Money Management

Amid a flood of complaints, the DOT could change the rules to improve your flying experience. 

Airline travel has been less fun this year than ever. The Department of Transportation has received thousands of complaints over the course of 2022 with many more passengers lamenting travel problems compared with in the recent past. Airlines have also canceled thousands of flights, often citing bad weather or staffing issues as the cause of the cancellations.

In response to a flood of complaints, the DOT has begun taking some actions to try to make flying a better experience for customers. But, will this actually improve air travel for consumers in 2023?

Here’s what the DOT has proposed to help improve air travel

The Department of Transportation has already moved forward with making some changes designed to help consumers facing travel problems. An Airline Customer Service dashboard was launched that shows exactly what each airline will do for customers when flights are canceled or other problems arise such as delays that are within the control of the airlines.

The DOT is also considering doing more. In fact, the agency asked for comments on a ​​proposed rule on airline ticket refunds and consumer protections. The rule would better define when airlines must provide refunds including for canceled flights and flight delays lasting for more than three hours. It also would require airlines to refund the original payment method.

Will the DOT’s efforts work?

The DOT’s proposal is just a proposal at this stage and it’s not yet clear whether it will be enacted. Some airlines have expressed support for clarifying the rules, though, and with both industry leaders and the public believing some change is necessary, it is possible the proposal will become a new federal rule.

If the rules are stricter regarding when airlines must provide refunds, this could potentially encourage more companies to manage their schedules more effectively so controllable delays and cancellations happen less often. Consumers can also more easily compare which airlines offer better help and support in case problems crop up thanks to the DOT’s new tools.

Of course, airlines also need to have the staff and equipment to prevent the types of delays and cancellations that have consumers so frustrated. The good news is, many major airlines expect to be operating back at full capacity in 2023 after years of disruption due to COVID-19 and supply chain issues.

If there are more planes in service and the airline can find staff members, then the epidemic of delays and canceled flights that caused so much consumer distress in 2022 could finally end.

But, before you break out your credit cards to start buying airline airline tickets, keep in mind that there are no guarantees these rules will make a noticeable impact in prompting airlines to change their behavior — or that airlines will be able to staff all the additional aircrafts they hope to put back into service.

So, while you have reason to hope things will get better over the course of this year, you may want to hold off on booking a bunch of trips until you see how things play out.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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It’s not the most comforting news. 

For months now, economists have been sounding warnings about a potential recession. But with such warnings comes the caveat that the U.S. economy is currently in a solid place, at least from an unemployment standpoint. In fact, the national jobless rate is now at almost its lowest level in 20 years.

That doesn’t mean workers don’t have to concern themselves with layoffs, though. In fact, a major tech company just announced that it will be reducing its headcount. And that should at least serve as a wakeup call for workers across the board.

Salesforce is making cuts

Many tech companies got hammered in 2022 after seeing a nice lift in 2020 and 2021. And Salesforce fell into that same trap. As a result, Salesforce is making plans to cut about 10% of its workforce.

As of January 2022, Salesforce had 73,541 global employees. So in light of this news, a lot of people will soon, unfortunately, be out of a job.

Of course, Salesforce isn’t the only big player in the tech space to announce layoffs recently. Over the past few months, Amazon and Meta have made similar announcements. In fact, Amazon recently announced it plans to cut over 18,000 jobs, more than the 10,000 jobs it initially said it planned to cut.

Should workers be worried about widespread layoffs?

Many tech companies invested in extra staff during the early stages of the COVID-19 pandemic, when consumers changed the way they lived and became more reliant on Big Tech. Now that consumers are shifting back to their pre-pandemic ways, tech firms aren’t enjoying the same level of revenue. So it makes sense that some might seek to lower their headcount.

This doesn’t necessarily mean that companies across the board will be implementing layoffs this year, though. And whether that happens will likely hinge heavily on the turn the economy takes.

If consumer spending holds steady and we’re able to avoid a recession, job loss numbers might remain low, as they’ve been in recent months. But if general economic conditions decline, there could be a notable uptick in layoffs.

