This Week In Your Wallet: What Silicon Valley Bank And Equal Pay Day Mean To You

This Week In Your Wallet:
What Silicon Valley Bank And Equal Pay Day Mean To You

First, today is Women’s Equal Pay Day, a day we wish wasn’t on our calendars at all, because it marks the day into the calendar year that the average woman must work — for free — until she reaches pay parity with the average man. In 2023, women earn just 84 percent of what men do (among full time workers), and for women of color the gap is much greater. So, what can we do that’s actually going to move the needle? For starters, we can negotiate. We can ask not just for a raise, but also for pay transparency. We can sing our accomplishments from the rooftops, demand more opportunities, and we can refuse to shy away from confrontation. Here’s a look at everything women can start doing today — and keep doing until Women’s Equal Pay Day is reset to January 1st where it belongs.

What SVB Means To You

I also wanted to point you to some important insight into the most shocking and confusing news of the week: The Silicon Valley Bank (SVB) collapse. For years, SVB was the bank to the venture capital (VC) and tech sectors. So, where did it all go wrong? Allow me to point you to Karen Finerman’s excellent explainer here, which details how the bank was forced to sell treasuries at a loss in order to pay an ever-increasing number of depositors who needed their money. Once famous VC investors warned their VC-backed companies to pull their money out, too, it was like adding kerosene to a fire that was already burning.

It’s too early to say exactly what will happen next — the failure of SVB was followed by the collapse of Signature Bank, and on Monday stocks of other regional banks were down big, though they snapped back at least somewhat on Tuesday morning. And, while a weekend attempt at selling off SVB via auction failed, the FDIC is planning to try again. Finerman predicts that some combination of JP Morgan, Bank of America, or Morgan Stanley may eventually buy SVB.

Meanwhile, although stock and bondholders in the failed banks are out of luck, depositors in both SVB and Signature have been backstopped by the government and won’t lose a thing. (How is this possible? The government designated them as “systemic risks to the financial system.” That gave them the leeway to insure otherwise uninsured deposits.” Which brings me to … you.

FDIC insurance covers deposits of up to $250,000 per individual or $500,000 jointly with any single bank — that can be in cash, but also in CDs. If you have more than that with a single institution, no matter how large that bank is, it’s time to consider moving it somewhere else. The good news is: These days, you don’t need to look far to earn more than 4% on your money.

(Ironically, Karen and I spent a lot of time talking about how the very Treasuries that got SVB in trouble might actually be a good addition to your portfolio in last Monday’s Investing Fixx session.) If you’re interested in learning how to invest, consider joining us in our version of an investment club for women everywhere. The investments our members have picked for the group portfolio are not only beating the market #justsayin’, but we’re also having fun doing it. Please join us at portal.investingfixx.com and sign up for your 30-day free trial.

Looking To The Future…

Americans — economists among them — sometimes have short memories. Maybe it’s because we tend to focus on the last bad thing. Like: The Great Recession from 2007 - 2008, or that gut-wrenching month when stocks took a nosedive in early 2020. Or, this week, SVB’s failure. While our current economic predicament with decades-high inflation and rising interest rates may feel unprecedented, if you go back a bit in history, say, 80 years, “the current cycle starts to make sense, though it’s no easier to predict,’explains The Wall Street Journal’s Greg Ip.

Federal Reserve Chair Jerome Powell told Congress last week “nobody had seen supply chains collapse, [or] labor-force participation plummet,” noting that the pandemic brought “a bunch of firsts.” Only they weren’t exactly firsts, Ip writes. “A loss of oil supply contributed to inflation and recession in 1973 and 1980. Inflation rose sharply after the end of World War II in 1945 and the start of the Korean War in 1950 as industry struggled to adapt to the shifts between military and civilian demand.” And in 1973 and 1981, he reminds us, the Fed induced recessions to tamp inflation down… Fast forward to today, and we see that strong economic indicators continue to be not-so-great news because they mean the Fed probably won’t stop raising rates any time soon. (Inflation numbers that came out yesterday showed that things had cooled just a bit in February, leaving us with an annual inflation rate of 6.4%. The general consensus among economists is that we’ll see another quarter-point rate hike from the Fed.) As for that looming recession, maybe we’ll have one, maybe we won’t. For now, we’ll continue to watch, wait, and update you here every week as soon as we discover something new.

