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Abby Hayes

Unless you’ve been living under a rock, you’ve probably heard whisperings of the Federal Reserve’s rate hike last month. This is only the third time since the Great Recession that the Fed has increased rates… and, well, it’s both a good thing and a bad thing.

A Fed rate increase means that the economy is on the upswing. The Fed will only raise the benchmark rate when the economy no longer needs stimulus. Janet Yellen, chairwoman of the Fed, said that her organization plans to go slowly with such rate increases. So, it’s best to assume that the Federal Reserve is cautiously optimistic about the economy and where we stand today.

The most recent benchmark increase was only a bump from .75 to 1 percent. It doesn’t seem like much, but even a tiny change in the benchmark rate can spell major changes for your personal financial situation. Let’s take a look at what the latest increase may mean for you.

How the Fed changes interest rates

The Federal Reserve doesn’t directly affect interest rates. Instead, its benchmark rate affects the federal funds rate — the rate that banks charge each other. The banks then pass those costs (or savings) on to consumers by changing the rates of short-term loans. Then, when short-term rates increase, long-term rates increase, as well.

In short, when the Fed increases its benchmark rate, you’ll first feel the pinch with your credit cards and other adjustable-rate or new shorter-term loans. But you’ll eventually feel the pinch if also you try to take out a longer-term loan, like a mortgage.

Here’s how the current rate increase is most likely going to impact your wallet:

If you have adjustable-rate debt

Variable- or adjustable-rate debts — like credit cards, HELOCs, and variable-rate mortgages — will likely be the first place to feel the difference, post-rate hike. A quarter-percentage interest hike doesn’t seem like much, but it can really add up over time. This is especially true if you’re carrying around a lot of credit card debt.

Let’s assume that you’re holding the average American family’s $16,000 worth of credit card debt. Depending on your terms, the rate increase could potentially cost you several hundred dollars per year.

Learn More: How Is the Nation REALLY Doing With Credit Card Debt?

Just how much more can you expect to pay on your variable rate loan? Dig into your statements to ensure you always know your rates, even as they change. Then, use an online calculator to see how much you’re going to pay in interest when your rate increases.

The best way to deal with this particular issue? Just pay off that debt as soon as you can. Right now, you may only be looking at a difference of $100 a year or less. But if the Fed continues to increase their benchmark rates, the interest rates on your already higher-interest debts are only going to increase.

Need a boost to get you started? Consider transferring some of your debt to a card with a 0% APR introductory period. Paying no interest for even 12 or 15 months can make it much easier to get that principal paid down before you end up paying through the nose because of rate increases.

If you have, or are in the market for, a mortgage

Fixed-rate mortgages, which remain the most popular option, may not skyrocket immediately. But the pinch will come.

According to Freddie Mac, the average 30-year, fixed-rate mortgage in January charged 4.15% interest. In March, that increased to 4.2%. That’s a fairly large increase from this time last year, when rates were more like 3.69%. But from February to March, that much of an increase would probably only make a few dollars’ worth of difference in your monthly payments.

With that said, even a point’s difference on a 30-year mortgage can have a big impact on your finances over time. That’s because you’re paying interest on this loan for so long. Even a few bucks a month will add up over the course of 30 years!

Read More: Can This Simple App Get You Out of Debt?

So, what should you do with all of this in mind? Well, if you’re in the market for a mortgage, you might try to buy sooner rather than later. But only if you have a sufficient down payment and good credit. It doesn’t make sense to pay more for a mortgage, simply because you’ve rushed in before you’re financially ready.

With the Fed’s cautious outlook, it doesn’t seem that interest rates are going to skyrocket any time soon. So, it doesn’t make sense to lock in a lower rate if you’re not financially prepared to buy yet.

What about those who already own a home? If you’re still paying pre-Great Recession interest rates of 5% or more, you might want to consider refinancing while the rates are still low. This is especially true if you’re also in a better credit and all-around financial situation now than you were last time you bought or refinanced your mortgage. If nothing else, it’s worth looking into your refinance options now, before rates increase any more.

In the Know: Can You Refinance Your Mortgage With Bad Credit?

If you have savings and investments

Just as interest rates on consumer debt are rising slowly, so will rates on savings products. Chances are you’ll see a slight increase on the rate on your interest-bearing accounts, including savings accounts. Other interest rates — like those on CDs — will also rise, albeit slowly.

Bottom line: now could be a good time to shop around, Make sure that you’re getting the best interest rate on your high-yield savings accounts and, if you’re not, think about switching.

