Money Management

[[{“value”:”Image source: Getty Images
I first read Robert Kiyosaki’s Rich Dad, Poor Dad when I was in my twenties and wanted to know more about how to handle money. I came back to it with a lot more financial knowledge in my thirties and forties. His ideas were a lot more worrisome on the second and third reading.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. Don’t get me wrong, the book contains some kernels of good advice. Kiyosaki advocates financially educating yourself and investing in income-producing assets. But he’s also overly dismissive of people who work 9-to-5 jobs, gung-ho about taking risks, and champions some questionable tax practices.Here are three major reasons not to listen to Robert Kiyosaki.1. He encourages people to take big risksNot only does Rich Dad, Poor Dad push several risky ways to make money, but it also glorifies risk-taking in general. For example, Kiyosaki extols the virtues of high-risk assets like penny stocks. To be clear: Many, many retail investors have lost money through buying penny stocks. They are highly speculative, prone to fraud, and unproven.Now, in fairness, Kiyosaki also stresses the importance of educating yourself so you can evaluate these risky investments for yourself. But what makes my blood boil is that he casts shade on the very idea of playing it safe. Many of today’s millionaires got there by consistently living below their means and putting a portion of their paycheck into their brokerage accounts.Plus, Kiyosaki only presents the extremes. On the one hand, his high-risk penny stocks, tax liens, and house flipping. On the other, what he calls “sanitized” secure investments. There’s a whole smorgasbord of investments in the middle that will generate solid returns and won’t give your financial advisor an aneurysm.Instead of listening to KiyosakiDon’t take big risks if you don’t have a lot of cash to spare — you could wind up with nothing. Plus, there are many different ways to build wealth to suit all levels of investor. You don’t need to be a financial expert to get started.For example, historically the S&P 500 has generated average annual returns of 8%. If you put $750 a month into an ETF or index fund that tracks the S&P 500, those gains could make you a millionaire in 30 years.2. His tax advice is questionableOne of the messages that’s repeated in Rich Dad, Poor Dad is this: The rich barely pay any taxes. And if you want to get rich, neither should you. He’s a big fan of using corporations to avoid tax, saying, “It’s one of the biggest legal tax loopholes that the rich use.”He says you can bill various expenses to a corporation — including restaurant meals, health club memberships, and travel. It’s true, there are ways to deduct business travel and dining costs. But don’t think you can book a luxury vacation and claim it as a business expense.I’m not going to get into the ethics or politics of tax avoidance, but tax evasion is illegal. And Kiyosaki’s advice that we should set up corporations in order to avoid paying tax is at best oversimplified and at worst dodgy.Instead of listening to KiyosakiThere are many tax-advantaged ways to invest that don’t involve funneling your money through a corporation, particularly if you’re saving retirement. For example, if your company has a 401(k) plan, that can be a good place to start, especially if the company will match your contributions.Check out our best brokerages for IRAs and think about which individual retirement account (IRA) is best for your situation. Traditional IRAs reduce your tax bill today, while Roth IRAs give you tax-free withdrawals once you retire.Some brokerages, such as Robinhood, will even match a percentage of your IRA contributions. Customers of its premium Robinhood Gold service can benefit from a 3% match, while other customers get a 1% match. Click here to learn more about how Robinhood can help you save for retirement.3. He has a twisted idea of paying yourself firstMany financial advisers talk about paying yourself first. It basically means you put money into your savings or investment accounts before you spend it on other things. It can be a good way to prioritize your financial foundations, especially if you often find you don’t have cash to invest at the end of the month.Kiyosaki’s version is more extreme. The rich dad character in his book bought assets (aka paid himself first) ahead of paying essential bills and even his taxes. His logic? Owing money to creditors forces him to find other forms of income in a way that owing money to himself won’t.Instead of listening to KiyosakiPay yourself first, but not at the expense of essential bills. Just one missed payment can tank your credit score and stay on your credit report for years. And if you don’t pay your tax bill, the IRS can charge you interest and a penalty.Look at your budget and work out how much you can realistically put aside each month. If you want to be sure you make that payment, set up an automatic transfer from your checking account.Key takeawayIf you’re a Rich Dad, Poor Dad fan, you may think I’m what he’d call a Chicken Little crying that the sky is going to fall in. The thing is, I’ve hit financial rock bottom through taking too many risks. It’s not fun. Now, I work as a freelancer — and it isn’t risk-taking that’s enabled me to live the life I want. It’s the solid foundation I built by playing it safe.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. 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.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.Emma Newbery 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.”}]] [[{“value”:”

