It might not seem like it, what with all the sunshine and hot summer temps, but 4th quarter is nearly upon us. Now is the perfect time to start thinking about…your taxes. There, I said it. I know no one likes to think about taxes, and while it may seem a bit early to worry about taxes, the end of the year will be here before you know it, and it’s never really too early to review, organize, and plan for filing your taxes.

End-of-year tax planning is a practice that involves making financial decisions aimed at optimizing tax efficiency, reducing liabilities, and taking advantage of available deductions and credits. Effective tax planning not only ensures compliance with tax laws but also allows individuals and businesses to retain more of their hard-earned income, reinvest in growth, or save for future endeavors.

While preparing for the current tax year, it is a good idea to review your previous year’s tax return and make note of any changes that have occurred since the last time that you filed. i.e. did you move, retire, change jobs, get married/divorced, or did your tax bracket change? Highlight any of those changes and find any paperwork associated with them.

Each time you file you are eligible for standard deductions and certain tax credits. If your tax bracket has changed, so may have some of your credits and deductions.

Remember that tax deductions help to reduce your taxable income, which means you will have a lower tax bill. You do not want to miss out on any that are available to you. Check your for eligibility for retirement contributions, educational expenses, medical bills, property taxes, mortgage interest, charitable donations, etc. Make sure you have the needed paperwork to prove you qualify for each one; this will protect you in the event of getting audited.

You might need to consider maximizing contributions to retirement accounts such as IRAs or 401(k)s, which can lower taxable income and provide long-term savings benefits. Similarly, businesses may accelerate deductible expenses or defer income to reduce taxable income for the current year.

Timing is also crucial in end-of-year tax planning. By strategically timing income and expenses, you or your business can smooth out their tax liabilities over multiple years, thereby optimizing their overall tax burden. This may involve deferring income into the following year or accelerating deductible expenses into the current year to maximize tax savings.

Don’t wait until the end of the year, or worse April 15th, to figure out what you can or could have qualified for. It’s like the old saying, “if you snooze, you lose.” Once we cross December 31, there’s no going back to claim things you might have been able to claim. When you plan ahead and keep your paperwork organized throughout the year, it will help you better manage your tax burden. If you stay on top of it, you will be able and ready to take advantage of all the available tax credits and deductions.

If you have felt frustrated with the exorbitant cost of groceries, you’re not alone. People all over the country are getting fed up and frustrated with the ongoing rise in food prices. Inflation may have slowed its pace, but that doesn’t mean consumers aren’t still feeling the sting of sky-high food prices. According to the Bureau of Labor Statistics, The Consumer Price Index for All Urban Consumers (CPI-U) increased 3.0% over the last 12 months to an index level of 314.175 (1982-84=100).

Overall, food prices have risen 26% since the beginning of 2020. Since 2019, according to Bloomberg, the average cost of a fast-food meal has surged 47%. The Labor Department reported back in May that dining out will cost you almost 30% more than back in 2019. As of May, the cost of eggs had been on the rise with triple-digit year-over-year increases throughout 2022 and 2023. Lately, U.S. consumers spend more than 11% of their disposable income on food. This is higher than it’s been in thirty years.

Back in May it looked as if food prices might be on the decline, but after finally dipping, grocery prices rose by 0.2% from May to June, igniting frustration in consumers. The latest CPI report shows food prices are up 0.24% from June 2024 and 2.23% higher than they were 12 months ago. When compared to overall prices in 2023 there was a 5.7% increase.

Historically, food price spikes have been linked to social unrest and political instability, especially in the more economically vulnerable regions. While we’re not seeing people taking to the streets (at least not yet) people are taking to their social media platforms. Social media has been splattered with shocked consumers comparing their grocery bill from 4 years ago to today’s outrageous prices. Since February of 2020 consumer prices have increased over 20%. That’s quite a bit above the historic average for a four-year period. According to Yahoo finance, a basket of groceries that cost $100 in November 2020 would not cost $125.80, an increase of nearly $26 dollars for the exact same food items.

The rising cost isn’t the only sting. Adding salt to the wound is what’s now called “shrink-flation.” This is where companies charge the same price (or more) for a smaller amount of product. So that basket of food that increased $26 dollars may have the same products, but many of them are smaller than they were back in 2020, increasing the gouge consumers are feeling.

While we have seen some individual food items like some fruits and vegetables come down, the overall cost of groceries hasn’t really decreased, at least not enough to make a difference in people’s budgets. We are seeing a glimmer of light, however, as wages are slowly catching up and inflation begins to ebb. (As reported by the BLS, From June 2023 to June 2024, wages have increased 5.1%).

So, what can you do? One of the best ways to combat food inflation is the old fashion practice of growing your own garden. You could also find reliable local sources. Visiting your community farmer’s market is a great way to invest in farm fresh produce, preserves, salsa, soaps, lotions, and other products. Not only do local farms provide higher quality and better tasting foods they usually offer products that are less likely to contain harmful chemicals. Supporting your local farmers and makers is also another great way to support your local economy.