If that’s something you’re worried about, one of the best things you can do right now is boost your emergency fund. At a minimum, you should aim to have enough money in your savings account to pay for three full months of essential bills. But if you’re able to pad your savings even more, you’ll put yourself in a better position to get through a period of unemployment.

Of course, boosting your job skills wouldn’t be a bad thing to do at this time, either. But being highly skilled won’t guarantee that you won’t end up on the chopping block.

Unfortunately, hard work and talent don’t always translate into job security the way we’d hope. So if you want to protect yourself from a potential increase in unemployment, give your savings a nice boost while you still have a steady paycheck coming in.

Another move to consider these days? Pick up a side hustle. The extra money you earn could help you grow your savings nicely. And that way, if you lose your job, you might have a back-up source of income to rely on while you look for full-time work.

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Are you somehow blocking your ability to become rich? 

Many people see the turn of a new year as a time to make resolutions, whether it’s about money or other aspects of their lives. Resolutions are one thing, but popular podcast host and author Suze Orman recently tweeted that if you don’t believe you’re worthy of wealth, you won’t achieve it.

“If you don’t feel worthy of financial independence, then the money you are meant to have will be blocked from coming to you because your thoughts, words, and actions will be communicating to the world that you are not deserving of it,” she posted. “Don’t forget that you are worthy of wealth.”

What does it mean to be worthy — or not worthy — of wealth?

Self worth impacts many areas of our lives, from our relationships to our work and financial situations. For example, if you don’t feel worthy, you may not apply for a promotion you’re more than qualified to get. You might have trouble asking for a pay raise, even if you deserve one.

More widely, there are a few ways people who don’t believe in themselves may spend cash that could otherwise be used to strengthen their finances. Perhaps they agree to loan money to a friend, even if they’re not comfortable with the situation. They might always be the one who picks up the tab or buys rounds of drinks. Or the one to buy the latest fashion or electronics to keep up with their friends.

On the other hand, feeling worthy of wealth can help you to invest for your future. Sometimes building wealth can involve difficult decisions — and those can take confidence. For example, putting aside money for an emergency fund or your retirement might mean saying no to various other pulls on your wallet. If you need to pay down debt, it will be a lot easier if you believe you can do it.

Is she right?

What’s troubling about Suze Orman’s message is that it implies you’re somehow blocking money from coming your way, and the answer is to change your mindset. It sounds good on social media, but the reality is that there are plenty of people with low self worth who’ve been able to build solid financial situations for themselves — as well as over-confident people who struggle financially.

Emotions do play a huge role in how we manage our money, but developing confidence and self worth is neither easy nor will it solve all your problems. There’s no one-size-fits-all way to manage your finances and there are many obstacles that can stop people from creating financial security.

Sure, feeling worthy feeds into it. It’s hard to buy stocks or build an emergency fund if you don’t think you deserve a solid financial future. But a more pertinent question is your ability to earn and save. This is where the gap between your income and spending comes in. The bigger that gap, the more money you have to build wealth and financial independence.

Start by looking at your income versus your spending and try to understand exactly where your money is going. Look for areas where you might be able to cut back, such as subscription services and other non-essential spending. Perhaps most of your paycheck goes on essentials like food, utilities, and rent. If that’s the case, what steps can you take to increase your income? Consider why you spend money — if it’s because you don’t feel worthy, how can you begin to change those triggers?

Ultimately, self worth isn’t going to help much if you’re earning minimum wage and don’t have enough to cover the essentials. If you are living paycheck to paycheck and have no reserves in your savings account, it’s hard to believe that you can change your situation. You can. Other people have broken out of that cycle. As with many things in life, start by making a plan. This might involve accessing free career counseling or additional training. It might mean making short-term sacrifices so you can build up your reserves.

Bottom line

If you struggle to feel worthy, it can impact all areas of your life, including your finances. One study a few years ago found that 85% of Americans struggle with low self worth, so you’re not alone. The good news? You don’t have to magically build your self-esteem to be able to improve your finances.

Instead, try to focus on the practical steps you can take — such as making a budget and planning for the future. Set yourself small, achievable goals, and celebrate your achievements. You never know, you may even find your financial confidence improves as you make confidence on that journey.

