Chase IHG Traveler is offering a sign up bonus of 100,000 points after $2,000 in spend within the first three months
Card Details
No annual fee
Card earns at the following rates:
5x points per $1 spent on IHG properties
2x points per $1 spent on gas stations, grocery stores and restaurants
1x points per $1 spent on all other purchases
Gold elite status when you spend $10,000 on your card each calendar year
Fourth Reward Night Free on any stay of 4 or more nights
20% discount when purchasing points
Our Verdict
This has been as high as 120,000 points in the past. Not really worth considering the IHG Premier card always has a better bonus (e.g we recently saw five free nights of up to 60,000 points per night).
For a limited time, the $0-annual-fee IHG One Rewards Traveler Credit Card has boosted its sign-up bonus for new cardholders, offering plenty of points to use toward future travel goals.
Those who apply by Nov. 20, 2024, can earn 100,000 bonus points after spending $2,000 on purchases on the card in the first three months from account opening. That can amount to up to two nights at over 5,700 IHG Hotel and Resort properties.
It’s a 20,000-point increase over the card’s previous bonus, and it maintains the same spending requirement. It’s a solid introductory offer for a $0-annual-fee credit card. The ongoing value of the card’s perks and rewards can also help you earn more free nights.
The card’s features include:
Up to 17 points total per $1 spent at IHG (5 from card, 10 from loyalty program, 2 from automatic elite status).
3 points per $1 spent on monthly bills, gas stations and restaurants.
2 points per $1 spent on all other purchases.
Perks that come with automatic silver status (20% bonus points, free internet, no blackout dates for rewards nights and more)
When you redeem points for a consecutive four-night IHG hotel stay, you’ll get a fourth Reward Night free that’s redeemable at the same hotel during the same stay. There’s also an opportunity to earn 10,000 bonus points after spending $10,000 every calendar year.
Overall, it’s a valuable pick if IHG or its properties are your preference for travel and you can pay off the card’s balance in full every month to avoid interest charges.
From the rugged high desert to the dramatic peaks of its mountain ranges, New Mexico—known as the Land of Enchantment—has a landscape unlike any other. But is New Mexico a good place to live? To help you evaluate whether New Mexico could be your next home, here are the pros and cons of living in the state.
Is New Mexico a good place to live?
New Mexico’s largest cities, Albuquerque and Santa Fe, serve as cultural and economic hubs. Albuquerque is the state’s largest city and blends urban living and proximity to natural beauty, with the Sandia Mountains and the Rio Grande providing a stunning backdrop. Santa Fe, on the other hand, is known for its rich artistic community, historical architecture, and distinctive adobe-style homes. New Mexico’s economy is supported by industries like oil and gas, tourism, and government jobs, with the Los Alamos National Laboratory being a key employer in the state.
Beyond its cities, New Mexico is known for its diverse landscapes, which include deserts, forests, and mountains. However, like any state, it comes with its own set of challenges, from a dry climate and limited job opportunities.
New Mexico state overview
Population
2,117,522
Biggest cities in New Mexico
Albuquerque, Las Cruces, Rio Rancho
Average rent in Albuquerque
$1,275
Average rent in Las Cruces
$995
Average rent in Rio Rancho
$1,537
1. Pro: Stunning natural landscapes
New Mexico’s diverse and dramatic landscapes are one of its most significant pros of living there. From the White Sands National Park to the Carlsbad Caverns and the Gila Wilderness, the state boasts a wide range of outdoor experiences. Whether you enjoy hiking, skiing, or exploring national parks, the opportunities for outdoor adventure are endless.
Insider scoop: Consider exploring some lesser-known gems like the Bisti/De-Na-Zin Wilderness, an alien-like landscape of hoodoos and badlands perfect for photography and quiet hikes.
2. Con: Limited job opportunities
While New Mexico’s economy is growing, particularly in industries like tourism, energy, and government, job opportunities can be limited. Outside of Albuquerque and Santa Fe, the job market is more concentrated in fields like agriculture and government work. This can make it challenging for those seeking employment in tech, finance, or other sectors that are booming in nearby states like Colorado or Texas.
3. Pro: Affordable cost of living
Compared to other southwestern states like Colorado and Arizona, New Mexico offers more affordable rental options. In Albuquerque, the average rent for a one-bedroom apartment hovers around $1,275, making it an attractive choice for renters looking for lower costs without sacrificing urban amenities. In contrast, cities like Denver see one-bedroom rents soar past $2,000. Even Farmington, known for its access to outdoor activities and proximity to the Navajo Nation, remains relatively affordable compared to pricier markets.
4. Con: Rural isolation
New Mexico’s wide-open spaces can feel pretty isolating, especially if you’re in one of the more remote areas. While some people love the quiet, rural lifestyle, it’s not for everyone—especially if you prefer being close to city conveniences like shopping, dining, or entertainment. In smaller towns, access to things like healthcare or even just a good grocery store might mean a long drive to the nearest bigger city. Plus, if you’re new to the area, it can be tough to build a social circle when you’re far from the action and meeting new people takes more effort.
5. Pro: Various cultural influences
New Mexico is home to a handful of cultural influences that blend Native American, Hispanic, and Anglo ways of life. The state has 23 Native American tribes, including the Navajo Nation and 19 Pueblo communities, which contribute to its rich history and traditions. Events like the Albuquerque International Balloon Fiesta and Santa Fe’s Indian Market draw visitors from around the world and highlight the state’s diverse heritage.
6. Con: Dry climate and water shortages
While the sunny, dry climate of New Mexico is appealing to many, it also comes with challenges, particularly when it comes to water. The state has been dealing with drought conditions for years, leading to water shortages in both urban and rural areas. Residents must be mindful of water usage, especially in the summer months when restrictions are often put in place. The lack of humidity can also be tough on the skin and respiratory system, making it a con for those who are not used to desert living.
Insider scoop: Keep a good humidifier at home can help combat the dryness, especially in the winter when indoor heating further strips the air of moisture.
7. Pro: Year-round sunshine
With over 300 days of sunshine per year, New Mexico offers a pleasant climate for those who love the sun. The state’s high desert location means it enjoys a dry climate, with warm days and cool nights, even in the summer. While winters can bring snow to the northern regions and mountains, most areas remain sunny and mild throughout the year. This abundance of sunshine makes outdoor activities accessible year-round and contributes to an overall sense of well-being for many residents.
Insider scoop: Take advantage of the early mornings and late afternoons for outdoor activities, especially during the hot summer months.
8. Con: It can get windy
New Mexico’s high desert environment comes with the challenge of frequent windy conditions, especially during the spring months. In some parts of the state, particularly the eastern plains, strong winds are a common occurrence, and wind speeds can reach over 40 miles per hour. The wind can make outdoor activities like hiking or biking less enjoyable and even hazardous on particularly gusty days. It also contributes to blowing dust and debris, which can reduce air quality and cause respiratory issues.
9. Pro: The food scene is delicious
New Mexico’s food culture is thriving, heavily influenced by both Native American and Hispanic traditions. The state is known for its red and green chile, which you’ll find on everything from burgers to breakfast burritos. In fact, “red or green?” is the official state question, referring to which type of chile you prefer on your dish. Santa Fe and Albuquerque are home to numerous award-winning restaurants that serve up local flavors, from traditional New Mexican cuisine to contemporary fusion dishes.
Insider scoop: When dining in New Mexico, order your chile “Christmas-style” if you can’t decide between red or green—it’s a combination of both and offers the best of both worlds.
10. Con: The roads are in poor condition
One significant drawback to living in New Mexico is the poor condition of many of its roads. Outside of major cities, road maintenance can be inconsistent, particularly in rural and remote areas. Potholes, cracks, and uneven pavement are common, making driving more difficult and potentially damaging to vehicles. Additionally, the state’s vast stretches of highways often go long periods without repair, which can lead to hazardous driving conditions.
Much ink has been spilled on the 4% rule, including here on The Best Interest.