Resetting Your Personal Economy

And while we’re on the topic of the economy, something we have more much control over than we may realize is our personal economy. I had a great conversation recently with my pal Jill Schlesinger, a CBS Business News Analyst, CFP and author of “The Great Money Reset.” During the pandemic, she began taking more questions on her radio show from people who were unhappy with their work and life situations. Many of them needed a financial reset. Check out her thoughts on how people can reimagine their retirement ( and suggestions for real-life action plans we can all learn from.

Could Your Tax Preparer Be a Crook?

When most of us think about worst-case scenarios with our income taxes, visions of an audit may mambo in our heads. But there’s something far worse we should keep an eye out for: the potential that our tax preparer isn’t on the up-and-up. Unfortunately, scammers don’t just lurk on the dark web. They can also be seemingly-legit people (who we may know through a friend-of-a-friend, for example) posing as tax preparers in order to gain access to our personal information. Yikes.

And with just about a month left before many taxpayers file returns on April 18, The Washington Post’s Michelle Singletary offers us seven red flags to watch out for when selecting someone to handle our taxes. For example: Be suspicious if they promise you a big refund upfront, or if they don’t want to sign your return. You should also make sure they have a tax identification number, which is required by the IRS. Go online to irs.gov and search for “Directory of Federal Tax Return Preparers.” And if you can’t find your person there, it’s time to sever ties.

Applying For a Mortgage? Do These Things First

It can be difficult to understand how much money you can actually save by having an even slightly better credit score. For those looking to invest in real estate (or for those who anticipate taking out a loan to buy a new vehicle in the next six months or so), The Wall Street Journal’s Veronica Dagher is here to remind you that every single point counts. She uses an example from a recent Bankrate analysis of FICO data: Someone with a credit score of 760 or better, she notes, and a roughly 6.37% mortgage rate, would pay about $122 less per month for a $300,000 mortgage than someone with a credit score between 660 and 679 who receives a 6.98% mortgage rate.

Ted Rossman, a consumer-spending analyst at Bankrate told the WSJ: “That adds up to roughly $43,920 in savings over the 30-year term of the mortgage.” We can think of better ways to use that money (ahem, investing) instead of paying interest. Now for the good news: There are a few untraditional steps you can take to maintain or bump up your score: You can ask for a rescore from one of the big three credit reporting companies, hold off on applying for new credit, pay down high-interest debt (if possible), and ask for a credit limit increase on a card with a high balance. You can should also pay your bills on time, every time. Over time, your score will move on up.

Have a great week,

Jean

HerMoney is not a client, agent, representative or affiliate of EFE. Edelman Financial Engines (“EFE”) is a sponsor of the "HerMoney with Jean Chatzky Podcast,” created by HerMoney Media. Inc. (“HerMoney”) and provides cash compensation to HerMoney Media. HerMoney receives a sponsorship fee from Edelman Financial Engines depending on the number of podcast downloads, as measured by the end of the calendar year. The sponsorship fee is paid on a quarterly basis each year. In turn, HerMoney also provides promotional deliverables regarding EFE on the HerMoney podcast, newsletter, and social media channels. Due to this sponsorship arrangement, HerMoney has an incentive to endorse EFE and its services.

The HerMoney podcast is proudly supported by Edelman Financial Engines. Get sophisticated wealth management for all aspects of your financial life. See more at EdelmanFinancialEngines.com.
Sponsored by Edelman Financial Engines – Modern wealth planning.
All advisory services offered through Financial Engines Advisors L.L.C. (FEA), a federally registered investment advisor. Results are not guaranteed. AM1969416

We maintain a strict editorial policy and a judgment-free zone for our community. We strive to remain transparent in everything we do. Website posts and newsletters may contain advertisements, links and mentions of products from our partners. Learn more about how we make money.