How Do Minimum Wage Hikes Affect The Economy?

Young female at a retail bakery shop pulls fresh bread off shelf for a customerThe United States has one of the lowest minimum wages of any modern country in the world. Our modest salary floor impacts our economy on every level, from the rising underemployment rates to a bloated welfare program that chiefly rests on the backs of the struggling middle class.

But all of this is subject to change: The arrival of 2019 has brought a wave of minimum wage hikes at many state and local levels along with a push to bring the national minimum wage up to $15 by the year 2024. In total, 21 states and Washington DC have increased their minimum wages, with the biggest jump of $1.00 per hour more being passed in California, Maine and Massachusetts. There are now a total of 29 states with a minimum wage that surpasses the federal level, which has remained stagnant at $7.25 for more than a decade.

The recent wage increases impact 5.2 million workers across the country. While at first glance this might seem like fantastic news for the economy, financial experts are dubious about how recent hikes and the proposed increase in the federal wage will impact the national economy.

The push to boost the federal minimum wage to $15 an hour is more dramatic than any wage hike this country has ever seen. This factor makes it impossible for economists to draw on studies and actual history for conclusions about the effects of the proposed hike. However, based on market trends and the fundamental laws of economics, they’re predicting several negative fallouts from the hikes.

Let’s explore what happens when minimum wages increase.

How do wage increases affect the job market?

Economists are predicting the proposed hike in the federal minimum wage, along with the local and state increases that have already passed, will have two negative effects on the job market:

1.) A surge in move-outs to the suburbs
An increase in local and state government minimum wages will likely push employers to move across borders to avoid paying higher wages, particularly from central cities to suburbs.

For example, Washington, D.C. has raised its minimum wage to $14 an hour. This may lead to a mass exodus of Washington businesses as they move toward locations with lower minimum wages in surrounding areas. A move to a suburb like Arlington, Virginia, where business owners can pay their workers almost half the hourly wage they’d need to cover in Washington, will help them remain profitable.

2.) Businesses cutting corners
Businesses forced to double their workers’ pay or even to modestly increase it will need to find a way to continue turning a profit. They will likely attempt to cut corners any way they can. This may translate into letting workers go, replacing humans with robots where possible, or even cutting down on their level of service to reduce the need for human resources. For example, fast food joints might start using machines instead of human workers and hotel chains may start skimping on their cleanups between guests to compensate for increased payroll.

Regardless of the way that businesses choose to cut corners, it will likely lead to an increase in unemployment rates and underemployment rates across the country. It may also trigger a surge of illegal work among workers who suddenly find themselves out of a job.

How do wage increases affect the consumer?
When all the dust settles, it is the average consumer who will likely bear the brunt of the minimum wage hike.

Most companies hiring minimum-wage employees are small businesses with profit margins that are too thin to absorb a serious hike. These businesses will be forced to pass on their higher expenses to consumers. Grocery prices will shoot up, labor costs for services and repair persons of any kind will rise, and fast food meals will see a noticeable price increase.

Predictably, the consumers most likely to be affected by the hike are the poor and middle class, who tend to frequent businesses that hire minimum-wage workers. Ironically, the same workers rejoicing over the proposed hike will likely be those who have to pay for it most.

How do wage increases affect federal taxes?
One positive impact of a minimum wage hike is the hope that an increase in wages will reduce the number of workers who are dependent upon government assistance programs, thus reducing the average taxpayer’s burden. Of course, this is pure speculation and is not based upon any studies of similar increases.

Also, when low-wage workers are pushed over the qualifying threshold for government assistance, they may be coming home with less pay after a wage hike.

While no one can say for sure how a minimum wage hike will affect the economy on a national and individual level, economists predict it is far more likely to have a negative effect than a positive impact.

Your Turn:
Do you support a dramatic minimum wage hike? Why, or why not? Share your opinion with us in the comments, below.