The short and sweet definition? The 4% rule is a retirement strategy that suggests withdrawing 4% of your portfolio’s value annually, adjusted for inflation, to ensure your savings last for a 30-year retirement.
If you’d like to dive deeper on some nuance of the rule, read this: Updated Trinity Study and the 4% Rule.
And if you’d like to avoid the common mistakes of using the 4% rule, read this: You’re Probably Using the 4% Rule All Wrong
Today, though, I want to show you some compelling data about the optimism and conservatism built into the 4% rule.
Ultimately, you’ll see that the 4% rule comes with major risks.
All Models Are Wrong
All models are wrong?
No, not that kind of model. I’m talking about numerical models. The idea that you can use numbers and figured to represent or simulate reality. Your numbers will never, ever be a perfect representation of reality – you can’t predict the future. All models are wrong!
…but some are useful. Models are used all over modern society. One hopes that their models can “bound” reality, providing bookend scenarios to how reality might shape up (good vs. bad, optimistic vs. conservative, etc). We can use models to explain how particular variables will or won’t affect reality.
Weather forecasting is a terrific example. Meteorologists use numerical models to simulate the atmosphere by solving complex mathematical equations based on physical laws, such as the conservation of mass, energy, and momentum. These models take in data from satellites and weather stations, then simulate how the atmosphere will evolve over time.
They’re never perfect. In that way, they’re always wrong. But they’re certainly useful.
Further reading: The Madness of Forecasting
Retirement Forecasting
It’s a fool’s errand to predict the future performance of investing markets. But the 4% rule provides a numerical “bookend,” giving direction to retirees.
The hardest pill to swallow about the 4% rule is that we know it’s wrong. We just don’t know which direction it’s wrong in.
Most likely, as you’ll see below, it’s too conservative. It’s important for retirees to internalize that truth!
But there’s a possibility the 4% rule is too aggressive. And that’s a scary possibility. It means you might run out of money in retirement. Yikes.
Visualizing the 4% Rule
I used the terrific 4% rule visualizer from Engaging Data to create the charts you’ll see below. I recommend playing around with that tool yourself.
As with any modeling, the input assumptions are vitally important. I assumed:
We’re investing in a diversified 60% stock, 40% bond portfolio.Yes, this varies slightly from the 4% rule’s original assumption of a 50/50 portfolio. But 60/40 is more in line with retirement best practice.
I assumed a 30 year retirement timeline. To make the math easy, I assumed a $1 million starting portfolio. Thus, a 4% withdrawal in Year 1 is $40,000, and each future withdrawal is adjusted up for inflation.
I assumed that taxes and investment fees are included in annual spending. This is a key assumption, but one that’s often overlooked. In other words:
Are you withdrawing 4%, and then paying taxes on those withdrawals (perhaps another 0.4%), and then paying investment fees on those assets (perhaps another 0.2 – 1.5%)? That’s actually more like a ~4.5+% annual withdrawal.
Or, are you withdrawing 4%, which includes the requisite taxes and fees. Perhaps you’re only “netting” ~3.5% to spend on your lifestyle, and the other 0.5% pays taxes and fees.
I’m using the second scenario, not the first.
While the Engaging Data website does look at market history back to 1871, I don’t care too much about anything before World War 2. The American and global economic systems were far different then. I can’t cut that data out of my results, but I recommend focusing on 1950 onward.
Caveats Apply…
I’m beating a dead horse here in the world of retirement planning. There’s an asterisk on everything. But, to pre-empt any guff, let’s be clear:
The 4% rule is way more rigid than how any normal human would spend in retirement. Lifestyle variations, taxes, inflation rates, healthcare costs, and the potential for longer retirement periods make any withdrawal rule an imperfect one-size-fits-all strategy.
The 4% rule doesn’t account for Social Security, which I think is a huge mistake.
The 4% rule uses past market results to make future retirement decisions – it’s a numerical model! We know the risks involved there.
Results – How Does the 4% Rule Hold Up?
In short, the 4% rule is like playing rec league basketball with Lebron James on your team. You’ll win, and it will be overkill.
Out of the 123 unique 30-year periods we can observe, only one of them leads to “failure.” It ran out of money in Year 28 (barely a failure, at that).
The median result not only supported our retiree’s lifestyle, but also left them with $2.8 million at death. Again – that’s the median result. 30 years worth of withdrawals, and still another $2.8 million leftover. That’s overkill!
We’ve made a trade-off using the 4.0% rule. That trade-off is: in order to avoid a ~1% chance of retirement failure, are you willing to accept the 50% chance that you underspend in retirement so severely that you end up with 3x the assets at death as when you retired?”
That’s what we’re talking about here. Severe underspending. Severely not enjoying the fruits of your labor. It’s worth thinking about that trade-off. Personally, I don’t think it’s worth it. I don’t mind increasing my “failure odds” above 1% if it means I get to spend a bit more.
Another crazy stat: let’s compare the 90th percentile result against the 10th percentile result. These two scenarios are equally likely, one being on the good side of fortune and the other on the bad side:
90th percentile: our retiree dies with $6M after 30 years.
10th percentile: our retiree dies $800K after 30 years
The 10th percentile result is pretty close to, “I died with as much money as I started retirement with.”
The 90th percentile result is, “I died with 6x more money than I started retirement with.”
And they’re equally likely to happen. Wild!
While it’s important to acknowledge the one failure of the 4% rule (albeit after 28 years of withdrawals), it’s hard to walk away thinking anything other than, “The 4% rule is overkill.”
Adjust the Rate, Adjust the Timeline
So let’s play around with the numbers a bit.
Let’s extend the timeline beyond 30 years.
And let’s toggle the withdrawal rate higher.
But we should first ask – what’s an appropriate “failure” metric? The answer, by nature, will be completely arbitrary. After all, we’re using a numerical model that we know cannot be correct. Nevertheless, I vote for the following:
If more than 20% of test retirements fail, then I think our scenario is too aggressive, too risky.
If the median result spends down more than half of our retirement nest egg (e.g. dies with less than $500K after starting with $1M), then I think our scenario is too risky. Why? Because retirement research clearly shows that retirement failure is a slippery-slope/accelerating problem. If our median result is down 50% after 30 years, then many of those individual scenarios would accelerate toward near-term failure.
Timeline Failure
If we keep our withdrawal rule at 4%, but extend the timeline out to 53years (!!), then we reach ~20% of our test retirements failing.
The median scenario ends with $5.5M. The best timelines here finish with upward of $65 million.
We’re saying that a 40-year old can retire on the 4% rule and reasonably (~80% odds) expect to still have assets at age 90.
That leads me to a similar takeaway as before: the 4% rule has historically skewed toward overkill!
Withdrawal Rate Failure
Let’s go back to a 30-year timeline, but let’s now dial up the withdrawal rate above 4.0%. When do we reach one of failure criteria?
At 4.85%…
Using a 4.85% withdrawal rate, we see that:
20% of our test cases fail before 30 years, the earliest of which being after Year 20.
Our median case still has $1.7M after 30 years – more than we started with!
As a reminder, 4.85% equates to 21% more spending every year than the 4% rule. That’s a big difference in lifestyle.
Let’s Get the Median Below $1M
I want to press our luck and push the limits. What withdrawal rate does it take so that our median result has a retiree with less than $1M at death? In other words, I want to see more than half of our simulations outspending their investment growth.
The answer: a withdrawal rate of 5.2%
In this case, about 28% of our scenarios outright fail, and another 22% finish between $0 and $1M.
Let’s Get Failure to 50%
One more experiment: at what withdrawal rate do 50% of scenarios outright fail? Clearly this is too much risk to bear. But it’s helpful to use numerical models to “define your limits,” and this is just that.
The answer: a withdrawal rate of 6.25%
You’d never want to start retirement knowing that you have a 50% chance of go broke prior to death. But it’s worth understanding where the limits of withdrawal rates lie.
