7% in 2023, according to the U.S. Bureau of Labor Statistics, such lows were “emblematic of how hot the labor market was at that point,” Bustamante said.
“Nine percent is basically what we should be expecting during relatively good economic times for younger workers,” he added.

‘NEETS’ are being ‘left out and left behind’

Still, some young adults in the U.S. are neither working nor learning new skills.

In 2023, about 11.2% of young adults ages 15 to 24 in the U.S. were considered as NEETs, according to the International Labour Organization.
In other words, roughly 1 in 10 young people are “being left out and left behind in many ways,” Bustamante said.
Even though “that’s typically the norm,” he said, “we should be expecting these rates to be lower.”
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Young men, especially, are increasingly disengaged, according to Julia Pollak, a labor economist at ZipRecruiter.
“The NEET trend is mostly a male phenomenon,” she said.
Pollak explained that’s in part due to declining opportunities in traditionally male occupations, such as construction and manufacturing, while “women’s enrollment in schooling, education outcomes, and employment outcomes have mostly trended upwards.”
Almost 70% of disconnected young adults have no more than a high school diploma, the St. Louis Fed also found.

‘New unemployables’

Meanwhile, other young adults who are actively looking for a job are well qualified but often struggling to find positions, comprising a contingent of “new unemployables,” according to a recent report by Korn Ferry. 
According to Korn Ferry’s report, a “perfect storm” has also created a glut of new unemployables, or highly trained workers who struggle to find job opportunities.
“Employers are holding on to the talent they have and increasingly focusing on talent mobility,” said David Ellis, senior vice president for global talent acquisition transformation at Korn Ferry.
This “talent hoarding” has led to fewer available job openings even for well-qualified candidates, he said.
At the same time, firms are scaling back on new hires, limiting the opportunities at the entry level, as well.
While the teen employment rate is the highest it has been in more than a decade, early 20-somethings are struggling to find jobs, Pollak explained.
“It’s the 20- to 24-year-olds that saw a massive drop-off in the labor force participation during the pandemic, and who have lagged behind ever since,” Pollak said.
Overall, hiring projections for the class of 2024 fell 5.8% from last year, according to a report from the National Association of Colleges and Employers, or NACE.
As more candidates compete for fewer positions, stretches of unemployment are also lengthening. Now, the number of people unemployed for longer than six months is up 21%, Korn Ferry found.

‘Unemployable’ to employable

Despite those trends in the job market, “all is not lost,” Ellis said.
“Don’t wait to reach out,” he advised. Get back in touch with former employers or colleagues through LinkedIn or email and set up informational interviews. After that initial approach, ask for any job leads or contacts.
In the meantime, make yourself more visible by writing about noteworthy topics in the industry and updating your resume to include keywords and so-called title tags, which highlight important elements at the top.
Finally, don’t limit yourself to roles that include a promotion or a raise, Ellis also advised. Rather, aim for a “career lattice,” which could entail taking lower position to gain skills that will pay dividends later.

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With college affordability a top concern for families, saving for higher education is more of a priority.
Financial experts often recommend a 529 college savings plan.
Anyone can contribute — you don’t have to be the account holder or the designated beneficiary to help grow a college savings account.

Jamie Grill | Getty Images

It may not be the season’s new hot toy, but gifting a child money toward college could have a more lasting impact.
Daniel Trujillo, 39, a certified public accountant in Albuquerque, New Mexico, said he was blown away when his friend suggested putting money into a college savings account in lieu of a gift for his son Teo’s birthday.

“When my son turned 2, one of my friends made a contribution to the 529 instead of a present,” Trujillo said. “I thought that was pretty darn cool.”

‘It’s going to take a village’

As overall participation rates in 529 college savings plans have been rising, so too are gifts from friends and family.
Altogether, total investments in 529 plans jumped to $450.5 billion as of June, up nearly 10% from $412.5 billion the year before, according to data from the College Savings Plans Network, a network of state-administered college savings programs.
Of the $6.94 billion in contributions in the most recent quarter, roughly 5.4%, or $372.6 million, came from plan gifting platforms.
“We are seeing an increase in gifts of all sizes with an average of $100 from friends and extended family for a child they love,” said Wayne Weber, CEO of Gift of College, a gifting platform for higher education and workplace benefits.