Photo 1 by: Stevepb

Photo 2 by: Bruno Kelzer

In order to create a secure retirement plan, a little flexibility is needed. Often people think a retirement plan needs to be strict and rigid, which they can be, however, developing a flexible plan allows you to live comfortably and securely without the unnecessary     restrictions.

Using annuities can be a great way to create a flexible retirement plan. Using careful consideration of your financial goals, risk tolerance, and your personal retirement timeline, you can develop a retirement plan that meets your needs and gives you the freedom to enjoy your post-working years.

An annuity is a financial product offered by insurance companies that provides regular payments over a specific period of time.

The first step is to assess your retirement needs and goals. This means estimating your retirement expenses and   determining your expected retirement age and the length of time you’ll need income. You’ll also need to evaluate how much risk you’re willing to take. (This can help determine which type of annuity will work best for you).

Annuities offer flexibility through their different options. There are Immediate or Deferred annuities, Fixed or   Variable annuities, and Indexed annuities. Each provides unique options allowing you to choose something that aligns with your retirement goals and risk tolerance.

Annuities also offer additional features and riders that allow you to support the flexible and secure retirement you’re planning for. They offer options like Guaranteed Minimum Income Benefit which provides a minimum income amount regardless of market performance, Long-Term Care  Riders which allow you to use annuit funds to cover long-term care expenses if needed, and Death Benefit Riders which guarantees that your beneficiary receives a certain minimum amount if you pass away before receiving all annuity payments.

An annuity can be part of a diversified retirement strategy that includes other investments like stocks, bonds, and savings accounts. This diversity helps you manage your risk and optimize returns over time giving you better flexibility and security.

Remember, flexibility does not mean unstable. Instead, it can provide more stability, giving you options. Using  multiple annuities in succession can give you this desired workability along with a reliable income.

A new epidemic is spreading across our country, fueled by inflation, credit cards, and “buy now pay later” options for almost all online purchases. This seemingly  invisible epidemic is spreading at an alarming rate. Have you guessed it? Consumer debt.

Our country is racked with debt. So far, in 2024, the average personal debt increased from $21,800 to $22,713. About 13% of that comes from auto loans, but over 28% comes from credit card debt. Only about 23% of American’s are debt free, and about 65% of American’s say they are living paycheck to paycheck, an increase from last year which was about 58% of Americans. It’s becoming more important than ever to pay off debt and stay out of debt.

When tackling your debt you need to have a plan. There are many strategies for paying down debt; one of the more popular methods is the avalanche method. With this strategy, you focus on paying off the debt with the highest interest rate first, while making minimum payments on all other debts. Unlike the snowball method, which focuses on paying off the smallest debt first and working your way up through your debt with increased payments, the avalanche method aims to minimize the overall interest you pay overtime, resulting in significant savings over the long term while simultaneously paying down your debts. Like the snowball method, once you pay off a debt, that payment is then applied to the next debt in line.

For an example: if you have three debts- a credit card balance with a 15% interest rate, an auto loan with a 6% interest rate, and a personal loan with a 4% interest rate, you would prioritize the credit card debt first and aggressively pay it down first. Once paid off, you would move on to the auto loan, then the personal loan, following the order of the interest rates.

A downside with the avalanche method is it can take more time to see results, especially if your highest interest rate debt is substantial. This can be  discouraging. If you are the type of person that needs to see immediate results to stay motivated, it may be more advantageous to use the snowball method or some other method of paying down debt.

The avalanche method provides a way to organize and prioritize debts while saving you money in the long run. It can empower individuals to take control of their finances. However you choose to manage and eliminate your debt, the critical thing is to start and do. Take the time to go over your budget, list all your debts, and decide what method will work best for you and your situation. Overcoming debt will help your own personal economy flourish, which will then help   bolster your own community, helping bit by bit to overcome the debt epidemic. 

People always ask me where the interest rates are  going. If I knew that, I’d be living on an ivory tower some place making millions. That fact is companies and experts can try and predict, or forecast, where interest rates will go, but there is no way to tell for sure. There are many factors that determine what the interest rate will be including things like Central Bank policy, inflation expectations, national economic conditions, global economic conditions, as well as many other things.

Interest rates are essentially the cost of borrowing money or the rate of  return on investments for lending  money. When you take out a loan you typically pay back more than what you borrowed. That additional amount is the interest. Interest rates are expressed as a percentage of the total amount of borrowed money. These could be fixed rates (meaning they stay the same over the life of the loan) or variable rates (meaning the rate changes based on market conditions). Central banks, like the Federal Reserve, set benchmark interest rates, which influences the rates at which banks lend to each other. Changes in benchmark rates ripple through the economy and affect borrowing and  lending rates for consumers and businesses.

On May 1, 2024, the Federal Reserve made the decision to keep its benchmark rate unchanged. The federal funds rate is the interest rate that banks lend or borrow funds from each other overnight to meet reserve requirements or manage their short-term liquidity needs. When the Fed lowers interest rates, it means that it reduces the target range for the federal funds rate. This latest decision by the Fed is the sixth consecutive in which they have kept its policy rate steady between 5.25% and 5.5%. Rates have not moved since the start of 2024 after eleven rate hikes between 2022 and 2023.