“But I’ve Read About 3.5%, 3%, and Lower Rules…”
Yes, some conservative retirement commentators combine multiple factors that result in low withdrawal rates like 3.5%, 3.0%, and less.
Quite simply, I think 3.5%, 3.0%, or lower withdrawal rates are simply beyond the pale. Those commentators are suffering from the crushing costs of conservative retirement planning.
Simply look at the 3.5% withdrawal rate chart below:
3.5% is a recommendation that someone chronically underspends their potential, knowing that anyone who would have done so in the past would have at worst died with the same $1M they started with (for 3.5% withdrawal rate) or at worst died with $1.6M (for 3.0% withdrawal rate).
It’s like driving at 40 miles per hour on the Interstate. “But I want to be safe!”, they clamor as normal traffic wizzes around them. Their obsession with safety causes more harm than good.
What’s Jesse’s Answer?!
My big takeaway from this fun experiment: I plan on starting higher than 4.0%, and adjusting as I go.
On one hand, I would hate to start at 4.75%, then live through an “unlucky future” and ultimately run out of money.
But I would equally hate to start at 4.0%, then live through a “normal” (or better) future, and ultimately end up with many multiples of my original nest egg at death.
The “adjust as I go” takes this into account. If I need to be more conservative for a few years, I will be. If I can press on the gas for a few years, I’ll do that too.
Quite simply, the biggest risk of the 4% rule is underspending your retirement potential. And it’s biggest flaw is its rigidity.
It’s a numerical model. And a helpful one at that. But it’s not real life.
Thank you for reading! If you enjoyed this article, join 8500+ subscribers who read my 2-minute weekly email, where I send you links to the smartest financial content I find online every week. You can read past newsletters before signing up.
-Jesse
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Do you want to learn how to get paid to shop? It’s possible! Many companies and apps now give you ways to get paid for shopping that you might already do. You can make extra cash by grocery shopping, buying clothes, or even just browsing stores. These opportunities range from being a personal shopper to…
Do you want to learn how to get paid to shop? It’s possible! Many companies and apps now give you ways to get paid for shopping that you might already do.
You can make extra cash by grocery shopping, buying clothes, or even just browsing stores. These opportunities range from being a personal shopper to taking surveys about products you buy. Some options let you shop for yourself, while others involve shopping for other people. It’s a fun way to earn money doing something you enjoy.
Over the years, I’ve found that there are so many ways to make money while shopping, and it’s been a great side hustle for me. From getting paid to shop for others to earning cash back on my own purchases, it’s an easy and enjoyable way to bring in extra income.
How To Get Paid To Shop
Below are the best ways to get paid to shop.
1. Personal shopper
Personal shoppers help people buy things. They pick out clothes, gifts, and other items for clients, so this can be a fun way to get paid for shopping.
To become a personal shopper, you need good taste and people skills. You should enjoy fashion and keeping up with trends.
Many personal shoppers work in person in retail stores, but you can also get paid to shop online for others. They help customers find outfits and accessories. Some work for wealthy clients, buying everything from groceries to designer clothes.
You can start by getting a job at a department store and looking for positions in personal shopping or styling. Another option is to work for yourself and you can find clients through word-of-mouth or online platforms.
When I was younger, I had a friend who was a personal shopper for a family. My friend mainly did their grocery shopping and ran errands, but would occasionally buy gifts for when the family was attending a birthday party or a wedding.
2. BestMark
I’ve done a lot of mystery shopping over the years, and it’s been a fun way to earn extra money while doing something I already enjoy. Whether it’s evaluating a store’s customer service, trying out new products, or going to a restaurant, it’s pretty easy work.
BestMark is a top mystery shopping company that’s been around since 1986.
As a BestMark shopper, you’ll visit stores, restaurants, and other businesses. You’ll act like a regular customer and evaluate your experience, and this might include checking product quality, service speed, and staff friendliness.
After your visit, you’ll fill out a detailed report online. BestMark gives you a list to help you understand what to look for during your shop.
The pay for BestMark shops varies, but you can tend to earn between $10 and $20 per task. For most assignments, you will get your meal or whatever you buy reimbursed. They usually give you a limit on what you can spend or they specifically tell you what to buy.
Recommended reading: 9 Best Mystery Shopping Companies To Work For
3. Swagbucks
Swagbucks is a popular website that pays you to shop online, and it’s free to join and easy to use.
I’ve been using Swagbucks for almost 10 years now, and I think it’s pretty easy to earn points.
To get paid to shop with Swagbucks, there are two main ways to earn points:
Earn cash back when shopping online. For example, right now you can get up to 8% cash back when shopping at Macy’s, up to 4% when shopping on Amazon, up to 10% when shopping at Best Buy, and more.
Earn points (SB) by submitting your shopping receipts. You can submit any receipt that you have from the last 14 days – both in-store and online receipts. You can then earn points. For example, you can get 50 points for any loaf of bread that you buy, 50 points for any bananas, 900 points for diapers, and more.
When you’ve collected enough SB, you can trade them for gift cards. You can pick from lots of popular stores. If you prefer cash, you can get money sent to your PayPal account instead.
I’ve redeemed over 100 gift cards from Swagbucks over the years, and I love how easy this rewards site is to use.
If you join Swagbucks through my referral link, you will receive a $10 bonus.
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Swagbucks is a site where you can earn points for answering surveys, shopping online, watching videos, using coupons, and more. You can use your points for gift cards and cash.
4. Rakuten
Rakuten is a popular way to earn cash back when you shop online. It’s free to use and super easy to get started.
I have used Rakuten for years and it’s an easy way to get cash back for the online shopping that you already do. In fact, I just used it on a hotel booking, and I received 2% back, which adds up quickly for a hotel!
You just sign up for an account on Rakuten’s website or app. Then when you want to buy something, go through Rakuten first. They’ll send you to the store’s site to shop like normal.
After you make a purchase, Rakuten adds cash back to your account. The amount varies by store, but it’s often 1% to 10% of what you spend. Some stores even pay you 20% or more during special sales.
You can get paid by check or PayPal. Rakuten sends out payments every 3 months and you need at least $5 in your account to get paid.
So, why does Rakuten give you this cash back? Rakuten makes money by getting a commission from stores when you buy stuff. They share part of that commission with you as cash back.
Please click here to sign up for Rakuten. Plus, you can get a $30 bonus when you spend $30 if you join right now (at the time of this writing; please double-check the current offer).
5. Stitch Fix stylist
Want to get paid to shop for others? Becoming a Stitch Fix stylist might be perfect for you. This job lets you work from home and help people look their best.
Stitch Fix hires stylists for women’s, men’s, and kids’ styling. They even train you, so you can start with no experience.
As a Stitch Fix stylist, you’ll pick out clothes for customers based on their likes and needs. You’ll use a computer to see what items are available and choose the best ones for each person.
6. Instacart shopper
Becoming an Instacart shopper is a way to make money grocery shopping on your own schedule.
As an Instacart shopper, you’ll pick up and deliver groceries to customers. Instacart has full-service shoppers, where you shop and deliver groceries, as well as in-store shoppers, where you only shop in-store but don’t deliver (someone else picks up the items and delivers).
To start, you need to be at least 18 years old. You’ll also need a smartphone to use the Instacart app as this app tells you what to buy at the grocery store and where to deliver it.
Instacart gives you a payment card to use at stores. You’ll get this card about a week after signing up. You use it to pay for the groceries you’re buying for customers.
Recommended reading: Instacart Shopper Review: How much do Instacart Shoppers earn?
7. Shopkick
Shopkick is a free app that lets you earn rewards for shopping. You can get points called “kicks” for different activities. These include scanning products in stores and uploading receipts.
You don’t even need to buy anything to earn kicks. Just walking into certain stores can give you points. The app works with many popular retailers like Target and CVS.
As you collect kicks, you can trade them for gift cards.
To start, just download the Shopkick app on your phone. Then link your credit or debit cards to your account, because this lets you earn kicks automatically when you shop at partner stores.