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“People are more willing to reach out to family and friends so the child is not burdened with student loans,” said Chris McGee, chair of the College Savings Foundation, a nonprofit that provides public policy support for 529 plans.
In 2023, 45% of parents said they would ask a family or friend to make a contribution. In 2024, that percentage jumped to 65%, according to the College Savings Foundation’s State of Higher Ed Savings survey.
“It’s the realization that it’s going to take a village to afford higher education,” McGee said.

Financial experts and plan investors agree that 529 plans are a smart choice for many.
As of 2024, 74% of parents surveyed have started making regular contributions to a 529, according to Fidelity’s College Savings Indicator — a spike from 58% in 2007, when the study was first conducted. Fidelity polled nearly 2,000 families with children high school age and younger between April and May. 
And yet, only 30% are on track to hit their college savings goals, Fidelity also found.
Gifting can help narrow the gap, according to Jordan Lee, the CEO of Saving for College and Backer, a San Francisco-based company focused on making 529 plans more accessible.
Even small contributions will compound over the years, he added, and can serve as “a great way to stay involved and help a kid with their future in a meaningful way.”
The average size of a monthly gift is roughly $65, while one-time gifts average $370, according to data provided by Backer.
“That can be super significant depending on how actively you promote the opportunity to friends and relatives,” Lee said.

How to ask for college savings gifts

Lee suggests checking whether your plan has a gifting platform, with a link or code that can be sent to friends and family. Otherwise, you can set up a personalized gift page through an app like Backer and share the link with your loved ones ahead of holidays, birthday parties, graduation ceremonies or even on a baby shower.
“It’s kind of a no-pressure way to invite people to contribute,” Lee said.
If family members are reluctant to forgo the fun of a wrapped present, Lee suggests splitting the difference.
“There’s some hesitation sometimes but it’s not either/or — give a physical book or toy and set up a contribution,” Lee said.
According to Fidelity’s most recent data, 79% of parents say they would welcome contributions to their child’s college savings account in lieu of traditional gifts — and 66% would prefer it.

The benefits of a 529 plan

There are many advantages to a 529 plan. In more than half of all U.S. states, you can get a tax deduction or credit for contributions, even if your aren’t the account holder or the designated beneficiary.
A few states also offer additional benefits, such as scholarships or matching grants, to their residents if they invest in their home state’s 529 plan.
Earnings then grow on a tax-advantaged basis, and when a child withdraws the money, it is tax-free if the funds are used for qualified education expenses.
The restrictions around 529 plans have also loosened to include continuing education classes, apprenticeship programs and even student loan payments.
Thanks to Secure 2.0, as of 2024, families can roll over unused 529 plan funds to the account beneficiary’s Roth individual retirement account without triggering income taxes or penalties. Among other qualifications, the 529 plan must have been open for at least 15 years.
“The legislative updates that have come through have certainly broken down barriers to entry to 529 plans,” said Tony Durkan, a vice president and head of 529 relationship management at Fidelity Investments.
The maximum contribution limits for 529 gifts
This year, gift givers can put up to $18,000, or up to $36,000 if you’re married and file taxes jointly, per child into a 529 without those contributions counting toward your lifetime gift tax exemption. That’s up from $17,000 and $34,000 for married couples filing jointly in 2023. 
High-net-worth families that want to help fund a family member’s higher education could also consider “superfunding” 529 accounts, which allows front-loading five years’ worth of tax-free gifts into a 529 plan.
In this case, you could contribute up to $90,000 this year, or $180,000 for a married couple. But then you wouldn’t be able to give more money to that same recipient within a five-year period without it counting against your lifetime gift tax exemption.
A larger lump-sum contribution upfront may potentially generate more earnings compared with the same-size contribution spread out over a few years because it has a longer time horizon, according to Fidelity.

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Traders work on the floor of the New York Stock Exchange (NYSE) during morning trading in New York on August 23, 2024. 
Angela Weiss | AFP | Getty Images

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Here’s what CNBC TV’s producers were watching as stocks rose modestly Tuesday and what’s on their radar for Wednesday’s session.