Interest rates can act like a barometer, giving us an idea of how the economy is performing. In an effort to stabilize the economy, the Federal government will adjust the prime interest rate. If the economy is performing well, interest rates will typically be higher, but when there is an economic slowdown, interest rates will come down to stimulate consumer spending and economic growth.

It’s important to understand how interest rates affect your personal financial   economy as well as your community. Interest rates play a crucial role in the financial landscape of our nation and influence everything from the cost of borrowing money to the return on your investments. Whether it’s interest you pay on an auto loan or home mortgage, or interest you earn on your investments, you should always be aware of the interest rates that affect you. Interest rates play a critical role in our lives and are something we should always take an interest in.

2024 has undoubtedly been a newsworthy year, and we’re only one quarter through! Between the shouts of wars and cries for cease fire, attacks on shipping vessels, thundering earthquakes, the crash and splash of a massive bridge collapsing, the excitement of a solar eclipse, not to mention all the political noise of an election year it can be hard to focus on what’s going on in our country. Through it all, a steady pulse can be felt, the heartbeat of America- Small Businesses. Much like our own human hearts, most people don’t think about the steady thrum of these individual businesses, yet they work on, keeping the body of our economy alive.

According to SBA Office of Advocacy, small businesses have accounted for over 40% of our GDP over the last few decades. They contribute significantly to our local economies, circulating revenue and supporting other local businesses, which is vital to keeping our economy healthy. Small businesses help to stabilize our economy. These enterprises provide employment opportunities within our communities and bring creativity, and more competition to the marketplace. New and innovative ideas often come from small businesses, helping to drive our economy forward. Small businesses help to knit our communities together.

The U.S. Chamber of Commerce reports that there were 12.9 million jobs created by small businesses between 1996 and 2021, an average of 516,000 a year. After the pandemic we saw a surge, 5.5 million jobs created from small businesses from 2020 to now, an average of 1,571,000 jobs a year.

Small businesses face plenty of challenges. They have limited access to capital compared to big corporations, increased pressure from other competitors, regulatory hurdles and red tape to deal with, not to mention the volatility of our current economic situation. Recession and inflation have been a huge obstacle for small businesses. Over 50% of small business owners say that inflation is their top challenge (U.S. Chamber of Commerce 2023).

Without small businesses pumping life into our economy the American people and our economy would experience a tremendous strain, on both a national and local scale. The consequences would reach far beyond the loss of millions of jobs. Small businesses contribute  substantially to our economy, without their contribution economic growth and innovation would slow. We would see reduced consumer spending and investing, which could lead to a recession. We would see supply chain disruptions and kinks in our supply chain which affect  other parts of our economy. We would lose the uniqueness and diversity we gain from having so many different businesses, which would result in a                  concentration of economic power in the hands of larger corporations, reducing competition. Without small businesses the government would lose a substantial amount in tax revenues, which would put pressure on government budgets, potentially leading to cuts in  public services and higher taxes on personal wages. 

It's crucial, more now than ever, to support small business and create a more stable and healthy economy. The importance of small businesses cannot be overstated. When we support small businesses, we ensure that steady life giving pulse will endure, giving life to our country for decades to come.

Photo 2 by: Tim Mossholder

We’re seeing a shift in the popularity of collar colors. For years parents and high school councilors have  encouraged young people to pursue traditional college educations and settle into a high paying white-collar job with a white picket fence to go with it. The prioritization of college degrees over trade careers has created an increasing shortage of skilled blue-collar workers in the US. There are over 9 million unfilled blue-collar jobs. So what do we do when the backbone of our economy starts to give out?

There is a demand for skilled trades people, which is outpacing the supply of people qualified to fill those roles. This shortage has increased the demand, which in turn has increased what businesses are willing to pay those workers. Between 2010 and 2012 the wage increase for blue color jobs went up only .6% compared to the increase of 4.5% for white collar jobs. However, between 2020 and 2022 those same blue color jobs increased pay by 14%, where the white-collar jobs only saw an increase of 7.5%. Wage gains for some blue-collar jobs have started to outpace gains for white collar jobs over the last three years. The combined shortage of trade workers and higher pay is driving up costs, creating a domino effect in our economy.

The starting pay for most white-collar jobs is still higher than entry level blue-collar jobs, but under the latest economic stress we’re seeing more and more layoffs in the white-collar world. Companies are turning to AI, replacing many employees as businesses try to cut back and ease the pinching pressure of our struggling economy. The result: many white-collar jobs are not as stable as they used to be.

Eight of the ten highest earning industries for small business ownership come from blue-collar industries including: construction, roofing, flooring, painting, heating & air conditioning, carpentry, plumbing, and electrical- all of which can earn more than $5,000 a month. This challenges the idea that you need to have a four-year degree in order to stand amongst the top earners of the country.

Blue-collar workers have always been the backbone of the United States and play a vital role in the American economy. In order to fuel a healthy economy, we need to find a balance between the blue-collar and the white-collar, this may require a shift in perspective as we help the young and upcoming workforce realize that blue-collar jobs are worth investing their time in. This country was built on the hard work of people willing to get their hands dirty and put in the extra effort.

Photo by: Jason Richard