8. Ibotta
Ibotta is a free app where you can earn cash back on your everyday purchases. It works for both online and in-store shopping at many popular retailers.
To get started, download the Ibotta app on your phone. Before you shop, browse the app for “offers” at your favorite stores. You’ll see cash back deals on specific items or entire purchases.
When shopping in stores, buy the items with offers (of course, make sure these are items that you actually want to buy because the item is not free, it is simply more like getting a discount). Then, take a picture of your receipt with the app when you are done. Ibotta will match your purchases to the offers and add cash back to your account.
For online shopping, start your purchase through the Ibotta app or website. Shop as usual, and you’ll automatically earn cash back on qualifying items.
Ibotta works with many big stores like Walmart, Target, and Kroger.
Once you reach $20 in your account, you can cash out via PayPal or choose a gift card. It’s a simple way to make your shopping more rewarding.
This app is available for both Android and iOS (iPhone).
You can sign up for Ibotta here.
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Ibotta is an app where you can get cash back and earn free gift cards. Simply submit your receipts on your everyday purchases with your phone.
9. Ath Power Consulting
Ath Power Consulting is a company where you can get paid to do mystery shopping. They have a huge network of over 600,000 shoppers across North America.
Ath Power does more than 10,000 mystery shops each month. They work with many well-known brands and companies around the world.
Ath Power mystery shoppers shop in person for companies, and then share their thoughts about the products and services they try. Companies can then use this information to improve what they sell to customers.
10. IntelliShop
IntelliShop is a company that hires for mystery shopping jobs. You can sign up to become a secret shopper and get paid to visit stores.
Most tasks pay between $5 and $20. They usually take less than 15 minutes in the store, and then after your visit, you’ll need to fill out a report.
IntelliShop has jobs in stores, online, and over the phone.
As a mystery shopper for any of the mystery shopping companies on this list, please remember to keep any receipts or business cards from your visit. You’ll need these to prove you completed the task and get paid.
Recommended reading: How To Become A Mystery Shopper
11. Care.com
Care.com is a site where you can earn money by helping others with tasks like grocery shopping. You can sign up as a helper on their platform to find local gigs.
The site connects you with people who need assistance, such as parents and seniors. You might help with grocery shopping, cooking, or other errands.
As a helper on Care.com, you can set your own rates. Some helpers charge between $15 and $25 per hour. The amount that you decide you want to get paid may vary based on your experience and the tasks you do.
You may be able to find enough gigs to make this a full-time career, or you can also do this part-time in your spare time.
12. Capital One Shopping
Capital One Shopping is a free tool that can help you save money when you shop online. It’s a browser extension and mobile app that works in the background while you browse.
When you’re ready to check out, Capital One Shopping searches for coupon codes automatically and it tries to apply them to your order to get you the best deal.
The tool also compares prices across different websites. This can help you find the lowest price for items you want to buy.
You can earn rewards called Shopping Credits when you make purchases through Capital One Shopping. These credits can be redeemed for gift cards to popular stores.
While you won’t get paid directly to shop, you can save money and earn rewards. This can add up to significant savings over time and even free gift cards.
I recently received a $71 gift card for simply using the Capital One Shopping browser extension, which was super easy to get.
You can learn more at Capital One Shopping Review: Is It Worth It?
13. Fetch Rewards
Fetch Rewards is a free app that lets you earn points for shopping. You can get points by scanning any receipt or shopping online through the app.
I use Fetch Rewards for nearly all of my grocery shopping receipts. What I like about Fetch is that you don’t need to clip coupons or look for special offers. You just buy products and scan your receipts when you are done. It takes less than one minute to scan your receipt and earn points, so it is very easy.
Fetch gives you points for every receipt you upload. You can earn extra points by buying specific brands or products. The app has special offers where you can earn extra points, such as for buying a specific brand of cheese.
You can turn your points into gift cards from many stores and restaurants. Some options include Amazon, Target, and Starbucks.
You can sign up for Fetch Rewards here.
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With this app, you can scan your grocery receipts (from any grocery store or wholesale club, any time) and earn free gift cards. It is free to sign up and easy to use.
14. Uber Eats
With Uber Eats, you can make money by delivering food.
To get started, you’ll need to create an account and fill out some forms. Once approved, you can begin accepting delivery requests through the Uber app.
Uber Eats drivers can earn around $15 to $26 per hour on average. Your earnings can vary based on factors like your location, how busy it is, and the amount that you earn in tips.
You will want a reliable vehicle and a valid driver’s license, of course, for this side gig.
Recommended reading: 14 Ways To Make Money Driving
15. DoorDash
DoorDash is another way to get paid for delivering food.
DoorDash pays Dashers weekly through direct deposit. If you need money faster, DoorDash offers a Fast Pay option. This lets you cash out your earnings right away for a small fee.
Remember, you’re responsible for your own expenses like gas and car maintenance. It’s a good idea to track these costs to see how much you’re really earning.
16. Taskrabbit
Taskrabbit is an app that lets you make money by doing odd jobs for people in your area. You can pick tasks that fit your skills and schedule.
Some popular jobs on Taskrabbit include cleaning houses, assembling furniture, and running errands (such as shopping for others).
Taskrabbit gives you the flexibility to choose when and how much you work, as well as the type of work that you want to do.
17. Walmart personal shopper
You can get paid to shop as a Walmart personal shopper. This job lets you pick out items for customers who order online.
You’ve probably seen Walmart personal shoppers when you’ve been in Walmart. They work for Walmart and typically have a uniform and a very large basket where they collect items for different orders.
Walmart personal shoppers earn about $15 per hour on average.
Most personal shoppers work full-time or nearly full-time, between 32 to 40 hours a week.
As a personal shopper, you’ll walk around the store and find items customers want. You’ll need to be quick and careful to pick the right products.
Frequently Asked Questions
Getting paid to shop can be a fun way to earn extra money. There are different methods like using apps, shopping for others, and being a mystery shopper. Here are answers to common questions about how to get paid to shop.
How to get paid to go shopping?
You can get paid to shop by using cash back apps, becoming a personal shopper, or doing mystery shopping. Cash back apps give you money back on purchases. Personal shoppers buy things for busy people. Mystery shoppers check stores and fill out shopping assignments on their customer experience.
What are the top apps that pay you for shopping?
Some popular apps that pay you for shopping are:
Rakuten: Gives cash back on online purchases
Ibotta: Pays rebates on groceries and other items
Shopkick: Rewards you for scanning items in stores
Fetch Rewards: Gives points for uploading grocery receipts
These apps are free to use and can help you save money on things you already buy.
How can I earn cash by doing grocery shopping for others?
You can earn cash by grocery shopping for others through apps like Instacart or Shipt. Sign up as a shopper, get orders from customers, and deliver their groceries. You’ll get paid for each order you complete.
How much money do people usually make by delivering groceries?
The amount of money you can make by delivering groceries varies. Most shoppers make between $10 and $25 per hour, and your pay depends on factors like the number of orders you complete, the size of the orders, tips from customers, and time of day and demand.
Is being a secret shopper a good side hustle?
Secret shopping can be a good side hustle. It lets you earn money while shopping and dining out, but it’s not a full-time job. I have done a lot of mystery shopping assignments over the years.
What ways to get paid to shop on Amazon are there?
You can get paid to shop on Amazon in a few ways:
Use cash back sites like Rakuten when shopping on Amazon
Join Amazon’s Vine program to review products
Sell items on Amazon as a third-party seller
Sign up for the Amazon Associates Program to earn from product links
These methods can help you save money or earn extra cash while shopping on Amazon.
Best Ways To Get Paid To Shop – Summary
I hope you enjoyed my article on how to get paid to shop.
Getting paid to shop is a fun and easy way to make extra money while doing things you already like. I have been getting paid to shop for over 10 years now, and I have done almost everything on this list. While I’ve not earned a full-time income doing anything on this list, I have earned side income and plenty of free gift cards over the years.