Nvidia

CNBC TV’s Seema Mody will report on Nvidia’s numbers after the bell.
On “Market Navigator” Tuesday, a part of “Power Lunch,” OptionsPlay’s Tony Zhang warned he was buying protection: a put spread to capitalize if the stock falls after the report.
Nvidia is up about 179% in the last year, and it has surged 159% in 2024.
The stock is 8.8% from the June 20 high.
Of the analysts tracking the stock, FactSet shows that 92% rate it a buy or overweight, while 8% deem it a hold. The average price target is $142.63, and the stock closed at $128.30 today.
Nvidia is up 20.5% in the past three months.

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Nvidia’s performance over the past three months

CrowdStrike

CNBC TV’s Steve Kovach will have the quarterly numbers after the bell.
There’s a lot of drama for CrowdStrike after a major IT outage July 19.
The stock is down 21.5% since then.
It had taken a leg lower before that. It’s down 32% from the July 9 high.
In the last year, however, CrowdStrike is up 80%.
The stock is down 23% in the past three months.

Salesforce

CNBC TV’s Julia Boorstin will report as the company releases quarterly earnings after the bell.
The stock is 17% from the March high.
Salesforce is down 3% in the past three months.

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Salesforce in 2024

The Great American Consumer

There were two good notes from NYSE producer and earnings guru Robert Hum here at CNBC on Tuesday.
He was watching Nordstrom and PVH. Both saw strong regular-price sales/full-priced sales.
Both did better than expected.
Nordstrom is up 6% after the bell. The stock is down 7% in August.
PVH is down 7% after the bell. The stock is up 4.4% in a month.

Foot Locker

The retailer reports Wednesday morning. 
Foot Locker is 8% from the February high.
The stock is up nearly 49% in the past three months.
Nike is down 7% in that time period. It is 31% from the December high.

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Foot Locker’s performance over the past three months

China

Shake Shack CEO’s Rob Lynch

Wednesday marks 100 days since Rob Lynch took over as CEO.
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The National Public Data breach has capped off a series of large leaks of consumer data this year.
The first and best defense for consumers is to freeze their credit, experts say.
Here’s what you need to know about that process.

PN_Photo | Getty Images

So far, 2024 has been a huge year for data breaches.
There had already been more than 1 billion personal records compromised before the National Public Data breach that has been making headlines, according to Michael Bruemmer, head of global data breach resolution at consumer credit reporting company Experian.

National Public Data, a background check company, was alleged to have made 2.9 billion records vulnerable in a recent lawsuit. The company has said the actual number of records exposed is much lower, around 1.3 million.
The breach, however, may be bigger than the company is reporting, according to Bruemmer, based on the data Experian has mined from the breach.
National Public Data did not respond to requests for comment from CNBC.
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“It’s a big deal,” Bruemmer said, and it follows other recent sizeable breaches from Change Healthcare, AT&T and Ticketmaster.

Stolen data typically ends up on the dark web, where hackers will dump the information and often attempt to resell it.
The dark web is a part of the internet made up of hidden sites you can’t find through conventional search engines. Unlike credit files, which can be disputed and updated, information on the dark web can’t be brought back or deleted.
“Once it’s out there, it stays,” Bruemmer said.

Freezing your credit can take just minutes

To protect your data, experts say freezing your credit should be a priority.
“Freezing your credit is the single most important thing you can do when you get a data breach notice,” James E. Lee, chief operating officer at the Identity Theft Resource Center, a nonprofit working to minimize the risk of identity theft, recently told CNBC.com.
The good news is the process can be done in just minutes, Bruemmer explained.
A credit freeze will limit access to your credit report and prevent the opening of new accounts in your name, either by you or other parties.
Notably, freezing your credit is free.

What’s more, a credit freeze will last until you remove it, which can be done either temporarily or permanently.
If you want to apply for new credit — for a credit card or auto loan, for example — you will have to unfreeze your report.
“I’d recommend a freeze if you suspect that you might have been impacted by a breach, or you just want to have good identity hygiene,” Bruemmer said.
To effectively freeze your credit, you will need to complete the process at all three major credit reporting agencies — Equifax, Experian and TransUnion. This will require setting up free online accounts with each agency. You can request a freeze by phone or mail, but online is usually the fastest option, experts say.
It’s also a good idea to look at your free credit report to monitor the latest activity to ensure there are no errors, experts suggest.

