If you’ve been reading financial news, you’ve probably followed the great debate about inflation: Are today’s prices—rising on homes, lumber, gas, and plenty of other stuff—just a blip, or is it the 1980s all over again?
And you likely haven’t missed all the coverage of what those sky-high prices are doing to the housing market. Affordability has become an increasing problem as eager buyers exhaust the depleted inventory of homes for sale. Believe it or not, despite this sometimes frenetic seller’s market, the volume of U.S. home sales has actually fallen for a third straight month.
If your budget has indeed kept your attention lately, here’s what you may not have heard. Did you know that among all those fun online quizzes, there’s one to test your federal budget personality? Or that younger women are far more likely than baby boomers to let their spouses steer the household finances?
To reach beyond the biggest headlines, we scoured the latest research, surveys, studies, and commentary to bring you the most interesting and relevant personal finance news you may have missed.
What We Found
What’s Your ‘Federal Budget Personality?’ Minimalist, People Pleaser?
Against a backdrop of soaring national debt, President Joe Biden’s ambitious multi trillion-dollar spending plans have a lot of people hotly debating the merits of big versus little government and, in turn, the virtues of more borrowing versus increasing taxes.
Not sure exactly where you stand? The Committee for a Responsible Federal Budget, a nonprofit budget watchdog, can help. Thanks to a new series of online quizzes and games it just launched, not only can you test your knowledge of how the federal budget works, but you can gauge your budget personality and how your priorities match up.
Depending on whether you agree with 24 statements like “we should reduce the size of the military” and “since the government can always print more money, there's no need to worry about the federal debt,” you’ll be assigned to one of eight categories, including “people pleaser,” “individualist” and “enterpriser.”
Maybe you’re a ‘futurist’ who believes in investing in our country, within limits. Or a ‘minimalist’ who thinks less is more when it comes to government. The test might even brand you a “big spender” who is “fiscally irresponsible” in prioritizing the health and education of children in spite of a high debt burden.
Other widgets let you toy with how you would split federal spending between the old and the young, determine how much spending should be funded by taxation versus adding debt (and who should be taxed), and decide whether we should spend more or less on a variety of things including healthcare, the environment, the military, and yes, interest payments.
If you simply want to test your knowledge of the current system, you can take a Budget IQ quiz to find out where you rank on a scale from “student” to “wonk.” (It might already say something about your personality if you’re interested in taking any of these quizzes.)
One extra tidbit? As part of the group’s effort to educate and foster public discussion, it’s easy to invite your friends to take the quiz and share your results with them.
“We invite citizens to learn, discuss, and share their thoughts with lawmakers, and, we hope, have fun in the process,” Maya MacGuineas, the committee’s president, said in a press release.
NY Fed to Probe Why So Many Can’t Cover a $400 Expense
It’s an often-asked question, with an answer that makes headlines: What percentage of Americans could cover an unexpected $400 expense with cash or its equivalent? When the Federal Reserve last asked that question in a survey in November, the answer—just released this month—was 64%, down from 70% in a July survey but still a bit better than the 63% seen in 2019 and the even lower percentages of the previous several years.
Still, that means 36% of people in the latest survey didn’t have the financial cushion to cover a $400 emergency. Instead, they would be forced to borrow the money (often carrying a balance on a credit card, but maybe taking out another form of loan,) sell something, or even just not pay.
And even worse, when broken out by race and ethnicity, more than half of Black and Hispanic respondents were in that boat, about twice the 28% of White, non-Hispanic respondents. What’s more, the improvement last July was attributed to pandemic relief measures like the government’s stimulus payments, a sign that under normal circumstances even fewer may be able to cover such an expense.
So what’s behind this ongoing problem? A team at the Federal Reserve Bank of New York has set out to determine exactly that, and how best to tackle it. In addition to planning independent research and analysis, the group is recruiting grassroots workers and nationally known experts to weigh in on this question, aiming to come up with ways to foster resilience among low and moderate-income families.
“As we weigh measures of the overall health of the economy, this indicator—call it the $400 question—is flashing a warning,” the New York Fed’s community development team wrote in a recent blog post. “It signals that even during October 2019—a time of low inflation and low unemployment—millions of Americans were one trip to the ER, one car breakdown, or one missed paycheck away from a financial emergency.”
Dreaming of Far Away Lands
If a staycation is not exactly what you had in mind this summer, you’re not alone. A new pair of surveys from the staffing firm Robert Half shows that burnout has not only left professional workers ready to take those long overdue vacations, but the majority don’t want those vacations to remind them of work in any way.
Fifty-seven percent of workers in one poll said they were ready for an “awaycation,” traveling and completely disconnecting from work, compared with 32% favoring a staycation (a stay-at-home vacation) and only 11% preferring to combine work and leisure. A quarter of them said they had forfeited paid time off in 2020, and 33% planned to take more than three weeks of vacation this year.
"After enduring more than a year of long hours and little time off, many workers are feeling burned out and need a break to relax and refresh," Paul McDonald, senior executive director at Robert Half, said in a statement about the survey results. "Running on empty can have a negative effect on employees' mental health and well-being, and managers should make it a priority to encourage their teams to enjoy a well-deserved vacation."
Indeed, long hours and heavy workloads are leading to increased burnout. A separate poll showed 44% of workers are feeling more burned out than they did a year ago, compared with 34% who said the same in a similar poll in 2020. The poll on vacation was taken in March and April; 2,800 U.S. adult workers were surveyed. The second poll surveyed 1,000 U.S. adult workers in April.
Millennial Women in Gender Role ‘Time Warp’ on Money Matters
Here’s a new spin on the honeymoon stage. While most millennial women want to share in or take the lead on financial decisions ahead of marriage, that desire doesn’t seem to survive the wedding, according to the findings of a recently released poll of 1,500 investors in marriages or partnerships with significant investable assets. In fact, the surprising results had UBS, the Swiss wealth manager that commissioned the poll, wondering why some women seem stuck in a “time warp” when it comes to gender roles.
“Our findings reveal that many women let their spouse make long-term decisions primarily because they feel he knows more,” UBS wrote in a recent report on the survey, taken Jan. 26-Feb. 1. “Or they simply do what their mothers did—and let men take the lead. Two-thirds of women who defer say they just want to be taken care of.”
Perhaps most surprising, millennial women (age 25-40) are more likely than women in Generation X (41-56) and the baby boomer (57-75) age groups to defer to their spouse on decision-making about long-term finances, and less likely to take part equally, according to the survey.
Specifically, 51% of married millennial women said they deferred to their spouses, 34% said they took the lead, and only 15% said they equally shared decisions. By contrast, among boomer women, 43%—almost triple the millennial share—said they shared decisions equally and 40% said they deferred to their spouses. Only 16% of boomers said they take the lead.
Interestingly, among women who defer to their spouses, the poll did show the greatest desire to change among millennial women. Sixty-nine percent said they wanted to be more involved in finances, compared to 29% of boomer women.