SOURCES:
https://www.google.com/amp/s/www.washingtonpost.com/amphtml/news/wonk/wp/2018/01/11/what-does-a-15-minimum-wage-do-to-the-economy-economists-are-starting-to-find-out/

https://www.google.com/amp/s/www.forbes.com/sites/adammillsap/2018/09/28/how-higher-minimum-wages-impact-employment/amp/

https://www.google.com/amp/s/www.brookings.edu/opinions/a-15-hour-minimum-wage-could-harm-americas-poorest-workers/amp/

https://www.heritage.org/jobs-and-labor/report/15-minimum-wages-will-substantially-raise-prices

https://www.google.com/amp/s/www.usnews.com/news/best-states/articles/2018-12-31/minimum-wage-increases-in-20-states-in-2019%3Fcontext%3Damp

https://www.google.com/amp/s/amp.businessinsider.com/minimum-wage-2019-state-map-2018-12

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Plant Your Money Tree: A Guide To Growing Your Wealth

plant your money tree coverWouldn’t life be fantastic if you had that mythical money tree growing in your backyard?

Short of planting a tree that actually sprouts dollar bills, learning how to boost your income and investing wisely is the best thing you can do for your finances. And the soon-to-be-released Plant Your Money Tree, by Michele (Mish) Schneider, will show you how to do exactly that.

In clear and easy-to-understand language, Mish takes readers on a journey through the six significant sectors of the U.S. economy as seen through six market phases: bullish, caution, distribution, bearish, recuperation and accumulation. She demonstrates how to identify these phases and understand their interconnectivity, and illustrates to readers why this all matters.

Mish uses a light, chatty tone throughout the book, proving that anyone can grasp the basics of the economy and how to grow wealth, regardless of their financial and educational background. She strongly believes that knowledge is power. In her book, Mish endeavors to empower readers with the knowledge to make confident, educated decisions about personal finance.

In Plant Your Money Tree, you’ll learn how to make informed decisions about your money, including:

  • What to do with your money
  • How to help your money grow
  • When and how to make financial life decisions, such as a career change, business expansion, buying a house and increasing your monthly savings inputs
  • How to invest in the future and capitalize on social trends
  • How to manage and maximize your existing portfolio and 401K

Mish also offers readers an investing methodology that is evergreen and easily adaptable to every market scenario. There is no such thing as a losing market for Mish; her strategy shows investors how to reap handsome profits in any market condition. Her book is an invaluable resource for beginner investors and seasoned experts alike.

In Plant Your Money Tree, Mish draws on her years of experience as director of trading, research and education at MarketGauge.com, a financial publishing company founded by her husband Keith, and his partner, Geoff Bysshe. She weaves real-life examples, charts, and history throughout the book to prove her points and create the masterpiece that can guide you to success.

Your Turn:
What’s your favorite investing book? Tell us about it in the comments.

SOURCES:
https://www.amazon.com/gp/aw/s/ref=is_pn_1?fst=as%3Aoff&rh=n%3A283155%2Ck%3Apersonal+finance+books&page=2&sort=date-desc-rank&keywords=personal+finance+books&ie=UTF8&qid=1548732533

https://rowman.com/ISBN/9781538122570/Plant-Your-Money-Tree-A-Guide-to-Growing-Your-Wealth

5 Ways To Pay Off A Loan Early

Young couple plans out payments at kitchen tableIf you’re like most Americans, you owe money toward a large loan. Whether that means carrying thousands of dollars in credit card debt, having a hefty mortgage in your name or making car loan payments each month, loan debt is part of your life. This means you’re looking at hundreds of dollars in interest payments over the life of the loan(s). There’s also the mental load of knowing you owe perhaps tens of thousands of dollars and that you’ll be paying back the loan for years to come.

It can all get kind of depressing—but it doesn’t have to be that way.

Did you know there are simple, but brilliant, tricks you can employ to lighten the load? With a carefully applied technique, you can pay off your mortgage, auto loan, credit card debt and any other debt you’re carrying quicker than you thought possible. These tricks won’t hurt your finances in any dramatic way, but they can make a big difference to the total interest you’ll pay over the life of the loan and help you become debt-free faster.

You can free up more of your money each month, use your hard-earned cash for the things you want instead of forking it over in interest and live completely debt-free sooner than you’d dreamed. It’s all possible!

A note of caution before we explore these tricks: Check with your lender before employing any approach, as some loan types have penalties for making extra or early payments.