When to freeze children’s records

Because of the size of the National Public Data breach, children’s information may also have been stolen, according to Bruemmer.
For that reason, parents should be on the lookout for signs that data about their children may have been compromised, such as unsolicited credit card offers, tax bills from the IRS or notices from bill collectors.
Whether it makes sense to freeze a child’s credit depends on whether a file on them exists, Bruemmer said.
“Most children will not have a credit file, and we don’t recommend placing a freeze on a child’s file that the bureau would have to create,” Bruemmer said.
Parents can try to pull a free credit report on their children annually at AnnualCreditReport.com. If a credit file exists, parents and children would want to freeze it, Bruemmer said.

Other tips to keep your personal data secure

Freezing your credit is a just a first step among the precautions you should take to protect your personal data.
Changing passwords to make sure you have unique codes for each website can help. An online password manager can help generate long and complex passwords and also store them in one place, Bruemmer said.
Two factor authentication or encryption — which requires more than one way of verifying your identity when logging into accounts — can also help prevent bad actors from gaining access to important information.
It also helps to remove personal information on social media that can be used by identity thieves, Bruemmer said.
Consumers may also consider setting up alerts on their accounts to keep them up to date on the latest activity.
Additional services may be purchased to alert individuals when their information has been posted on the dark web or monitor whether a credit file has been established for a minor, Bruemmer said. More

As problems with the new FAFSA form spill into next year, families are even more worried about how they will afford the high costs of college.
To that end, The Princeton Review ranked schools based on how much financial aid is awarded.
At some of these institutions, the average scholarship given to students with need was more than $70,000 in 2023-24.

Without financial aid, the price tag at some four-year colleges and universities — after factoring in tuition, fees, room and board, books, transportation, and other expenses — is now nearing $100,000 a year.
But even though college is getting more expensive, students and their parents rarely pay the full amount.

Aside from their income and savings, most families rely on federal aid, which may include loans, work-study and grants, to help bridge the “affordability gap,” according to Sameer Gadkaree, president of The Institute for College Access and Success, a nonprofit organization that promotes college affordability.
Still, “we have created this situation where students can’t just work their way through college without taking on debt,” he said. “It’s simply, the math doesn’t work.”
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Problems with the new federal student aid application form have heightened families’ concerns and early signs show that FAFSA issues could continue into the upcoming application season. Already, the U.S. Department of Education recently announced a delayed start in December.
With cost the No. 1 college concern among families, issues with the FAFSA “will continue to affect students and their parents,” said Robert Franek, The Princeton Review’s editor in chief.

That’s where financial assistance from a college can be key.
To that end, The Princeton Review ranked colleges by how much financial aid is awarded and how satisfied students are with their packages. The 2025 edition of the company’s college guide is based on data from surveys of 168,000 students in the 2023-24 school year.

The schools that ranked the highest not only deliver on assistance, but also on calming concerns about college affordability, Franek said: “These colleges are saying, ‘You do not have to mortgage your future to pay for school — we are meeting you where you are.'”
Among some of the schools near the top of The Princeton Review’s list, the average scholarship grant awarded in 2023-24 to students with need was more than $70,000. Of all the financial aid opportunities the FAFSA opens up, grants are the most desirable kind of assistance because they typically do not need to be repaid.
“The takeaway is that they are noting the difficulty that students are having with financial aid and the general fear around scholarship dollars and literally directing financial aid to defuse that worry and that stress” Franek said.