I first read Robert Kiyosaki’s Rich Dad, Poor Dad when I was in my twenties and wanted to know more about how to handle money. I came back to it with a lot more financial knowledge in my thirties and forties. His ideas were a lot more worrisome on the second and third reading.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

Don’t get me wrong, the book contains some kernels of good advice. Kiyosaki advocates financially educating yourself and investing in income-producing assets. But he’s also overly dismissive of people who work 9-to-5 jobs, gung-ho about taking risks, and champions some questionable tax practices.

Here are three major reasons not to listen to Robert Kiyosaki.

1. He encourages people to take big risks

Not only does Rich Dad, Poor Dad push several risky ways to make money, but it also glorifies risk-taking in general. For example, Kiyosaki extols the virtues of high-risk assets like penny stocks. To be clear: Many, many retail investors have lost money through buying penny stocks. They are highly speculative, prone to fraud, and unproven.

Now, in fairness, Kiyosaki also stresses the importance of educating yourself so you can evaluate these risky investments for yourself. But what makes my blood boil is that he casts shade on the very idea of playing it safe. Many of today’s millionaires got there by consistently living below their means and putting a portion of their paycheck into their brokerage accounts.

Plus, Kiyosaki only presents the extremes. On the one hand, his high-risk penny stocks, tax liens, and house flipping. On the other, what he calls “sanitized” secure investments. There’s a whole smorgasbord of investments in the middle that will generate solid returns and won’t give your financial advisor an aneurysm.

Instead of listening to Kiyosaki

Don’t take big risks if you don’t have a lot of cash to spare — you could wind up with nothing. Plus, there are many different ways to build wealth to suit all levels of investor. You don’t need to be a financial expert to get started.

For example, historically the S&P 500 has generated average annual returns of 8%. If you put $750 a month into an ETF or index fund that tracks the S&P 500, those gains could make you a millionaire in 30 years.

2. His tax advice is questionable

One of the messages that’s repeated in Rich Dad, Poor Dad is this: The rich barely pay any taxes. And if you want to get rich, neither should you. He’s a big fan of using corporations to avoid tax, saying, “It’s one of the biggest legal tax loopholes that the rich use.”

He says you can bill various expenses to a corporation — including restaurant meals, health club memberships, and travel. It’s true, there are ways to deduct business travel and dining costs. But don’t think you can book a luxury vacation and claim it as a business expense.

I’m not going to get into the ethics or politics of tax avoidance, but tax evasion is illegal. And Kiyosaki’s advice that we should set up corporations in order to avoid paying tax is at best oversimplified and at worst dodgy.

Instead of listening to Kiyosaki

There are many tax-advantaged ways to invest that don’t involve funneling your money through a corporation, particularly if you’re saving retirement. For example, if your company has a 401(k) plan, that can be a good place to start, especially if the company will match your contributions.

Check out our best brokerages for IRAs and think about which individual retirement account (IRA) is best for your situation. Traditional IRAs reduce your tax bill today, while Roth IRAs give you tax-free withdrawals once you retire.

Some brokerages, such as Robinhood, will even match a percentage of your IRA contributions. Customers of its premium Robinhood Gold service can benefit from a 3% match, while other customers get a 1% match. Click here to learn more about how Robinhood can help you save for retirement.