1. Make bi-weekly payments
Instead of making monthly payments toward your loan, submit half-payments every two weeks.

The benefits to this approach are two-fold:

  • Your payments will be applied more often, so less interest can accrue.
  • You’ll make 26 half-payments each year, which translates into an extra full payment on the year, thereby shortening the life of the loan by several months or even years. If you choose this method with a 30-year mortgage, you can shorten it to 26 years!

2. Round up your monthly payments
Round up your monthly payments to the nearest $50 for an effortless way to shorten your loan. For example, if your auto loan costs you $220 each month, bring that number up to $250. The difference is too small to make a tangible dent in your budget, but large enough to knock a few months off the life of your loan and save you a significant amount in interest.

For a potentially even bigger impact, consider bumping up your payments to the nearest $100.

3. Make one extra payment each year
If the thought of bi-weekly payments seems daunting but you like the idea of making an additional payment each year, you can accomplish the same goal by committing to just one extra payment a year. This way, you’ll only feel the squeeze once a year and you’ll still shorten the life of your loan by several months, or even years. Use a work bonus, tax refund, or another windfall to make that once-a-year payment.

Another easy way to make that extra payment is to spread it out throughout the year. Divide your monthly payment by 12 and then add that cost to your monthly payments all year long. You’ll be making a full extra payment over the course of the year while hardly feeling the pinch.

4. Refinance
One of the best ways to pay off your loan early is to refinance. If interest rates have dropped since you took out your loan or your credit has improved dramatically, this can be a smart choice for you. Contact [credit union] to ask about refinancing. We can help even if your loan is currently with us.

It’s important to note that refinancing makes the most sense if it can help you pay down the loan sooner. You can accomplish this by shortening the life of the loan, an option you may be able to afford easily with your lower interest rate. Another means to the same goal is keeping the life of your loan unchanged and with your lower monthly payments, employing one of the methods mentioned above to shorten the overall life of your loan.

5. Boost your income and put all extra money toward the loan
A great way to cut the life of your loan is to work on earning more money with the intention of making extra payments on your loan. Consider selling stuff on Amazon or eBay, cutting your impulse purchases and putting saved money toward your loan, or taking on a side hustle on weekends or holidays for extra cash. Even a job that nets you an extra $200 a month can make a big difference in your loan.

Triumph over your loans by using one or more of these tricks to make them shorter and pay less interest. You deserve to keep more of your money!

Your Turn:
Have you used any of these methods or a different approach for paying off a loan early? Tell us about it in the comments.

SOURCES:
https://www.thebalance.com/how-to-pay-off-debt-early-315571

https://www.google.com/amp/s/www.huffpost.com/entry/top-6-ways-to-pay-off-any-loan-faster_b_1624242/amp

https://www.payoff.com/life/money/6-ways-to-pay-off-your-car-loan-early/

Step 1 Of 12 Toward A Debt-Free Life: Take Stock Of Your Debt

Young black woman working on her budget on a laptopYou’re determined that this will be the year you finally pay down (or pay off) that debt. Get ready, because every month, our Do It Today plan will have you taking another step on your journey toward living a debt-free life.

First, sit down and take stock of all your debts. Don’t let the numbers scare you; you need to do this to move forward. Get out every single credit card bill, personal loan, student loan, and any other debt you’re carrying (except your car and mortgage payments). Tally up the numbers to give yourself an idea of what you’re dealing with.

Next, organize your debt into different categories, such as credit card debt, student debt, personal loans etc. Use a spreadsheet to list your debt, the remaining term of each loan (if applicable), the minimum payment and the interest rate.

Finally, designate one hour each week for working on your finances.

Your Turn:
Did you take stock of all your debt? Did the numbers surprise you?

Review – Cloud Storage Apps

With the incredible convenience of today’s cloud storage services, you never have to lose your files again.

But with so many free cloud storage apps, the choices can be confusing. Let’s take a look at some of the most popular cloud storage services on the market.

Google Drive
Google Drive is already integrated with all Android devices, making it the natural choice for Android owners. The app also syncs automatically with Google’s G-Suite, so if you’re a Google fan, it’s easiest to go with their cloud storage. Download the companion app, Google Photos, onto your mobile device, and you’ll be able to store high-def photos in the cloud as well.