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A home equity loan could end up being a much better option. 

Ever since mid-2020, many would-be buyers have been struggling to purchase homes. And a big reason has to do with elevated prices.

But while higher home values aren’t a good thing when you’re trying to purchase a home, they’re a great thing when you own a home and decide you want to borrow against it. In fact, you have a few different options when it comes to borrowing against your home equity. You could opt for a home equity loan, or take out a home equity line of credit (HELOC). But in 2023, you may want to specifically favor the former. Here’s why.

1. You’ll get a fixed interest rate

As is the case with a personal loan, a home equity loan gives you a fixed interest rate on the sum of money you’re borrowing. A HELOC, on the other hand, generally has variable interest.

That’s a big deal right now, because interest rates have been soaring on the heels of Federal Reserve rate hikes. And also, we don’t know if the Fed is done raising interest rates. There’s a chance it will continue to employ that practice in 2023 until the rate of inflation comes down substantially. So at a time like this, you’re really better off locking in a fixed-rate loan, as opposed to taking the chance of your interest rate climbing.

2. You’ll have predictable monthly payments

The fact that home equity loans come with fixed interest rates means that you might have a much easier time working your loan payments into your budget. That’s because they won’t change over time like HELOC payments could. And at a time when inflation is still soaring and forcing a lot of people to pinch pennies, that consistency is essential.

3. You can avoid the temptation to overborrow

When you get approved for a HELOC, you gain access to a line of credit you can tap during a predetermined period of time — often, five to 10 years. But that can open the door to temptation.

Let’s say you’re doing a home renovation project and take out a $20,000 HELOC to finance it. Your costs might only total $16,000, so in that case, you wouldn’t need to borrow $4,000 of that $20,000. But you might then be tempted to tap that remaining $4,000 to do something like take a vacation since you have the option.

With a home equity loan, you’re committing to a single borrowing amount from the start. And so you may be more likely to borrow more judiciously in that scenario, thereby lowering the total amount of debt you take on.

Both home equity loans and HELOCs are a viable borrowing option for a lot of people these days due to higher home values. But opting for a home equity loan could end up being the much better financial choice at a time when borrowing rates are high and money is tight for a lot of people due to our challenging economic climate.

Our picks for the best personal loans

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Image source: Getty Images
What happenedAmazon CEO Andy Jassy, told staff today that the company would lay off over 18,000 workers worldwide. The figure is significantly more than the 10,000 layoffs it announced in November. Jassy blamed economic uncertainty and the company’s rapid pandemic expansion for the cuts.The majority of the lob losses will be in Amazon Stores and its People, Experience, and Technology organizations. As there are around 1.5 million Amazon employees, the cuts represent about 6% of the tech giant’s workforce.So whatAmazon’s decision is in line with moves in other tech companies to reduce their workforces. Yesterday, Salesforce, a leader in business software solutions, announced it would let 10% of its employees go. Meta, Snap, Doordash, and Twitter have also slashed jobs in recent months.January is historically a bad month for layoffs and some fear is that what’s happening in tech could spread to other parts of the economy. Right now, the labor market is relatively strong — in spite of high inflation, aggressive interest rate hikes, and fears of a potential recession. The Federal Reserve predicts that unemployment could increase to 4.6% by the end of next year, up from the current 3.7%. To put that figure in context, that could mean around 1.5 million additional people without work in the U.S.Now whatIf you’re worried about losing your job, there are steps you can take today to prepare. Start by taking a look at your finances and working out how much you spend each month. Do you have enough cash stashed away in an emergency fund to see you through three to six months without work? If not, January might be a time to aggressively boost what’s in your savings account. If you carry high interest debt, look at ways to pay it down as it can make life more difficult when you don’t have money coming in.Work-wise, take some time to think about what you want. If you’re happy in your current place of employment, perhaps there are ways you can step things up by taking on extra responsibility or contributing in another area. If you know you want to change jobs or move into a new industry, what skills can you transfer? What qualifications or extra training might you need? Who might help you along the way?It’s also a good idea to think about things like health insurance and your employer retirement plan, if you have one. If you have health insurance through work, you’ll have a couple of options. There’s a law called COBRA that lets you pay and keep your existing coverage for up to 18 months. But this may not be the cheapest route. You don’t have to make any decisions now, but it’s good to understand where you stand.Similarly, if you have a 401(k) with your employer, think about whether you’ll roll it into an IRA, move it to a new employer, or leave it where it is. If you’re thinking about cashing it out, bear in mind that this can have tax implications and impact your ability to retire when the time comes. As with your insurance, it’s more about beginning the thinking process than finding a definitive answer. The more reflection you do while things are relatively stable, the easier it will be to handle a change in your circumstances.Job losses can be difficult to handle at an emotional and financial level. But if you have some cash in the bank and have started to plan out how you might manage, it will ease some of the pressure if you do get let go.Alert: highest cash back card we’ve seen now has 0% intro APR until 2024If you’re using the wrong credit or debit card, it could be costing you serious money. Our expert loves this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee. In fact, this card is so good that our expert even uses it personally. Click here to read our full review for free and apply in just 2 minutes. Read our free reviewWe’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Emma Newbery has positions in Amazon.com. The Motley Fool has positions in and recommends Amazon.com. The Motley Fool has a disclosure policy. 