Top 10 colleges for financial aid

Skidmore College
Tai | Flickr CC

1. Skidmore CollegeLocation: Saratoga Springs, New YorkSticker price: $85,230Average need-based scholarship: $53,700Total out-of-pocket cost: $31,530Average share of need met for first-year students with need-based aid: 100%
2. Gettysburg CollegeLocation: Gettysburg, PennsylvaniaSticker price: $82,750Average need-based scholarship: $54,032Total out-of-pocket cost: $28,718Average share of need met for first-year students with need-based aid: 90%
3. Washington UniversityLocation: St. LouisSticker price: $87,644Average need-based scholarship: $65,777Total out-of-pocket cost: $21,867Average share of need met for first-year students with need-based aid: 100%
4. Olin College of EngineeringLocation: Needham, MassachusettsSticker price: $86,993Average need-based scholarship: $56,825Total out-of-pocket cost: $30,168Average share of need met for first-year students with need-based aid: 100%
5. Wabash CollegeLocation: Crawfordsville, IndianaSticker price: $65,200Average need-based scholarship: $39,846Total out-of-pocket cost: $25,354Average share of need met for first-year students with need-based aid: 94%
6. College of the AtlanticLocation: Bar Harbor, MaineSticker price: $58,401Average need-based scholarship: $39,055Total out-of-pocket cost: $19,346Average share of need met for first-year students with need-based aid: 96%
7. Thomas Aquinas CollegeLocation: Santa Paula, CaliforniaSticker price: $47,465Average need-based scholarship: $18,709Total out-of-pocket cost: $28,756Average share of need met for first-year students with need-based aid: 100% 
8. Reed CollegeLocation: Portland, OregonSticker price: $87,010Average need-based scholarship: $47,265Total out-of-pocket cost: $39,745Average share of need met for first-year students with need-based aid: 100%
9. Williams CollegeLocation: Williamstown, MassachusettsSticker price: $85,820Average need-based scholarship: $70,764Total out-of-pocket cost: $15,056Average share of need met for first-year students with need-based aid: 100%
10. Princeton UniversityLocation: Princeton, New JerseySticker price: $82,650Average need-based scholarship: $70,246Total out-of-pocket cost: $12,404Average share of need met for first-year students with need-based aid: 100%
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After a strong year for the stock market, tax-gain harvesting could help rebalance your portfolio and save on future taxes.
For 2024, you may qualify for the 0% long-term capital gains rate with a taxable income of up to $47,025 if you’re a single filer or up to $94,050 for married couples filing jointly.
You can use the 0% bracket to reset your “basis” or original purchase price, by selling a profitable asset and then immediately repurchasing.  

Source: Getty Images

During a strong year for the stock market, a lesser-known strategy could help rebalance your portfolio and save on future taxes.
The tactic, known as tax-gain harvesting, involves strategically selling your profitable brokerage account assets during lower-income years. That could include early years of retirement or periods of unemployment.

As of Aug. 26, the S&P 500 has surged more than 18% year to date, with strong growth in August as investors brace for interest rate cuts from the Federal Reserve in September.
“A lot of times when we’re doing this, we’re looking to realize those gains at 0%,” said Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.
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The capital gains brackets apply to long-term capital gains, or profitable assets owned for over a year. By comparison, short-term investments held for one year or less are subject to regular income taxes.   
“It’s very lucrative, especially if you’re married” and filing together, Lucas said.

For 2024, you may qualify for the 0% capital gains rate with a taxable income of up to $47,025 if you’re a single filer or up to $94,050 for married couples filing jointly.  
These rates apply to “taxable income,” which you calculate by subtracting the greater of the standard or itemized deductions from your adjusted gross income.
For example, a married couple earning $120,000 in 2024 could still fall below the $94,050 taxable income threshold after subtracting the $29,200 standard deduction.

Reset your basis for future savings

Tax-gain harvesting offers a couple of benefits, including rebalancing your brokerage assets without triggering gains, experts say.
You can also reset your “basis” or original purchase price, by selling a profitable asset and then immediately repurchasing, CFP Sean Lovison, founder of Philadelphia-area Purpose Built Financial Services, previously told CNBC.
After selling assets at a loss, the so-called wash sale rule blocks the tax break if you rebuy a “substantially identical” asset within a 30-day window before or after the sale. But the same rule doesn’t apply for harvesting gains.
“This move can be a game changer” by reducing future gains, especially when you sell later in higher-earning years, said Lovison, who is also a certified public accountant.

The ‘sweet spot’ for tax-gain harvesting

Lucas from Moisand Fitzgerald Tamayo said the “sweet spot” for tax-gain harvesting is typically in October or November, once investors can more accurately project their taxable income for the year.Since harvesting gains increases your taxable income, you should leave “some buffer room built in there” to avoid hitting the 15% capital gain bracket, he said.
Typically, tax-gain harvesting is more attractive in lower-income years, such as early retirement before required minimum distributions. But younger retirees with marketplace health insurance can jeopardize premium tax credits with higher income, Lucas warned.