Best Features
Google Drive offers 15GB of free storage space, the most generous amount of all cloud storage apps. The total storage is distributed across all your Google services, like Gmail and Google+Photos, but you can choose how to split the 15GB to best suit your needs.

Folders and files are super-easy to share on Google Drive via email or link. You can choose to send view-only files or allow for edits and comments, making teamwork almost effortless. Google Drive will also store all deleted files in the “Trash” until you empty the bin.

Glaring Glitches
Users complain that Google Drive’s web interface isn’t the best, and it can be difficult to use.

Pricing

  • 15GB: Free.
  • 100GB: $1.99/month
  • 200GB: $2.99/month
  • 2TB:$9.99/month
  • 10TB:$99.99/month
  • 30TB:$299.99/month

OneDrive
Microsoft’s OneDrive integrates directly with Windows without the assistance of any additional apps. It’s the easiest storage solution for Microsoft Office users.

With some companion apps, OneDrive will work even harder for you. Download Microsoft’s Photo app, and you’ll be able to use OneDrive to sync pictures across all your devices. You can also install a desktop program to seamlessly transfer all kinds of folders and files to OneDrive and make them accessible from a mobile device.

OneDrive’s mobile app is available for Android, iOS and Windows Phone.

Best Features
OneDrive’s outstanding feature is its file restoration, which keeps all your files until you’ve deleted them twice, a big plus for click-happy users who often mistakenly delete important files.

OneDrive also allows you to share folders and files with non-registered users. You can choose to allow others to edit your files or to view-only.

Glaring Glitches
The 5GB of storage space in OneDrive’s free version can be tight if you’ve got large files to upload. Users also complain that the OneDrive app is clumsy and inefficient.

Pricing

  • 5GB: Free
  • 50GB: $3/month
  • 1TB: $8/month
  • 5TB: $11/month

Apple iCloud logo, white cloud silhoueet on radiused corner box that ranges from dark blue at the top to lighter blue at the bottomApple iCloud
Apple’s iCloud is competitively priced and integrates seamlessly across all Apple platforms.

Best Features
The Mac Finder app automatically integrates iCloud Drive and allows you to store all kinds of files in the cloud. All documents created in the iWork office suite will be saved to iCloud and can be synced across all your devices.

If you use Windows for work, but you own an Apple device, iCloud Drive will allow you to sync your Windows files so you can access them wherever you are. iCloud also allows you to restore deleted files for up to 30 days after deletion.

Glaring Glitches
With only 5GB of storage, iCloud’s free service might not be sufficient for your needs.

Pricing

  • 5GB: Free
  • 50GB: $0.99/month
  • 200GB: $2.99/month
  • 2TB for $9.99/month

Dropbox
Dropbox is one of the most popular cloud storage services on the market, offering a modest 2GB of free memory with ways to upgrade at no cost by referring other users. Deleted files are saved in the cloud for 3 days, so most mistaken deletions can be easily recovered.

Best Features
Dropbox is super-popular, largely due to its simplicity and ease of use. File uploads happen faster than most free cloud storage services and Dropbox Paper, the document collaboration technology on Dropbox, gives users a genuine feel of workplace collaboration. The app’s powerful file-search tool adds to its all-around convenience.

Glaring Glitches
Dropbox’s free version offers a tight 2GB of storage space.

Pricing
Dropbox offers a wide range of options for both private users and business owners who need shared storage space for multiple users.

  • 2GB: Free
  • 1 TB, 30-day history tracking, Office 365 integration: $9.99/month
  • 2 TB, 120-day history tracking, custom branding and analytics: $19.99/month
  • 3TB, account transfer tools, shared team folder: $15/month/user
  • Unlimited storage space, all Dropbox features: $20/month/user

How they stack up

App                     Free Storage     Easy to Use     File Restoration (30 days)
Google Drive       15GB                         No                     Yes
OneDrive             5GB                          No                      Yes
iCloud                  5GB                          Yes                     No
Dropbox              2GB                          Yes                      No

Your Turn:
What’s your favorite cloud storage service? Tell us all about it in the comments!