You can use cash back apps or become a personal shopper to earn cash. You can make money buying groceries, clothes, or even taking surveys about your shopping habits.
Mystery shopping is another way to earn money by pretending to be a regular customer and reporting your feedback on your experience. Companies like BestMark and IntelliShop pay for this. Apps like Swagbucks and Fetch Rewards make it easy to earn by scanning receipts or shopping online.
Whether you want a side hustle or just want to save money, getting paid to shop is a fun way to make more money.
A typical home needs about 17 to 30 solar panels, according EnergySage, a solar and home energy product comparison marketplace
. This wide range reflects the many variables involved, such as energy use and amount of sunshine. For an average system size of 8.1kW in sunny California, you’ll need about 20 panels.
How to calculate how many solar panels you need for your house
To calculate how many panels you need, you can use this formula:
Number of panels = annual electricity use ÷ solar panel production ratio ÷ solar panel output
The following steps guide you through the formula.
1. Find your home’s annual electricity usage
Your electricity use is measured in kilowatt-hours (kWh). To determine how much electricity your home uses, look at your electric bill history, usually available online at your utility’s website. If your gas bill is combined with your electric bill, look at the portion of your bill that’s for electricity. You’ll need to add up 12 months of electric bill data; if your utility is one of a growing number that provides Green Button data from the U.S. Department of Energy, you can use that to download a spreadsheet of your bill history and quickly calculate the total kWh for a year
U.S. Department of Energy. Green Button. Accessed Oct 17, 2024.
.
2. Find the production ratio for your location
Solar production ratio is the ratio of a solar panel’s estimated energy output over time to its size. The production ratio depends on your location, because some regions get more sun per day than others, increasing a solar panel’s energy output
. You can look up your state’s solar production ratio on this map created by EnergySage.
3. Determine the output of your solar panels
Your solar panel output is measured in watts. Once you have quotes from installers, they will specify the output of the proposed panels. To calculate how many panels you’ll need before you get quotes, you can use 400W, the typical output for today’s residential solar panels.
4. Calculate how many panels you need
Let’s say your home uses 10,791 kWh annually, the average in the U.S. If your production ratio is 1.5, like it is for my home in California, you’ll need 18 panels to cover all of your home’s energy usage:
10,791 ÷ 1.5 ÷ 400 = 17.99 panels
Using this formula gives you a rough, high-level estimate. Your solar installer can refine your system sizing, taking into account the factors detailed below.
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Factors that affect how many solar panels you need
The exact number of solar panels you’ll need depends on these factors:
Your current electricity use
The key factor in determining the number of panels you need is how much electricity you use. If you have enough space on your roof, you’ll likely want enough solar panels to cover all of your electricity use.
Your future electricity use
Do you expect your family to grow? Are you planning to switch to an electric car or a heat pump? Will you be adding a refrigerator, pool, or air conditioning? It’s more cost-effective to install enough solar now to cover expected future use; that can also protect your investment if solar programs in your area, such as net metering, are phased out later.
The amount of sun you get
The more sun you get, the more electricity your solar panels can generate and the fewer panels you’ll need to cover your electricity use. You can get an idea of the solar resource in your area from the National Renewable Energy Laboratory (NREL) solar irradiance map.
Panel wattage and efficiency
Today’s typical residential solar installations use 400W panels, with an average range from 350W to 450W. Panels today have an average efficiency of 21% (with some up to 23% efficient), meaning that they convert 21% to 23% of the sunlight that hits them into electricity
. Higher-watt and higher-efficiency panels produce more energy but tend to cost more than their lower-watt and lower-efficiency counterparts. If your roof space is limited, you may be limited in how many panels you can have installed. In that case, you may want to consider higher-efficiency, higher-watt panels.
Your roof
How many panels you can have installed depends in part on the size of your roof, but there’s more to it than that. You’ll also need to consider the shape of the roof, whether it has obstructions such as vents and skylights, and whether it’s subject to shading from trees or buildings.
Your roof’s orientation also affects the number of panels you need; panels will generate the most energy on a south-facing roof, followed by east- and west-facing roofs
. Of course, your roof must be in good condition to be able to support the weight of the panels. After providing an initial quote using online tools, your installer will conduct a site visit to assess the condition of your roof and determine how many panels you can fit on it. If you can’t fit enough panels on your roof to cover all your electricity needs, it may still be worth covering a portion of your electricity.
Frequently asked questions
Does my house size affect how many panels I need?
Although house size may be a factor in how many panels you need, a much more significant factor is your electricity use. You are likely to use more electricity if you have a bigger house, but that might not be the case if your family is small and your house is energy-efficient.
Can I install more solar panels than I currently need?
If you expect your electricity use to increase, it’s a good idea to size your system for those future needs. Some utility companies have restrictions on system sizes, so check with your local utility to see how large they will let you size your system.
As winter approaches, it may make sense to prepare for the cold weather by sealing cracks and holes around doors and windows no matter where you live. Proactive steps like these may help cut down on your heating bills.
If you’re bracing for a big chill, or worse, a blizzard — predicted to become more intense in the coming years, despite shorter winters — you’ll be glad you protected or checked the pipes, roof, chimney, heating system, and water heater. Your wallet and physical well-being may benefit from the following ways to winterize a house and how to finance the projects.
Ways to Winterize a House
There are numerous ways to winterize a house beyond sealing cracks in doors and windows. And while the steps to winterize a home may differ in Alaska than in Texas, it still helps to get ahead of any issues that may arise.
You should also know that the timing of the first frost can vary from state to state. It may help to check the National Weather Service’s data that forecasts the first frost for each state to assist in your winterization preparation timeline.
The following tips to winterize a house may help you reduce future repair costs and heating bills. And figuring out ways to lower your heating bills is something to pay attention to due to the potential rise of the price of natural gas, which is often used to heat homes.
Protect Pipes or Pay the Piper
When deciding how to winterize a house, you may first consider how to address plumbing leaks and other issues.
Burst pipes can cause $5,000 or more in damage, according to Consumer Reports , citing information from the Insurance Institute for Business and Home Safety , which has a page of recommendations to help prevent frozen pipes.
Pipes in unheated places inside a home, including basements, attics, and garages, are among the most likely to sustain damage. But pipes running through exterior walls can also freeze in certain conditions, and so can those running through kitchen or bathroom cabinets.
Protecting the plumbing is clearly a situation where being proactive may save a homeowner money.
Pipe insulation can be as inexpensive as 50 cents per linear foot. Compare that to the $5,000 figure above, and the rewards of winterization can quickly become clear.
Adding insulation to attics, crawl spaces, and basements can help to keep those areas warmer, which can also help to keep pipes from freezing.
If sinks are located on exterior walls, it can help to keep the cabinet doors open during frigid temperatures (after removing any dangerous chemicals, including cleaners, if there are children or pets in the home).
Allowing cold water to drip can also help prevent pipes from freezing, making sense in frigid temperatures.
Address HVAC Maintenance and Repair
Nobody wants the heating system to perform poorly during the winter — much less have it break down.
It’s a good idea to schedule a professional maintenance appointment, including a filter change before freezing temperatures arrive. (Then it’s best to change the filter at least every 90 days.)
Additionally, maintenance and repairs to the heating, ventilation, and air conditioning (HVAC) system and cleaning out vents can improve airflow in your home.
It may be time to consider a new HVAC system for some people. The U.S. Department of Energy’s Energy Star program provides tips to homeowners to decide if replacing an HVAC system makes sense.
Signs that it might be time to replace the unit include:
• The heat pump is more than 10 years old.
• The furnace or boiler is more than 15 years old.
• The system needs frequent repairs, and energy bills are increasing.
• Rooms in the home can be too hot or too cold.
• The HVAC system is noisy.
If people in a home are away during reasonably regular times of the day, it can make sense to ask the HVAC professional about a programmable thermostat to save on energy costs.