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Federal Reserve Chair Jerome Powell signaled Friday that lower interest rates are coming soon.
Everything from car loans and mortgages to credit cards will be impacted once the Fed starts trimming its benchmark.
Here’s how to make the most of this policy shift.

Last week, Federal Reserve Chair Jerome Powell all but confirmed that an interest rate cut is coming soon.
“The time has come for policy to adjust,” the central bank leader said in his keynote address at the Fed’s annual retreat in Jackson Hole, Wyoming.

For Americans struggling to keep up with sky-high interest charges, a likely quarter-point cut in September may bring some welcome relief — especially with the right preparation. (A more aggressive half-point move has a roughly a 1-in-3 chance of happening, according to the CME’s FedWatch measure of futures market pricing.)
“If you are a consumer, now is the time to say: ‘What does my spending look like? Where would my money grow the most and what options do I have?'” said Leslie Tayne, an attorney specializing in debt relief at Tayne Law in New York and author of “Life & Debt.”
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Currently, the federal funds rate is at the highest level in two decades, in a range of 5.25% to 5.50%.
If the Fed cuts rates in September, as expected, it would mark the first time officials lowered its benchmark in more than four years, when they slashed them to near zero at the beginning of the Covid-19 pandemic.

“From a consumer perspective, it’s important to note that lower interest rates will be a gradual process,” said Ted Rossman, senior industry analyst at Bankrate.com. “The trip down is likely to be much slower than the series of interest rate hikes which quickly pushed the federal funds rate higher by 5.25 percentage points in 2022 and 2023.”
Here are five ways to prepare for this policy shift:

1. Strategize paying down credit card debt

People shop at a store in Brooklyn on August 14, 2024 in New York City. 
Spencer Platt | Getty Images

With a rate cut, the prime rate lowers, too, and the interest rates on variable-rate debt — most notably credit cards — are likely to follow, reducing your monthly payments. But even then, APRs will only ease off extremely high levels.
For example, the average interest rate on a new credit card today is nearly 25%, according to LendingTree data. At that rate, if you pay $250 per month on a card with a $5,000 balance, it will cost you more than $1,500 in interest and take 27 months to pay off.
If the central bank cuts rates by a quarter point, you’ll save $21 altogether and be able to pay off the balance one month faster. “That’s not nothing, but it is far less than what you could save with a 0% balance transfer credit card,” said Matt Schulz, chief credit analyst at LendingTree.
Rather than wait for a small adjustment in the months ahead, borrowers could switch now to a zero-interest balance transfer credit card or consolidate and pay off high-interest credit cards with a lower-rate personal loan, Tayne said.

2. Lock in a high-yield savings rate

Since rates on online savings accounts, money market accounts and certificates of deposit are all poised to go down, experts say this is the time to lock in some of the highest returns in decades.
For now, top-yielding online savings accounts are paying more than 5% — well above the rate of inflation.
Although those rates will fall once the central bank lowers its benchmark, a typical saver with about $8,000 in a checking or savings account could earn an additional $200 a year by moving that money into a high-yield account that earns an interest rate of 2.5% or more, according to a recent survey by Santander Bank in June. The majority of Americans keep their savings in traditional accounts, Santander found, which FDIC data shows are currently paying 0.46%, on average.
Alternatively, “now is a great time to lock in the most competitive CD yields at a level that is well ahead of targeted inflation,” said Greg McBride, Bankrate’s chief financial analyst. “There is no sense in holding out for better returns later.”
Currently, a top-yielding one-year CD pays more than 5.3%, according to Bankrate, as good as a high-yield savings account.

3. Consider the right time to finance a big purchase

If you’re planning a major purchase, like a home or car, then it may pay to wait, since lower interest rates could reduce the cost of financing down the road.
“Timing your purchase to coincide with lower rates can save money over the life of the loan,” Tayne said.
Although mortgage rates are fixed and tied to Treasury yields and the economy, they’ve already started to come down from recent highs, largely due to the prospect of a Fed-induced economic slowdown. The average rate for a 30-year, fixed-rate mortgage is now just under 6.5%, according to Freddie Mac.
Compared with a recent high of 7.22% in May, today’s lower rate on a $350,000 loan would result in a savings of $171 a month, or $2,052 a year and $61,560 over the lifetime of the loan, according to calculations by Jacob Channel, senior economic analyst at LendingTree.
However, going forward, lower mortgage rates could also boost homebuying demand, which would push prices higher, McBride said. “If lower mortgage rates lead to a surge in prices, that’s going to offset the affordability benefit for would-be buyers.”
What exactly will happen in the housing market “is up in the air” depending on how much mortgage rates decline in the latter half of the year and the level of supply, according to Channel.
“Timing the market is virtually impossible,” he said. 