SOURCES:
https://www.google.com/amp/s/www.techradar.com/amp/news/the-best-cloud-storage

https://productivityland.com/lists/best-free-cloud-storage/

https://www.lifewire.com/free-cloud-storage-1356638

5 Tips For Your First Spring Break On A Budget

Three young ladies make plans by a pool in a tropical locationIt’s your first spring break and you’re totally psyched! But that doesn’t mean you need to break the bank. Have yourself an awesome time without blowing your budget by following these five spring break tips.

Check your school for discounts and help
Lots of colleges offer on-campus travel agents who can help you plan your vacation right by snagging the best deals. Plus, your school may be able to get you special discounts.

Don’t pay full price
Before booking any hotel stays or attractions or going out to eat, check out sites like Groupon, LivingSocial, Restaurant.com and CouponCabin. Look through the tourist brochures you’ll find in hotels, too. Why pay full price if you don’t have to do it?

Fly for less
Get the best deals on flights by clearing your web browser cache before searching. Book on a Tuesday that’s six weeks before your flight for the time window offering the lowest prices. Also, consider flying mid-week for the best deals.

Use Hopper, Hipmunk or Travelocity
Download one or all of these apps for help in scheduling, pricing and organizing your trip. You’ll have access to exclusive deals, plus loads of suggestions for local tourist hotspots to help you plan your stay.

Dine in
Don’t assume you need to eat each meal at another restaurant. Instead, stock up on basic supplies at the grocery and eat most of your meals in your hotel room. Take advantage of the continental breakfasts that many hotels offer. You can also pick up food from a street vendor for a fraction of the price.

Spring break doesn’t have to mean a break from budgeting. Plan ahead and choose wisely so you won’t be paying off your vacation all summer long.

Your Turn:
How do you save on spring break? Share your secret tips with us in the comments!

SOURCES:
https://www.studentuniverse.com/travel-guides/spring-break/spring-break-on-a-budget

https://www.fastweb.com/student-life/articles/spring-break-budget-

https://www.moneytalksnews.com/26-tips-save-spring-break-2013/

Student Loan Scams

Hand holding a small, white, porcelain piggy bank with "student loan" handwritten on the side.Scammers will try anything to fool college students into parting with their money. Don’t get hooked! Here’s what you need to know about three popular student loan scams.

1.) Student loan forgiveness scam

In this scam, a student loan debt company will contact you offering to forgive your student loan for a fee.

Sounds like a dream? Unfortunately, it’s more like a nightmare. No student loan company would completely forgive your loan, even for a fee. You’ve just been targeted by a scam.

This scam attempts authenticity by sounding like Public Service Loan Forgiveness, a legitimate federal government program for public servants with federal student loans. If you fall for the scam, you’ll still need to pay off your loan, plus you’ll lose the money you shelled out for the “fee.”

2) Student loan consolidation scam
In this scenario, a student loan company will promise to consolidate your loans and lower your monthly payments, all for a fee.

Here’s your clue that this is a scam: Though some institutions can refinance student loans, only the federal government has the power to consolidate it. And they’ll do it for free.

If you’re looking to consolidate your student loans, check out Studentloans.gov.

3.) Student loan tax scam
In this con, a scammer will spoof the IRS’s toll-free number, claiming the student owes thousands of dollars for a “federal student loan tax.” The scammer will demand immediate payment upon threat of arrest or a lawsuit. They’ll also insist on a specific method of payment, like a wire transfer.

Here’s the deal on this scam: The “federal student loan tax” does not exist. Also, the IRS will never contact you by phone without first notifying you via mail, and they won’t demand payment over the phone or insist on a specific payment method.

If you’re targeted
If you’re targeted by a student loan scam, don’t engage with the scammer. Hang up as soon as you recognize it and delete any suspicious emails that land in your inbox.

Next, bring the scam to the attention of the authorities. File a complaint with the FTC at ftc.gov, alert local law enforcement agencies and report any tax-related scams at IRS.gov.

Finally, be sure to warn your friends about a circulating scam.

Your Turn:
Have you been targeted by a student loan scam? Tell us all about it in the comments.

SOURCES:
https://typicalstudent.org/hot/your-money/3-popular-student-loan-scams-2019

https://thecollegeinvestor.com/317/top-student-loan-scams/

https://www.google.com/amp/s/www.forbes.com/sites/zackfriedman/2019/01/21/student-loans-scams/amp/