3. He has a twisted idea of paying yourself first

Many financial advisers talk about paying yourself first. It basically means you put money into your savings or investment accounts before you spend it on other things. It can be a good way to prioritize your financial foundations, especially if you often find you don’t have cash to invest at the end of the month.

Kiyosaki’s version is more extreme. The rich dad character in his book bought assets (aka paid himself first) ahead of paying essential bills and even his taxes. His logic? Owing money to creditors forces him to find other forms of income in a way that owing money to himself won’t.

Instead of listening to Kiyosaki

Pay yourself first, but not at the expense of essential bills. Just one missed payment can tank your credit score and stay on your credit report for years. And if you don’t pay your tax bill, the IRS can charge you interest and a penalty.

Look at your budget and work out how much you can realistically put aside each month. If you want to be sure you make that payment, set up an automatic transfer from your checking account.

Key takeaway

If you’re a Rich Dad, Poor Dad fan, you may think I’m what he’d call a Chicken Little crying that the sky is going to fall in. The thing is, I’ve hit financial rock bottom through taking too many risks. It’s not fun. Now, I work as a freelancer — and it isn’t risk-taking that’s enabled me to live the life I want. It’s the solid foundation I built by playing it safe.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

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.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.Emma Newbery 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.

“}]] Read More 

[[{“value”:”Image source: Getty Images
At age 60, you continue to have hopes and dreams, and though you’ve lived six decades, a part of you still feels like a kid. That’s why it sometimes feels odd to plan for retirement. It’s hard to reconcile how young you feel inside with planning for your golden years. However, planning is essential.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. If you’re nervous about carrying a mortgage at 60 and wonder what it means for retirement, you’re in the right place. Here, we’ll discuss your options and help you determine if you’re doing better than you think.Conventional wisdom vs. realityAt one time, the conventional wisdom was that a person needed to pay off their home loan before they retired — and it made sense. After all, the lower a person’s bills, the further their retirement income could stretch.While plenty of retirees have paid off their mortgages, many have not been able to do so. According to the Joint Center for Housing Studies at Harvard University, 41% of homeowners over 65 were still paying a mortgage in 2022. What’s more, 31% of homeowners 80 and over continued to carry a mortgage.For some homeowners, having a mortgage is no big deal and fits neatly into their monthly budget. However, a recent study published by the Michigan Retirement and Disability Research Center at the University of Michigan found that the typical retiree still paying a mortgage is running short of money.Determining whether paying a mortgage will be “no big deal” when you retire can help you plan your next move.Are you 60 and concerned that you haven’t saved or invested enough? There is always time to add to your retirement income. These commission-free IRAs can help you get started.Your specific situationWhether or not you should be worried depends on the specifics of your situation. Asking yourself the following questions can help you sort it all out:How does my post-retirement budget look?Now is a good time to create a budget based on your expected sources of income, including Social Security, pensions, annuities, and retirement account withdrawals. Next, add up all your post-retirement expenses, including mortgage, utilities, groceries, transportation, healthcare, and any other bills you pay. Does it seem you’ll have enough to cover your monthly obligations, or is there a fairly wide gap that must be bridged?How’s my interest rate?If you’re currently paying a high interest rate, it’s time to decide whether you’ll try to pay off that final $200,000 or refinance the mortgage (more on refinancing in a moment).Can the remaining balance be paid off?Imagine that you borrowed $320,000 at 7% interest 15 years ago. You took out a 30-year mortgage, and your monthly principal and interest payment is $2,129. That leaves you with 15 more years of mortgage payments. If you pay an extra $1,000 monthly toward the principal, your mortgage will be paid off in 6.75 years, or shortly before your full retirement age.Do I even want to pay the balance off?There are a few circumstances under which you should focus on other financial issues before tackling your mortgage. For example, if you carry high-interest debt (like credit cards), your best move is to pay that off before doing anything else. If your investments regularly earn a higher interest rate than you’re paying on your mortgage, it may make sense to hold onto your mortgage and continue to invest.If you ask yourself these questions but aren’t happy with the answers, it’s time to pivot to a new plan.Reimagine your lifeIf you can already tell that your housing payment will strain your budget, imagine what your life would look like if you sold your current home and purchased something smaller. “Smaller” doesn’t mean less nice. It’s possible that you’d fall in love with a low-maintenance home, cool old loft, or smaller house in the country.Given how quickly home values have climbed, you’re probably sitting on a nice pile of equity. However, home values have risen pretty much across the board and you might find yourself paying more for a smaller home than you paid for your original home. If that’s the case, you have at least three options:1. Hope the housing market turns aroundWait for home prices to soften, and you’re in a better position to pay less for a smaller home. The goal is to decrease your monthly budget.2. Watch mortgage ratesKeep your eye on mortgage rates, and when they drop sufficiently low, refinance your home by taking out another 30-year mortgage. Let’s say your current principal and interest payment is $2,129, and rates fall to 4.5%. Refinancing your loan for another 30 years means your monthly principal and interest payment drops to $1,013, saving you $1,116 monthly.Refinancing a mortgage may sound intimidating, but it’s pretty straightforward. If you decide to go this route, check out some of our favorite mortgage lenders for refinancing.3. Look into a reverse mortgageA reverse mortgage is an agreement in which the lender pays you a specific amount of money each month rather than you paying the lender. You retain ownership of the home, but the money received from the lender must be repaid when you die, sell the house, or move out permanently. If you decide to look into a reverse mortgage, do so carefully. The reverse mortgage industry has mixed reviews due to lenders that charge sky-high fees and otherwise seek to separate homeowners from their equity.Bottom line: Whether owing money on a mortgage is a problem depends on how much you’ll bring in during your retirement years and how much you’ll pay out. Fortunately, at age 60, you still have enough wiggle room to make any needed changes.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. 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.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.”}]] [[{“value”:”

