Snacks, Suez, Stimulus, and Shots
A recent study revealed that the average American gained 1.5lbs per month during the pandemic[i]. Does this number surprise you? Maybe not. We were (some still are) stuck at home for months on end with nothing but work and snacks by our side (and oh yeah – our loved ones, too).
Maintaining good habits concerning our physical health is vitally important. The same goes for mental and emotional health. But what about your financial health?
We truly hope you and your family have remained safe and healthy over the last 13 months (it seems like we just keep counting the months). Part of being healthy, however, is feeling confident about your finances.
Building good habits today goes a long way to achieving your goals. The good news is that Americans appear to be coming out of the COVID storm somewhat healthy.. financially, that is. In finance, we geek out over numbers as you might suspect. The chart below tells an interesting story.
US Personal Savings Rate
The pandemic may have expanded our waistlines, but it also swelled our bank accounts. Stimulus after stimulus helped, but we usually exhibit animal spirits when times get tough. We get defensive. We save more.
Many pundits talk about the next great economic boom being right on our doorstep as the economy reopens. Maybe that will happen, maybe it won’t quite live up to expectations. The important thing is that you and I are sure to not go overboard on spending. Maintaining a healthy savings rate will always be important.
Avoid the headlines. Or at least chuckle at them.
Another interesting story last week that made the nightly headlines was the big cargo ship that got stuck in the Suez Canal[ii]. Let’s take a moment to explain the global economic impact on multinational corporations’ supply chains as a result of this calamity.
Or let’s not.
These sorts of headlines are probably impactful to global economies, to be sure, but your financial situation is more important. Interestingly, IKEA said the Suez snafu will harm their availability of products, so if you’re an IKEA shopper this is rather devastating. But seriously – something that will impact your life is what’s going on with taxes.
Taxes & government spending remain uncertain
We mentioned last week that the usual April 15 tax deadline was pushed back to May 17. You have a little more breathing room if you haven’t filed already. If you have filed and received unemployment income in 2020, it would be wise to file an amended return as a chunk of unemployment income was just changed to be non-taxable.
Another topic we want to discuss is future possible tax rate hikes. Never a popular subject.
President Biden is readying himself for a battle as the 46th POTUS seeks to make high-income individuals and families pay more income and capital gains tax. Corporations also have a target on their back. The stated goal is to raise money for a massive infrastructure bill to improve our roads, bridges, schools, hospitals, and the like.
Details are sketchy so far, but if the tax hikes pass and the $3 trillion infrastructure bill goes through, there will be impacts – some good, some not so good – to nearly everybody. It’s something to monitor as our dear friends in DC continue to make changes[iii].
Get your shots
Last on our radar is some good news. Last week, Michigan expanded the COVID vaccination qualification to include everyone 50 and older and those over 16 who have a disability or underlying condition[iv]. We are slowly but surely on the path to recovery while cases are on the rise here in Michigan.
Be safe and have a great week!
[i] https://www.nytimes.com/2021/03/22/health/virus-weight-gain.html
[ii] https://www.cnbc.com/2021/03/25/suez-canal-blocked-ship-billions-trade-standstill.html
[iii] https://www.forbes.com/sites/sarahhansen/2021/03/23/new-biden-tax-hike-details-are-out-heres-what-we-know-now/?sh=54f3b5554a5d
[iv] https://www.freep.com/story/news/health/2021/03/23/michigan-detroit-covid-19-vaccine-eligibility/6964955002/