What happened

Amazon CEO Andy Jassy, told staff today that the company would lay off over 18,000 workers worldwide. The figure is significantly more than the 10,000 layoffs it announced in November. Jassy blamed economic uncertainty and the company’s rapid pandemic expansion for the cuts.

The majority of the lob losses will be in Amazon Stores and its People, Experience, and Technology organizations. As there are around 1.5 million Amazon employees, the cuts represent about 6% of the tech giant’s workforce.

So what

Amazon’s decision is in line with moves in other tech companies to reduce their workforces. Yesterday, Salesforce, a leader in business software solutions, announced it would let 10% of its employees go. Meta, Snap, Doordash, and Twitter have also slashed jobs in recent months.

January is historically a bad month for layoffs and some fear is that what’s happening in tech could spread to other parts of the economy. Right now, the labor market is relatively strong — in spite of high inflation, aggressive interest rate hikes, and fears of a potential recession. The Federal Reserve predicts that unemployment could increase to 4.6% by the end of next year, up from the current 3.7%. To put that figure in context, that could mean around 1.5 million additional people without work in the U.S.

Now what

If you’re worried about losing your job, there are steps you can take today to prepare. Start by taking a look at your finances and working out how much you spend each month. Do you have enough cash stashed away in an emergency fund to see you through three to six months without work? If not, January might be a time to aggressively boost what’s in your savings account. If you carry high interest debt, look at ways to pay it down as it can make life more difficult when you don’t have money coming in.

Work-wise, take some time to think about what you want. If you’re happy in your current place of employment, perhaps there are ways you can step things up by taking on extra responsibility or contributing in another area. If you know you want to change jobs or move into a new industry, what skills can you transfer? What qualifications or extra training might you need? Who might help you along the way?

It’s also a good idea to think about things like health insurance and your employer retirement plan, if you have one. If you have health insurance through work, you’ll have a couple of options. There’s a law called COBRA that lets you pay and keep your existing coverage for up to 18 months. But this may not be the cheapest route. You don’t have to make any decisions now, but it’s good to understand where you stand.

Similarly, if you have a 401(k) with your employer, think about whether you’ll roll it into an IRA, move it to a new employer, or leave it where it is. If you’re thinking about cashing it out, bear in mind that this can have tax implications and impact your ability to retire when the time comes. As with your insurance, it’s more about beginning the thinking process than finding a definitive answer. The more reflection you do while things are relatively stable, the easier it will be to handle a change in your circumstances.

Job losses can be difficult to handle at an emotional and financial level. But if you have some cash in the bank and have started to plan out how you might manage, it will ease some of the pressure if you do get let go.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2024

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In fact, this card is so good that our expert even uses it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Emma Newbery has positions in Amazon.com. The Motley Fool has positions in and recommends Amazon.com. The Motley Fool has a disclosure policy.

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