At age 60, you continue to have hopes and dreams, and though you’ve lived six decades, a part of you still feels like a kid. That’s why it sometimes feels odd to plan for retirement. It’s hard to reconcile how young you feel inside with planning for your golden years. However, planning is essential.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

If you’re nervous about carrying a mortgage at 60 and wonder what it means for retirement, you’re in the right place. Here, we’ll discuss your options and help you determine if you’re doing better than you think.

Conventional wisdom vs. reality

At one time, the conventional wisdom was that a person needed to pay off their home loan before they retired — and it made sense. After all, the lower a person’s bills, the further their retirement income could stretch.

While plenty of retirees have paid off their mortgages, many have not been able to do so. According to the Joint Center for Housing Studies at Harvard University, 41% of homeowners over 65 were still paying a mortgage in 2022. What’s more, 31% of homeowners 80 and over continued to carry a mortgage.

For some homeowners, having a mortgage is no big deal and fits neatly into their monthly budget. However, a recent study published by the Michigan Retirement and Disability Research Center at the University of Michigan found that the typical retiree still paying a mortgage is running short of money.

Determining whether paying a mortgage will be “no big deal” when you retire can help you plan your next move.

Are you 60 and concerned that you haven’t saved or invested enough? There is always time to add to your retirement income. These commission-free IRAs can help you get started.

Your specific situation

Whether or not you should be worried depends on the specifics of your situation. Asking yourself the following questions can help you sort it all out:

How does my post-retirement budget look?

Now is a good time to create a budget based on your expected sources of income, including Social Security, pensions, annuities, and retirement account withdrawals. Next, add up all your post-retirement expenses, including mortgage, utilities, groceries, transportation, healthcare, and any other bills you pay. Does it seem you’ll have enough to cover your monthly obligations, or is there a fairly wide gap that must be bridged?

How’s my interest rate?

If you’re currently paying a high interest rate, it’s time to decide whether you’ll try to pay off that final $200,000 or refinance the mortgage (more on refinancing in a moment).

Can the remaining balance be paid off?