What about your longer-term investments, including those in your retirement account? It’s much harder to predict a rate hike’s impact on savings vehicles like these. When it comes to long-term investing, just stay the course and keep paying attention to the basics, like asset allocation.

Related: The Perfect Asset Allocation Plan

So, what exact impact will the Fed’s rate increase have on you? It really depends on your current financial situation, especially your debt and savings account mix. Just be sure to pay attention to interest rates on both debt products and savings products, so you can take advantage of the best deals around.

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National averages for credit card and other consumer debt can be a good barometer of consumers’ financial capacity and goals. For instance, when debt decreases, Americans, as a whole, may be spending less and saving more. Of course, that’s a good thing.

So, when SmartAsset released its average credit card debt study recently, we took notice. The survey looked at median individual income and credit card data from 2006 to 2016. It even broke down the data by state!

trend

What did the survey find? Here are some of the topline results and what they might mean for consumers like you:

Americans were dropping credit card debt… but now they’re reversing that trend.

The data show that from 2006 to 2015, the average total credit card debt went from about $3,175 per person to $2,800 per person. Total credit card debt dropped — in every region except Virginia, Maryland, and Washington, D.C. — during this time period.

What does that 11.6% decrease mean? It’s hard to say exactly. But it could have been a result of the financial crisis, and people understanding how dangerous credit card debt can be during a time of personal financial upheaval.

During this time, though, there was a peak in the average credit card debt. In 2008, the average debt was $3,670, and the average American had debt equal to about 14% of their annual income! From that high point, we started cutting back on credit card debt quickly and efficiently. This is definitely a good thing.

So for several years, Americans were dropping debt at a significant rate. But then, a new trend happened.

The average credit card debt bottomed out at $2,730 in 2014, bouncing back up to $2,800 in 2015. Over this same time period, the total national credit card debt rose from $733 billion to $799 billion. So, is this the new normal?

It’s hard to say. But the report speculates that the Great Recession incentivized Americans to lower their credit card debt. But once the recession turned around, Americans seem to have forgotten the struggle and gone back to their old ways… taking on significant amounts of credit card debt.

What does it mean for consumers?

Boiling complex statistics, in a survey like this one, down to a few talking points is risky. The challenge is to avoid reading too much into the results. With that said, I think there are a few lessons that financially savvy consumers could take away from this study.

 

It’s all too easy to go back to bad habits.

What we see here in these trends is that, when given a big enough push, Americans are capable of buckling down and paying off debt. In some states, credit card debt levels shrunk by 30% or more, during and right after the Great Recession!

Necessity tends to breed discipline, in finances as in everything else. But when that necessity is no longer spurring you on, what happens? It’s way too easy to go back to former bad habits.

Time will tell whether the recent uptick in debt levels is a trend that will continue. But it does show that once the worst of the crisis is over, people may be willing to slide back to where they were before.

If you really want to change your habits, whether in the realm of personal finance, your health, or elsewhere, you have to keep going. And that means even after the crisis that spurred your change has passed!

 

We should all be prepared for the worst, at any time.

If consumers had known beforehand that the Great Recession was coming, do you think they would have had thousands of dollars in credit card debt lying around? For many, probably not!

It’s easy to live large when things are good, and not to worry too much about things like credit card debt. After all, you can afford the payments, so what’s the big deal? The problem is that you never know what’s just around the bend.

Illness, stock market crashes, job loss, and other disasters can strike at any time. While you don’t want to live in a doom-and-gloom mindset, it’s best to be prepared. And, financially, this means being as debt-free as possible and having emergency savings available.

 

Focusing on staying out of credit card debt is still important.

Personal finance blogs like this one have been around for decades now, but many people still need to go back to the basics. One of those basics is the importance of paying off credit card debt.

Sure, sometimes taking on credit card debt can be justified. But it’s important to pay it off as quickly and efficiently as possible. Otherwise, you run the risk of trying to pay down such debt while you’re already in the middle of a crisis.

So, what’s your story from the Great Recession? Did your credit card debt go down? Are you letting it slide back up again? Tell us in the comments.

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We’ve always been fans of Quicken here at Consumerism Commentary, and we’ve got a lot of reviews floating around to prove it. But you don’t really need reviews of Quicken from five years ago. You just need to know what to expect from the latest version: Quicken 2017.

Here, we’ll give you the highlights, and we’ll also talk you through the basics of using this interface.

quicken guide

The Highlights

Quicken still provides everything you’ve come to expect, including the ability to track all of your money in one place. If you’re big on tracking your net worth, it’ll help you do that. It tracks both assets and debts, and it will also track investments. (Though if you’re a serious investor, you may want to upgrade to Quicken Premier.)