The Environmental Protection Agency’s Home Energy Yardstick can help a homeowner determine if replacing an HVAC system makes sense.
Check the Roof, Gutters, and Chimney
Before winter hits, clearing the roof and gutters of leaves and other debris will help prevent snow and ice from building up and damaging the gutters — or, worse, the roof.
If ice or snow gets beneath roof shingles, it can lead to leaks and interior water damage. You may want to ask yourself if you need to replace your gutters. Do any shingles need to be glued down or replaced? Do any small leaks need to be repaired before they become big ones?
Plus, a chimney inspection can make sense before winter arrives. A chimney could have an animal nest lodged within, and there can also be structural problems. If the home has a wood-burning fireplace, creosote buildup can create a fire hazard. With a gas fireplace, a blocked chimney could lead to carbon monoxide backup, which can be life-threatening.
Addressing all these issues before winter comes can help you prevent future damage, reduce future repair costs and energy bills, and avoid a potential accident.
Examine the Water Heater
You want to check your water heater before temperatures plunge to avoid a chilly shower during winter.
Are areas of the water heater rusting or corroding? If so, this can lead to a leak. A professional can examine it, bleed the system to remove trapped air and mineral deposits, clean the pipes, and recommend and do repairs.
Think About Outdoor Equipment and Plants
Preventive winterization isn’t just about your home. You want to winterize your outdoor equipment, like a lawn mower or other power tools, to protect them as well.
Draining the oil from the appropriate equipment and taking it to a local recycling or hazardous-waste site can be your first step.
You also want to take care of general maintenance on equipment, including replacing old parts. That way, when spring rolls around and you need to mow your lawn or trim your bushes, you should be ready to go.
Additionally, inspect gas caps to ensure O-rings are intact; if not, get replacements from the manufacturer. Also, replace filters and lubricate what needs lubricating.
You may need to bring in the plants you initially placed outside to enjoy the summer sun when temperatures drop. Before doing so, check the plants for mealybugs, aphids, and other insects. Remove them, so they don’t spread to other plants.
Some people prefer to prune plants before transitioning them back into the house. If so, prune no more than one-third of each, pruning an equal amount off the roots. When repotting, pick a container that’s two or more inches bigger than the current one.
Gradually transition your plants to the new environment, which has different light and humidity levels. For a few days, bring the plants inside at dusk and put them back outside in the morning.
Over a period of 14 days or so, increase the indoor time until the process is complete and they’ve become indoor plants again, finishing the transition before temperatures go down to 45 degrees.
What’s the Cost of Winterizing a Home?
Pipe insulation, as noted earlier, can be relatively cheap, perhaps 50 centers per linear foot.
If a homeowner decides to insulate further, perhaps an attic, costs can range between $1.50 and $7.00 per foot, or a total of $1,700 to $2,100.
On average, an attic insulation installer may charge $70 an hour. If electrical work needs to be done for safe insulation around cables or junction boxes, you may expect to pay $80 an hour.
To hire someone to clean gutters and downspouts, you may pay an average of $119 to $227. An HVAC inspection might cost $325 and up, while the cost to replace an HVAC system could run between $5,000 and $10,000, depending upon the size of the home, among other factors.
What each of these services costs will depend on the locale, what types of repairs or unusual circumstances exist, and so forth.
Additionally, there are websites that allow a homeowner to enter a ZIP code and get an estimate of what a winterizing activity may cost. It makes sense to get quotes from local professionals to get an exact price.
Financing Winterization Projects
Some people pay for their home winterization costs out of pocket, while others may decide to get a home improvement loan. If you’re leaning toward a loan, comparing a home equity line of credit (HELOC) and a personal loan can make sense.
Recommended: How Do Home Improvement Loans Work?
A HELOC uses your home as collateral; for this to be an option, there needs to be enough equity in the property to borrow against it. If there is, and the loan amount required is large, it could make sense to apply for a HELOC.
Interest rates may be lower than those for a personal loan. Also, you can typically take draws from a HELOC up to the loan’s limit.
So if winterizing is coupled with indoor projects done through the cold season, for example, this might be a practical solution. In some cases, interest payments could be tax-deductible.
Recommended: The Different Types Of Home Equity Loans
A personal loan can make sense for recent homebuyers who haven’t built enough equity or for people planning smaller projects. Home winterization often fits into this category.
Applying for and receiving money from an unsecured personal loan is typically much faster than with a HELOC, partly because no appraisal is required for the loan.
Having an excellent credit score and cash flow can help a borrower get approved or receive better loan terms.
The Takeaway
Preparing your home for the harsh weather of winter can be one step you take to protect your house and potentially reduce your energy bills. However, many homeowners don’t take steps to winterize a house due to the upfront costs. Fortunately, there are ways to finance any home improvement projects.
If taking out a home improvement loan for home winterization projects makes sense, then here’s more about the fixed-rate unsecured personal loans offered by SoFi:
• Personal loans have no origination fees and no prepayment penalties.
• Qualifying borrowers may be eligible for loans up to $100,000.
• Applying online can be quick and easy.
• Customer service is available to help seven days a week throughout the process.
Winterize and protect your home with SoFi home improvement loans.
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Moving out of your parents’ house for the first time can feel exciting. Freedom, peace, and no one telling you what to do. But in reality, it’s not as easy—or as cheap—as it looks. There are hidden costs you may not have considered, and careful budgeting is key. You’ll also need to save enough money before making the leap to your own place. So, how much should you have saved before taking the plunge? Let’s break down the costs and help you figure out exactly how much you need to move out on your own.
So, how much money should you save before moving out?
Moving out is more expensive than you might think. While the cost of moving and monthly rent payments certainly factor into the cost, there’s so much more to consider. The actual amount varies depending on the person, but the general recommendation is to have six months worth of living expenses saved up before you move out and live on your own. Obviously, this can vary widely depending on where you live, as the cost of living in an apartment in Waco, TX pales in comparison to what you’ll pay in a San Francisco apartment. Let’s break down some of the expenses you’ll have to account for.
First, assess your current spending
Before you determine how much money you’ll need to move out, it’s crucial to evaluate how much you’re spending right now. Start by reviewing your last six months of bank statements. Break down your expenses into categories such as transportation, entertainment, food, and subscriptions. This will help you see what your monthly spending looks like and where your money is going.
Don’t overlook debts. If you’re making regular payments on student loans, a car, or credit cards, consider how these obligations will affect your ability to pay rent and other living expenses. If your current debt load feels overwhelming, try to pay down some of it before making the move to your own place. Understanding your current spending habits will give you a solid foundation to start building a budget for life after you move out.
Determine how much rent you can afford
One of the most important steps in moving out is determining how much rent you can realistically afford. A common reccomendation is that you should be spending no more than a third of your monthly take-home income on rent. To figure this out, start by calculating your monthly income after taxes. Multiply that amount by 0.30 to get the maximum rent you should consider. For example, if you take home $3,000 per month, you’d aim to spend no more than $900 on rent.
Keep in mind, this 30% rule is just a guideline. If you have other significant financial commitments, like loan payments or savings goals, you may need to adjust your rent budget accordingly. On the other hand, if you’re in a lower-cost area or sharing rent with roommates, you might be able to afford a higher percentage.Take a look at the average monthly rent in the city or area you wish to find a place. This will give you an idea of where you can afford to live and how much you’ll expect to pay.
Budget for additional upfront fees
Rent is just one part of the cost of leasing your first apartment. Before you even move in, you’ll need to prepare for several upfront fees. These expenses can catch you off guard if you’re not aware of them, so it’s important to budget for them alongside your rent.
Common fees include:
Application fee: Often ranging from $50 to $100, this fee covers the cost of processing your rental application.
Background check fee: Landlords typically charge between $35 and $75 to run a background check as part of the rental process.
Credit check fee: This can cost anywhere from $30 to $50, depending on the landlord.
Security deposit: Usually equal to one month’s rent, but it could be as high as two months’ rent in some cases. This deposit protects the landlord in case of damage or unpaid rent.