Imagine that you borrowed $320,000 at 7% interest 15 years ago. You took out a 30-year mortgage, and your monthly principal and interest payment is $2,129. That leaves you with 15 more years of mortgage payments. If you pay an extra $1,000 monthly toward the principal, your mortgage will be paid off in 6.75 years, or shortly before your full retirement age.

Do I even want to pay the balance off?

There are a few circumstances under which you should focus on other financial issues before tackling your mortgage. For example, if you carry high-interest debt (like credit cards), your best move is to pay that off before doing anything else. If your investments regularly earn a higher interest rate than you’re paying on your mortgage, it may make sense to hold onto your mortgage and continue to invest.

If you ask yourself these questions but aren’t happy with the answers, it’s time to pivot to a new plan.

Reimagine your life

If you can already tell that your housing payment will strain your budget, imagine what your life would look like if you sold your current home and purchased something smaller. “Smaller” doesn’t mean less nice. It’s possible that you’d fall in love with a low-maintenance home, cool old loft, or smaller house in the country.

Given how quickly home values have climbed, you’re probably sitting on a nice pile of equity. However, home values have risen pretty much across the board and you might find yourself paying more for a smaller home than you paid for your original home. If that’s the case, you have at least three options:

1. Hope the housing market turns around

Wait for home prices to soften, and you’re in a better position to pay less for a smaller home. The goal is to decrease your monthly budget.

2. Watch mortgage rates

Keep your eye on mortgage rates, and when they drop sufficiently low, refinance your home by taking out another 30-year mortgage. Let’s say your current principal and interest payment is $2,129, and rates fall to 4.5%. Refinancing your loan for another 30 years means your monthly principal and interest payment drops to $1,013, saving you $1,116 monthly.

Refinancing a mortgage may sound intimidating, but it’s pretty straightforward. If you decide to go this route, check out some of our favorite mortgage lenders for refinancing.

3. Look into a reverse mortgage

A reverse mortgage is an agreement in which the lender pays you a specific amount of money each month rather than you paying the lender. You retain ownership of the home, but the money received from the lender must be repaid when you die, sell the house, or move out permanently. If you decide to look into a reverse mortgage, do so carefully. The reverse mortgage industry has mixed reviews due to lenders that charge sky-high fees and otherwise seek to separate homeowners from their equity.

Bottom line: Whether owing money on a mortgage is a problem depends on how much you’ll bring in during your retirement years and how much you’ll pay out. Fortunately, at age 60, you still have enough wiggle room to make any needed changes.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

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.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

“}]] Read More 

[[{“value”:”Image source: The Motley Fool/Upsplash
Inflation wreaked havoc on Americans’ finances for much of 2022 and 2023. But thankfully, things have been better this year, with annual inflation rising at a much slower pace.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. Since annual inflation had been steadily creeping downward toward the 2% mark, which is the Federal Reserve’s ideal inflation target, the central bank lowered its benchmark interest rate twice this year — first in mid-September and again in early November. And with one more meeting on the calendar in mid-December, the Fed has an additional opportunity to cut rates before the end of the year.But inflation took a surprising turn in October. And at this point, a third rate cut in 2024 is looking iffy.A small but notable increase in inflationOctober’s Consumer Price Index (CPI), which measures changes in the cost of consumer goods and services, showed that annual inflation rose by 2.6%. That’s not an alarmingly high rate of inflation. It’s also only a modest uptick from September’s CPI reading, which measured annual inflation at 2.4%.But in the eyes of the Fed, this looks like a step backward. And when the Fed lowered its benchmark interest rate in November, it warned that it would continue to monitor inflation and adjust its stance on rate cuts as necessary. Given October’s higher CPI reading, it’s now questionable as to whether the Fed will move forward with a third rate cut in December vs. holding rates steady.How interest rate cuts affect your walletThe Fed isn’t in charge of setting consumer borrowing rates. When you sign a mortgage, your specific lender dictates what rate you get. And when you put an auto loan in place, your lender sets the rate for that, too.But borrowing rates tend to rise and fall in line with the Fed’s benchmark interest rate, known as the federal funds rate. If the Fed makes another rate cut late this year, it could set the stage for more affordable borrowing in 2025. And if the Fed holds rates steady, it could mean that some people will need to wait longer to take out a more affordable loan.Of course, the Fed’s rate cuts aren’t the best news for savers, as they’ve been causing savings accounts and CDs to pay less. If the Fed hits pause on rate cuts in December, consumers will get a little more time to earn extra interest on their savings or to open a CD while rates are strong.Ultimately, since it’s too soon to know what the Fed will do in December, your best bet may be to prepare for either scenario. If you’re hoping for a rate cut so you can save money on a loan you sign in early 2025, work on boosting your credit score so you’re more likely to qualify and snag a great deal. That way, even if the Fed doesn’t make another rate cut, you’ll still be in a stronger position to borrow.Similarly, if you’re worried about a December rate cut and have money you want to earn interest on, open a CD sooner rather than later. Also, make sure you’re earning as much interest on your savings as possible. If your bank isn’t paying you around 4%, check out this list of the best high-yield savings accounts today.Without a crystal ball, it’s hard to put a finger on what the Fed will do next month. It’s best to prepare for all possible scenarios, just in case.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. 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.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.”}]] [[{“value”:”