What’s new with the 2017 version? Not a whole lot has changed, but there are a couple of upgrades you should know about, including:

  • Mobile: Now you can download the Quicken app to track your investments and budget on the go. The mobile app has a nice interface with everything you’ll find in the desktop version. Plus, you can add budget line items as you spend.
  • Advanced Search: You can find mobile transactions more easily with the mobile advanced search feature.
  • Refresh: Quicken got a refresh this year. The screen looks nicer, and the interface is a little more user-friendly. It’s not a major overhaul, but it’s easy on the eyes.
  • Zillow: You can connect with Zillow to automatically import your home’s estimated value. While Zillow may not be the most accurate option if you’re actually getting ready to buy or sell a home, this is a simple way to get a ballpark idea of your home’s value when calculating your net worth.
  • Alerts: You can get alerts sent to your phone or email inbox when bills are due or when you’re about to go over your budget.
  • Receipt Storage: Need to track expense receipts, but tired of paper clutter everywhere? You can snap photos of your receipts and store them with the mobile app.

Related: How to Track and Manage Receipts with Google Docs

Once you get set up, keeping track of everything in Quicken is relatively simple. Here’s what it all looks like:

First, import your accounts

As with other popular budgeting and financial tracking software, Quicken will automatically sync with your bank and credit card accounts, as well as your investment accounts. This makes it easy for you to track transactions without having to enter them manually.

In fact, the very first thing Quicken asks you to do after you enter your credentials is to sync a new account. To make it happen, you’ll just need your account’s login information. You can import all sorts of accounts, even to the basic version of Quicken, though investment tracking is more robust with the higher-level versions.

Next, check your recent transactions

When your accounts are imported, it can seem a little overwhelming at first. Quicken automatically categorizes your transactions, but you’ll likely have to go through a recategorize many of them. Quicken will give you the last thirty days’ worth of spending information to work with.

I do like how the system breaks everything down graphically. Once you set all of your transactions into categories, you can see what percentage of your budget goes to each category, and check out a corresponding chart breaking down your spending. It looks like this:

Quicken 1

You can see that Quicken will alert you when there are uncategorized transactions. You can click into that directly to see those transactions. Then, you can sort your transactions by account, date, and type of spending (with or without taxes).

You can also click into spending categories to figure out which transactions Quicken has placed into which categories. Chances are you’ll want to change some of those if you’re a budgeting stickler!

Quicken 2

Related: A 10-Minute Budget That Actually Works

Try the bill reminder system

Once you’ve been in the spending category interface, you can use the bill system to remind you when your bills are due. It’ll look at your last two months’ worth of transactions and find recurring bills and their due dates. The system will also track any paychecks you have automatically deposited to your bank account.

Quicken 3

You can then set up the reminders, which will alert you when bills are due and project your checking account balances over the next 12 days, based on your upcoming income and expenses.

Quicken 4

Since it’s not accounting for one-off spending like groceries and gas, this balance isn’t very accurate. At least not for me! But it can be a helpful way to stay on top of your bills so you don’t miss any due dates.

Learn More: Track Your Cash Flow with Google Docs

You can also sign up to have Quicken actually pay your bills for you. This requires a validation of your bank account and a monthly payment of $9.95. Since many banks offer free bill pay services, this one may not be worth the additional spend.

Create a budget

As with other pieces of this interface, Quicken will automatically create a budget for you based on past spending. However, this spending is according to Quicken’s categorizations. If you think Quicken has gotten a few things wrong, it’s best to re-categorize your existing transactions before delving into the budget tab.

Once you do, though, you can get access to a quick budget that you can change from there. The budget interface now looks very similar to Intuit’s Mint.com, which features slider bars to show how close you are to the budget limit in each category.

Quicken 5

You can, of course, change the budget for each category depending on your preferences and needs. You can also look at the budget in terms of only certain bank accounts, toggling between transactions in each account on the left sidebar.

One of the interesting things about this budget interface is that you can run various reports. These come out as very nice, color-coded documents that you could print off or store electronically, for an over-time view of your personal finances.

You can run reports for a variety of scenarios, including spending by category, spending versus available budget, income versus expenses, or spending for the month versus average spending by category. These over-time reports will become more useful the longer you use Quicken, which gives it more data to pull from. But some of the reports look like this:

Quicken 6

These reports could be really helpful if you’re trying to meet specific financial goals, like reducing spending in a few categories or tracking your budget over time.

What about upgrades?

My review has been based on the Quicken Starter option, but there are other options currently available, too. Here’s a quick breakdown of what they offer:

Quicken Deluxe

Quicken Premier

Quicken Home & Business

Quicken Rental Property Manager

Is Quicken right for you?

