This Week In Your Wallet: Aiming Too High?

This Week In Your Wallet:
Aiming Too High?

First, some good news for those of you who qualify for student loan forgiveness: The form is now live at Studentaid.gov, and can be filled out in English or Spanish. (The form also includes information on who qualifies + how it works, if you still have any questions.) You’ll just need all of your personal details handy, including SSN, birthdate, etc. And yes, technically you have until December 31, 2023 to get it in, but we think getting it off your plate before the end of 2022 is absolutely the way to go.

And in other news…

It was bound to happen eventually. With car prices climbing and interest rates rising for vehicle loans and everything else, is it any wonder more people than ever before are now shelling out $1,000 a month or more for a new car? Ouch! As Sarah O’Brien reports for CNBC, more than 14% of people who financed a new vehicle in the past three months signed up for loans that will cost them $1,000 every month — or more. That’s up a huge 8.3% over the same time period in 2021, per Edmunds. “For buyers of electric vehicles, [the year-over-year gain] is 26%; for hybrids, 24%.” Again, ouch.

What all of this means in dollar terms is that the average price for a new car is closing in on $46,000. By comparison, Kelley Blue Book shows the average price for a new ride in December 2019 hovering around $38,948. Does that mean you’re rethinking buying a new ride until things settle? (For me it does; I’m taking very good care of my Volvo.) On the flip side, those trading in a vehicle as part of a new purchase will likely get more for their late model sedan or SUV than we’ve seen in years past.

We’ve also heard tales of some people making thousands more for their used vehicles in private sales (that includes HerMoney.com EIC Kathryn Tuggle, who just sold a 10-year-old Prius for more than half what she paid for it in 2012. We discuss the ins-and-outs of private sales with an expert in this podcast episode.) And if you’d rather sell to a dealer, they’re also paying big bucks for your gently used wheels. The average trade-in value for September 2022 was an estimated $9,617 — up 21.7% from the year before.

Mandatory Salary Ranges to the Rescue

For many people hunting for a new job, there’s only one interview question even more dreaded than “What’s your greatest weakness?” It’s “How much are you looking to earn?” Aim too high and your resume could be tossed out with the rubbish. But aim too low – or say it’s “negotiable” — and you could be stuck earning less than you deserve. Both options truly suck. Which is why we were happy to read Ray A. Smith’s report for the Wall Street Journal detailing that California will begin requiring companies with 15 or more employees to disclose salary ranges beginning in January 2023. Colorado already has a similar law on the books and New York’s governor is eyeing a state-wide wage transparency plan, too.

There’s also this intel for job seekers: “Candidates should know that a lot of companies only post their pay-range minimums to meet the compliance requirements, which means salaries might be more negotiable than the posted data suggests in some cases,” Smith writes. Oooh. Keep that in mind the next time you’re researching how much certain industries pay, or sitting at the negotiating table. We’re just saying.

Rainy Day Funds To The Rescue

And while we’re on the topic of companies helping to boost employees' financial wellness (and reduce their financial stress): Starbucks is the latest in a string of companies that are now offering workers a way to save money in “rainy day” accounts, reports Ann Carrns for the New York Times. We know those with emergency savings are less likely to go into debt when they experience an unexpected expense such as a major car repair or medical bill. In some cases, employers are incentivizing emergency savings much like they do retirement savings by adding an employee match when workers contribute a specific percentage of their take-home pay to savings. With benefits renewal season coming up in November, check in with your HR department to see what new benefits your company may be offering. And, if you’re feeling like you’re having trouble getting on the savings bandwagon, check out the next session of my FinanceFixx program. It starts November 3.

The COLA That Refreshes

With inflation at a 40-year high, it’s welcome news for some 52 million retirees in the U.S. that we’ll see the largest cost-of-living-adjustment (COLA) in 40 years, reports Mark Miller for the New York Times. The Social Security Administration announced late last week an 8.7% adjustment for millions of Americans who receive monthly Social Security benefits, beginning in July.

And while this bump will make retirees' lives a little easier, it will also provide an extra cushion for nearly 18 million others who receive disability benefits and supplemental security income. There’s also a benefit for individuals on Medicare — the standard Part B premium (which most retirees see deducted from their Social Security benefits) will drop in price next year. It’s worth mentioning: This is the largest COLA increase since 1981, and the first time that SS benefits will increase at the same time the price of Medicare drops. Anecdotally, we’ve heard from a lot of seniors that the pandemic + rising costs for everything had taken travel (and countless other forms of fun) right out of the realm of consideration these last few years. We’re hoping these numbers will help retirees everywhere escape that check-to-check feeling of just getting by.

Have a great week!

Jean

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