Inflation wreaked havoc on Americans’ finances for much of 2022 and 2023. But thankfully, things have been better this year, with annual inflation rising at a much slower pace.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

Since annual inflation had been steadily creeping downward toward the 2% mark, which is the Federal Reserve’s ideal inflation target, the central bank lowered its benchmark interest rate twice this year — first in mid-September and again in early November. And with one more meeting on the calendar in mid-December, the Fed has an additional opportunity to cut rates before the end of the year.

But inflation took a surprising turn in October. And at this point, a third rate cut in 2024 is looking iffy.

A small but notable increase in inflation

October’s Consumer Price Index (CPI), which measures changes in the cost of consumer goods and services, showed that annual inflation rose by 2.6%. That’s not an alarmingly high rate of inflation. It’s also only a modest uptick from September’s CPI reading, which measured annual inflation at 2.4%.

But in the eyes of the Fed, this looks like a step backward. And when the Fed lowered its benchmark interest rate in November, it warned that it would continue to monitor inflation and adjust its stance on rate cuts as necessary. Given October’s higher CPI reading, it’s now questionable as to whether the Fed will move forward with a third rate cut in December vs. holding rates steady.

How interest rate cuts affect your wallet

The Fed isn’t in charge of setting consumer borrowing rates. When you sign a mortgage, your specific lender dictates what rate you get. And when you put an auto loan in place, your lender sets the rate for that, too.

But borrowing rates tend to rise and fall in line with the Fed’s benchmark interest rate, known as the federal funds rate. If the Fed makes another rate cut late this year, it could set the stage for more affordable borrowing in 2025. And if the Fed holds rates steady, it could mean that some people will need to wait longer to take out a more affordable loan.

Of course, the Fed’s rate cuts aren’t the best news for savers, as they’ve been causing savings accounts and CDs to pay less. If the Fed hits pause on rate cuts in December, consumers will get a little more time to earn extra interest on their savings or to open a CD while rates are strong.

Ultimately, since it’s too soon to know what the Fed will do in December, your best bet may be to prepare for either scenario. If you’re hoping for a rate cut so you can save money on a loan you sign in early 2025, work on boosting your credit score so you’re more likely to qualify and snag a great deal. That way, even if the Fed doesn’t make another rate cut, you’ll still be in a stronger position to borrow.

Similarly, if you’re worried about a December rate cut and have money you want to earn interest on, open a CD sooner rather than later. Also, make sure you’re earning as much interest on your savings as possible. If your bank isn’t paying you around 4%, check out this list of the best high-yield savings accounts today.

Without a crystal ball, it’s hard to put a finger on what the Fed will do next month. It’s best to prepare for all possible scenarios, just in case.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

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.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

“}]] Read More