Quicken offers a load of great features, and its new interface is definitely more user-friendly than the last version I reviewed in 2014. If you want a one-stop-shop for tracking all of your personal finance details — from budgeting to investments to debt — then Quicken may be a worthwhile investment.

With that said, I don’t think I’d pay for the basic version of Quicken when free tools like Mint.com can do basically the same thing. My personal preference for budgeting is YNAB, though it does come with a $5/month fee.

However, if you want to add investment tracking and detailed financial planning into the mix, Quicken Deluxe might be a good option for you. And, of course, if you run rental properties or a small business, you can’t go wrong with the robust business-oriented versions of Quicken.

So, tell us: do you think Quicken is the right option for your personal finance tracking needs?

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After pulling out of a merger deal with Aetna, major insurance company Humana announced that it will drop out of the Affordable Care Act exchange in 2018. The company had already been scaling back its plans available on the exchange. For 2017, it was only selling policies in 11 states.

Although Humana has been a relatively small provider in the Obamacare healthcare marketplace, its pulling out of Obamacare may signal more changes to come. Humana cited an “unbalanced risk pool” as its reason for pulling out of the marketplace. But Humana, like many insurance companies, is likely anxious about the future of the entire Affordable Care Act.

Related: Insurance Giant Aetna Pulls Out of Obamacare

Congress and President Trump have promised to “repeal and replace” the ACA, but haven’t given many details about their plans. Because of this, many insurance companies have already pulled out of the healthcare marketplace.

According to the Kaiser Family Foundation, 18 states have only one or two insurers in their marketplaces in 2017. In general, insurer participation increased between 2014 and 2015, but dropped significantly between 2016 and 2017. Alabama, Alaska, Oklahoma, South Carolina, and Wyoming each have only one insurance company operating in their exchanges. Many states maintain diverse exchange offerings, but participating insurers are still on the decline.

So what does it mean for you?

As noted above, Humana was only offering health insurance plans in 11 states for 2017. If you’re one of the consumers currently covered by a Humana plan through the individual marketplace, you’ll have to find an alternative plan next year. You can, however, keep your current plan through the end of the year.

On a grand scale, Humana’s change of heart won’t directly affect many consumers. With that said, Humana’s exit puts even more pressure on the Republican Congress and White House administration to make some serious changes to the healthcare law.

More Ahead: President Trump’s Proposals for Childcare

With more insurers leaving the marketplace, those that remain are likely to increase their 2018 rates in an attempt to ward off further financial losses. Those costs will fall to the consumers if the law isn’t altered or replace quickly and efficiently.

It remains to be seen what sorts of changes the Trump administration and the Republicans in Congress have for the Affordable Care Act. But with major players like Humana pulling out, the pressure is on to come up with a solution–one the insurance companies can live with–sooner rather than later.

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Millennials Don’t Use Credit… But Should They?

by Abby Hayes

A recent survey by Bankrate showed that many millennials don’t carry credit cards on a day-to-day basis. In fact, just 33 percent of those surveyed in the 18 to 29 crowd even owned a credit card at the time of the survey. People in the 30 to 49 category carried significantly more plastic, with about 55 percent […]

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11 Ways to Start Preparing for the Holiday Shopping Pinch

by Abby Hayes

Does your New Year usually start with a resolution to pay off all that debt you racked up during the holiday shopping season? If so, you’re certainly not alone. Holiday retail sales increased 3 percent in 2015, and many consumers carried that extra spending into the new year in the form of new debt. The key […]

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33 Great Work-From-Home Jobs (That Are Legitimate)

by Abby Hayes

A reader recently wrote in asking about part-time, work-from-home jobs. The good news is that these jobs are easier than ever to find. The bad news is that they may also be more competitive than ever! Telecommuting is becoming easier, as technology advances and businesses see the advantages of hiring a remote workforce. In fact, […]

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How to Find the Most Affordable Cell Phone Plans

by Abby Hayes

Over the past few years, cell phone providers have declared an out-and-out war to win over consumers. This spells good things for the consumers, who can now take advantage of more low-cost cell phone plans than ever. These days, even the “big four” cell providers — Sprint, T-Mobile, AT&T, and Verizon — are lowering their […]

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How to Get Your Credit Report for Free

by Abby Hayes

Many consumers know that they can get a free annual credit report from each of the three credit reporting bureaus: Equifax, Experian, and TransUnion. But this report only shows your credit report, not your actual credit score. When you go to get your free annual credit report, the credit bureau will likely ask if you […]

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