4. Assess the right time to refinance

For those struggling with existing debt, there may be more options for refinancing once rates drop.
Private student loans, for example, tend to have a variable rate tied to the prime, Treasury bill or another rate index, which means once the Fed starts cutting interest rates, the rates on those private student loans will come down as well.
Eventually, borrowers with existing variable-rate private student loans may also be able to refinance into a less-expensive fixed-rate loan, according to higher education expert Mark Kantrowitz. 
Currently, the fixed rates on a private refinance are as low as 5% and as high as 11%, he said.
However, refinancing a federal loan into a private student loan will forgo the safety nets that come with federal loans, he added, “such as deferments, forbearances, income-driven repayment and loan forgiveness and discharge options.” Additionally, extending the term of the loan means you ultimately will pay more interest on the balance.

Be mindful of potential loan-term extensions, cautioned David Peters, founder of Peters Professional Education in Richmond, Virginia. “Consider maintaining your original payment after refinancing to shave as much principal off as possible without changing your out-of-pocket cash flow,” he said.
Similar considerations may also apply for home and auto loan refinancing opportunities, depending in part on your existing rate.

5. Perfect your credit score

Those with better credit could already qualify for a lower interest rate.
When it comes to auto loans, for instance, there’s no question inflation has hit financing costs — and vehicle prices — hard. The average rate on a five-year new car loan is now nearly 8%, according to Bankrate.
But in this case, “the financing is one variable, and it’s frankly one of the smaller variables,” McBride said. For example, a reduction of a quarter percentage point in rates on a $35,000, five-year loan is $4 a month, he calculated.
Here, and in many other situations, as well, consumers would benefit more from paying down revolving debt and improving their credit scores, which could pave the way to even better loan terms, McBride said.

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The National Flood Insurance Program, a public insurance program sponsored by the federal government insures 4.7 million policyholders and protects more than $1.28 trillion in assets.
Congress has until Sept. 30 to reauthorize the NFIP.
“Without an extension, you’re not going to be able to get a mortgage in any area that requires flood insurance,” said Jaret Seiberg, a managing director and financial policy analyst at TD Cowen.

Shaunl | E+ | Getty Images

Consumers in the market for a home have been patiently waiting for the Federal Reserve to cut interest rates — a move it seems poised to make in September.
But without action from Congress, there could be another change at the end of that month that makes it temporarily trickier to buy or sell a home in some areas, or to refinance an existing mortgage.

That’s because the National Flood Insurance Program — the government-sponsored public insurance program that is the largest flood insurer in the U.S. — needs to be reauthorized by Sept. 30 to continue to issue new policies or increase coverage on existing policies.

If you are buying or selling a house, you want to avoid the end of September and the beginning of October.

Jaret Seiberg
managing director and financial policy analyst at TD Cowen

Homeowners insurance policies typically don’t cover flood damage, meaning consumers who want to protect their home and its contents from that peril need a stand-alone flood policy. Mortgage lenders may require applicants to obtain such a policy before closing on a home, depending on the flood risk for the property.
“This is about the ability to get a mortgage in a flood zone after Sept. 30,” said Jaret Seiberg, a managing director and financial policy analyst at TD Cowen. “Without an [NFIP] extension, you’re not going to be able to get a mortgage in any area that requires flood insurance.”
More from Personal Finance:Here’s what’s not covered by flood insuranceHow to prevent hurricane damage on your homePeople are moving out of cities with poor air quality
Congress established the NFIP in 1968 to provide reasonably priced flood insurance coverage. The Biggert-Waters Flood Insurance Reform Act of 2012, which included the NFIP authorization, expired on Sept. 30, 2017. Since then, Congress has extended the NFIP’s authorization 30 times — but it has also lapsed briefly three times in that period.