First and last month’s rent: Many landlords require both upfront to ensure you don’t skip out on the lease.
Move-in fees: These can range from $100 to $500, depending on your building, and are meant to cover elevator usage or building staff during your move.
Pet fees: If you have a pet, expect to pay a pet deposit or pet rent. Deposits may range from $200 to $500, while pet rent could add $25 to $50 per month to your rent.
Altogether, these fees can add up quickly, so be sure to include them in your budget as you plan for your move. By knowing what to expect, you can avoid surprises and make the transition to your new home smoother.
Factor in basic apartment necessities
But all those fees aren’t the only things you’ll need for your first month. Your apartment is empty, your cupboards are bare. You’ll need to stock up on cleaning and cooking supplies.
Before you settle in, you’ll need to shop for toilet paper, tissues, paper towels, garbage bags, laundry soap, dishwashing liquid, all-purpose cleaner, lightbulbs and other apartment essentials.
Don’t plan on ordering food every night, as that cost can add up quickly. You’ll have to cook at home to keep expenses down. In the kitchen, the cabinets and fridge will need to be filled with basic necessities like flour, sugar, baking soda, and vegetable oil, not to mention cookware. Be prepared to pay upwards of $200 to fill your pantry and supply closet.
Don’t forget utilities and recurring expenses
As soon as you move in, you’ll have to start to pay your monthly bills for recurring expenses. Utilities will consist of your electric bill to run your heat, air conditioning and appliances, your water bill and (in some apartments) a natural gas bill. Expect to pay between $125 and $175 a month in basic utilities.
There are additional monthly utility costs, as well, including internet access and cable or streaming services. If you’re cutting the cord and can still stay on your parents’ Netflix and Hulu account, you’ll save a ton, but you’ll still need an internet connection from your cable company or another provider.
You might also face monthly fees for garbage pickup, recycling, sewer and even parking. And don’t forget about your cell phone bill.
Do some research on the average costs of these services in the area to which you’re planning to move, and calculate how they fit into your budget. Pay all your bills on time, and don’t make the mistake of falling into debt and ruining your credit score.
Moving costs
Then there’s the cost of actually moving. Depending how much stuff you have, how much furniture you’re bringing with you and how far away you’re moving, your costs will vary. The average cost of hiring a moving company. Save some cash by having friends help or borrowing a truck.
Regardless of your furniture situation, you’ll need to budget for some. Even if you’re simply moving your own furniture into your new apartment, you’ll likely need to rent a moving truck or hire professional movers to haul that bed, couch and other large items.
If you decide to buy new furniture, try to keep costs down by hitting thrift stores and Facebook Marketplace. Renting a partially furnished apartment may be a more efficient option even if you’ll pay a bit more in rent.
Account for lifestyle costs
When you move out of your parents’ house, your lifestyle expenses are likely to increase. Beyond rent and utilities, you’ll need to account for everyday living costs that can add up quickly. These include groceries, transportation, entertainment, dining out, and personal items like clothing or toiletries.
If you’re used to sharing household responsibilities or having meals provided, managing all of this on your own can be an adjustment. Groceries alone can be a significant expense, especially if you’re not accustomed to meal planning or cooking at home. You’ll also need to factor in transportation costs, whether it’s fuel for your car, public transit passes, or rideshares.
It’s also important to think about how you’ll spend your free time. If you’re someone who enjoys going out frequently or spending on hobbies, you’ll need to adjust your budget accordingly to ensure you can maintain the lifestyle you want while still covering your essentials.
Keep an emergency fund
Aside from all that, you should put away as much as you are able in case of emergency or job change. Always keep somewhere between $500 and $2,000 aside for unexpected health, car or other circumstances — and don’t touch it.
Ready to move? Make sure you’re financially prepared
Now that you know the true cost of leaving the nest, you can compare it to your paycheck and determine if you can afford to move out, how much rent you can manage and how much you must save. Remember, you’ll need to be able to cover six months of these expenses to be comfortable. The last thing you want to do to yourself is miscalculate your expenses and have to move back in with your folks.
Well, it looks like we’re here in another US election year already.
As Advanced Mustachians, we already know that the ongoing battle of Harris vs. Trump should not be consuming much of our time. Sure, we do our research and cast our votes but after that we move right on to focus on other things within our own circle of control.
But out of all the things the politicians like to bicker about, there’s one area where MMM does need to set the record straight, and that area is of course money. Your money, the economy in general, and the overall wealth of the nation.
Politicians are already not known for being the sharpest tools in the shed when it comes to technical stuff like science, technology, or economics. But this year the discourse has become particularly dumb, as our candidates try to manipulate undecided voters in swing states with ideas that are based on irrational emotions rather than sound economic sense.
For one particularly funny example, you may have noticed that the competing party (Trump in this case) is attacking the incumbents (Biden/Harris) over the “bad economy.” When in fact the US economy is stronger than it has ever been, with the lowest unemployment we’ve ever seen as well.
It’s hard to imagine a better situation than we have right now, and in fact the recent bout of higher inflation is a sign that things have been going too well, and we needed to step on the brakes with the help of higher interest rates.
But somehow the people still seem to believe that we have a “bad” economy. Take a look at this Gallup poll showing that while most people (85%) are doing really well right now, they assume that it’s just their own good fortune – only 17% believe the economy is doing well.
This is mathematically impossible, because if most people are doing well, that’s the definition of a good economy! And suspiciously enough, this widespread wrongness correlates quite nicely with the rise of social media misinformation.
So the politicians and the news have been doing the opposite of what they should be doing in an ideal situation (sharing accurate information). And sure, we can always just ignore their speeches and go on with our lives. But when it comes to economics, knowledge is power (and money). The more accurately we understand how things really work, the wealthier we will all become.
So with all that in mind, I hereby present you with my list of the…
Top Dumb Things Politicians Want You To Believe About The Economy
1:The President Controls the Economy
If there’s a recession, the opposition party likes to blame it on the current president. If the economy is booming, the current president likes to give himself (or possibly soon herself) credit for all of that success. But really, the US economy is way too big – and thankfully way too free – for the president to control or really even influence all that strongly.
In reality, our economy is a gigantic machine which converts labor and materials into things like iPhones, hospitals and pumpkin pies. And although we’re the biggest economy at 26% of the planet, we are still heavily influenced by that much bigger 74% of economic activity that the other 7.6 billion people on Earth are busy producing everywhere else.
When we have our inevitable little boom and bust cycles, they are mostly caused by the normal cycle of irrational exuberance (and greed) like the 2007 housing boom, followed by brief periods of extreme fear and pessimism like the 2008-2012 financial and housing crash.
The government does play a role too, by setting tax rates and other rules. But the effects of these policies are usually so delayed and unpredictable, that you can’t draw a straight line between today’s president and today’s economy. In other words, the government does its best to adjust the rudder on our giant ship, but in the short term our economy lurches around on the waves and storms of the ocean.
2:The President Controls Interest Rates
This one is especially funny to me, as our candidates feign sympathy for the hard life of middle class Americans, who now face higher borrowing costs on their credit cards and car loans and mortgages. They claim they will fight to bring the interest rates down. Trump even goes as far as bullying our Federal Reserve board members (who can only do their jobs if we allow them to function as independent experts) and suggesting that he would take over the whole department, if elected.
The real story is that while monetary policy would be a terrible tool to leave in the hands of a sitting president (see Argentina), it does function as an excellent set of gas and brake pedals for the economy if used properly. When things slow down and unemployment gets too high, a cut to the interest rates will produce a boost in everything from new jobs to stock prices. But if things get too hot, you get rapid inflation which can mess up the system.
3: Inflation has Made Life Harder for Americans (and the President Can Magically Reverse it)
This line of reasoning is even dumber than the last one. For a couple of years after the Covid era, we had rapid inflation. It was caused by a rare combination of a goods shortage caused by things like factory closures and remote work, plentiful demand from government stimulus spending and low interest rates. These factors have since ironed themselves out, and inflation is back down to an ultra-low 2.4%.