“This has been an issue now for many years where the program faces expiration and Congress, [at the] last minute, reauthorizes it,” said Bryan Greene, vice president of policy advocacy at the National Association of Realtors. “We’re trying to prevent natural disasters, but we seem to always face this potential man-made disaster of not acting timely enough.”

What a program lapse would mean for home sales

If the NFIP experiences a lapse in its authority, it will not be able to issue new policies, including for people whose lenders require flood insurance or increase coverage on existing policies (including property owners looking to refinance existing mortgages), according to a spokesperson for the Federal Emergency Management Agency, which operates the NFIP.
It’s possible the home sale transaction would be halted or be held up until the buyer can obtain flood insurance, said Jeremy Porter, head of climate implications research at First Street Foundation, a nonprofit organization in New York that focuses on quantifying the financial risk of climate change. That might entail waiting for Congress to reauthorize the NFIP, or looking for coverage on the private market.
The latter tactic isn’t easy. “There are very few private insurers that offer any type of flood insurance,” said Daniel Schwarcz, a professor of law at the University of Minnesota Law School who focuses on insurance law and regulation.

“There are some very niche types of policies out there … but for all intents and purposes,” he said, the NFIP is “the only available option for flood insurance.”
And if the NFIP lapses, it could make the search for a private insurer more difficult: “If you eliminate that foundation, the rest of the market isn’t there,” said Seiberg.
When the program lapsed from May 31 until July 2 in 2010, 6% of real estate agents reported a delayed or canceled sale, according to a report by the National Association of Realtors. In that report, from 2011, it estimated a one-month NFIP lapse could affect about 40,000 closings.
“If you are buying or selling a house, you want to avoid the end of September and the beginning of October,” said TD Cowen’s Seiberg. “There is no need to take the risk that the flood insurance program will lapse when you could close ahead of Sept. 30.”

How homeowners would be affected by a lapse

The NFIP insures 4.7 million policyholders and protects more than $1.28 trillion in assets. Those existing policyholders may be shielded by the effects of a lapsed NFIP, said Seiberg.
Policies that are in force will remain in force and the NFIP will continue to pay claims under those policies during a lapse, according to the FEMA spokesperson.
If your flood insurance policy’s renewal or expiration date is around Sept. 30, try to renew it early, said Yanjun Liao, an applied microeconomist and fellow at Resources for the Future, a nonprofit research institution in Washington, D.C.
“Check the expiration date and make plans in advance,” said Liao, whose research focuses on natural disaster risk management and climate adaptation.
Homeowners considering refinancing an existing mortgage may also want to weigh the timing with the Sept. 30 reauthorization deadline in mind, if their lender has required flood insurance coverage.

Why NFIP reauthorization is a ‘catch-22’

The NFIP has been continuously reauthorized because of the “potential consequences” of limited private insurers available, Schwarcz said.
“We’re in this real catch-22,” said Schwarcz. “We have a bad program; no one likes it.
“But you can’t get rid of it because people are dependent on it without a better alternative, and no one can agree on better alternatives.”
Critics often point to policy pricing as a concern.
Until recently, the NFIP had a reputation as being a subsidized insurance program, in which people in places far away from the coast paid for flood insurance for those who live in high-risk areas, said First Street Foundation’s Porter.
Then in 2021, FEMA implemented Risk Rating 2.0, a new pricing system that would accurately reflect the cost of an area’s risk. Homeowners and elected representatives of coastal states have pushed back against that change because of how high premiums got.
“All of a sudden, you went from paying $800 a year to paying thousands of dollars a year for your insurance,” Porter said.

Sen. Bill Cassidy, R-La., spoke in early August about the rising costs of NFIP premiums in his Gulf Coast state, and urged Congress to improve the program.
“My team is working on a bipartisan solution that will roll back Risk Rating 2.0, and make flood insurance affordable and accountable again,” said Cassidy in his speech.
Congress is unlikely to let the NFIP entirely expire, given the number of homeowners who depend on the program, Seiberg said.
“The real problem is that the flood insurance program is a financial debacle and Congress doesn’t seem capable of fixing it and, instead, what Capitol Hill does is just kick the can down the road,” he said.

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