But most significantly, wages have still risen faster than inflation so we are all better off than before! Since 2019, overall prices are up 19% and our wages are up 21%. So even after all that inflation, we are still doing just fine. But the candidates are still bickering over inflation as if it’s an actual problem, and even worse promising to “bring prices back down”. And they’ve managed to convince the electorate that “higher wages and prices” is the same thing as “a bad economy”. Which is just plain wrong.
Bonus dumbness: politicians also occasionally blame “greedy corporations” for increasing prices to hoard profits. While price increases are totally acceptable in a market system (as a business owner you are free to set prices wherever you like), in reality it doesn’t usually happen because our markets are too competitive. For example, a recent deep analysis from NPR showed that no, grocery stores haven’t made any windfall profit at all off of this recent bout of Covid-fueled inflation.
4: The President Controls Housing Prices
One important thing that has changed over the past ten years is that US house prices and rents have both risen much faster than general inflation and even wages. On the positive side, interest rates have also risen which tends to make houses feel more expensive and is supposed to help bring house prices down. But it hasn’t happened yet which means we have the double whammy of higher prices and higher interest costs for mortgage borrowers.
The dumb part is that our candidates are proposing things that would make the problem even worse, like subsidies for first-time homebuyers or schemes to reduce the interest rates. When really the solution is to increase the supply of housing, which I personally think will happen if we stop putting up roadblocks for homebuilders (myself included) to build housing.
Things like faster and cheaper permits, less onerous and expensive building codes, eliminating suburban-style zoning and setback and car parking rules, and changing laws so that NIMBYs no longer get any say over what other people do with their own land could all help reduce the cost of building a house by about 50%, quickly and permanently.
5: The President Controls Gas Prices, and They Are Currently “High” and We Want Them Lower
Ahh, gasoline! The most ridiculous of things to worry about and the fuel for many of MMM’s rants since 2011.
First of all, on an inflation-adjusted basis, gasoline is still about the same price as it was in 1950: in the $3-4 range per gallon, in today’s dollars.
Secondly, it is so cheap that even with our huge inefficient American vehicles, the average household is still only spending 2.5% of their disposable income on the stuff! (The funny part is that they spend many times more on the rest of the car ownership experience while thinking gas is the part that is expensive)
Third, gasoline has been obsolete for almost a decade now. You can get a used electric car for less than the price of a comparable used gas car, or if you’re a fancypants money waster like me, new EVs are also cheaper than their gas counterparts. You get a faster, nicer car that almost never needs maintenance OR gasoline, and save money.
So why are we even still talking about this antique fuel of a previous era? Why aren’t the candidates also arguing over the price of Kodak film or typewriters or fax machines?
6: The Economy is Something We Should Even Worry About
The funniest part about all this economic talk is that we’re focusing on the wrong thing. While hard work and business and advancing the frontiers of human knowledge are all fun things, the reality is that we passed the point of having “Enough” decades ago. When the American middle class complains about how hard we have it these days, it’s like a bunch of overfed people at a buffet wishing they could just have one more flavor of donuts stacked onto the table.
Yes, we have income and wealth inequality so that the rich tend to get richer more quickly. And yes, we should keep that in check with a somewhat progressive tax system because a more equal society tends to be a more peaceful and happy one.
But have you noticed that as the rich people get richer, they don’t get any happier? It’s because after you pass the point of “Enough”, adding more money doesn’t really help much.
And “Enough” is much more defined by your mindset (and your collection of life skills) than your paycheck. So if the politicians really cared about improving our happiness and wellbeing, they’d be preaching the Principles of Mustachianism rather than pandering to the specific requests of coal miners or billionaires.
But alas, winning an election is a very different thing than proposing stuff that is actually best for the country. And for that reason, we cast our votes for the best party and then tune back out until the next election.
Happy voting!
In the Comments: Has the election season been getting you down, pumping you up, or just giving you a thorough dose of “Meh”?
Further Reading/Watching:
While researching economic stats for this article, I came across a quirky but informative series of videos called USA Facts by none other than Microsoft co-founder Steve Ballmer. It seems that he had the same frustration as me: Americans are fighting over a bunch of opinions and misinformation without even bothering to look up the actual facts. So he made a well-produced series of videos that just share the facts without the baggage of political hype on top of them. I wish our politicians could do the same thing!
Bonus Podcast based on this article! Thanks to the magic of AI, you can direct the wizardry within Google to generate a custom-made podcast on almost anything on the Internet. A reader just emailed me this take on this episode – remarkably human-like and even entertaining! https://notebooklm.google.com/notebook/0e1d0af8-8888-466c-abe4-8b1da8986773/audio
Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode:
Learn how presidential policies on tariffs, immigration, and prices can impact your everyday expenses like groceries and gas.
What can a president actually do to lower prices and fight inflation? Can campaign promises really impact your wallet, or are they just political hot air? Hosts Sean Pyles and Anna Helhoski discuss presidential policies and how they affect everything from the cost of gas to your grocery bill to help you understand the real impact of political decisions on your finances. They begin with a discussion of inflation, with tips and tricks on understanding how inflation is measured, what drives price hikes, and what role the president plays in influencing it.
Then, Anna talks to Derek Stimel, an associate professor of teaching economics at UC Davis, about the economic implications of tariffs and immigration policies. They discuss how tariffs raise the price of imported goods, how immigration impacts labor costs and wages, and what these political policies mean for your everyday purchases.
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Episode transcript
This transcript was generated from podcast audio by an AI tool.
Sean Pyles:
What’s the first thing you do when you go to the grocery store? Do you run to the produce aisle and look for the freshest broccoli, maybe? Or conversely, are you heading for the candy section? I don’t judge. But pretty soon after that, you’re probably starting to look at prices, right? The price of, well, everything is a daily question in our lives. So it’s not surprising that prices are playing a part in this year’s presidential election.
Derek Stimel:
I just find it interesting that both presidential candidates have focused on these highly volatile markets, which we often think they really can’t do that much about, and that are often driven by these global forces basically. But both of them have focused on those as their avenues to bringing inflation down.
Sean Pyles:
Welcome to NerdWallet’s Smart Money Podcast. I’m Sean Pyles.
Anna Helhoski:
And I’m Anna Helhoski.
Sean Pyles:
And this is episode two of our Nerdy deep dive into presidential policy and personal finances. Hey Anna, I don’t know if you’ve noticed, but we’ve got a presidential campaign underway.
Anna Helhoski:
Hard to miss it. Talk about drama. And every great drama has a storyline. One big part of this year’s storyline in the campaign has been prices, specifically inflation and what it’s done to our bottom lines.
Sean Pyles:
Yeah. Inflation hit a high of 9.1% back in 2022, and we’ve been paying a whole lot more for a lot of things over the last few years. And it’s not subtle, it’s very noticeable. Anna, is there anything specific that has popped up on your radar as more expensive than just a couple of years ago? Something where you said whoa, that is way more than I used to pay.
Anna Helhoski:
Yeah. So I have a bread place near me and a few years ago the prices were pretty reasonable for a big loaf of fresh bread, like $6 a loaf.
Sean Pyles:
Yeah, that’s like New York reasonable, I’ll say.
Anna Helhoski:
Yeah, exactly. No, that’s how I gauge everything. But then flour prices spiked and suddenly the price went up to nearly $10, which is way more than I’m willing to pay. What about you, Sean? Did gecko food get more expensive along with anything else?
Sean Pyles:
Since you mentioned it, crickets for my gecko Ozzy did go up about 12%. I now spend a whopping $2.25 a week for those creepy bugs for the old guy. Of course, it’s not just these one-off items, these are just the things that the two of us noticed in spades. Houses are more expensive, cars are more expensive, credit cards are more expensive. It just takes more out of your budget to buy stuff.
Anna Helhoski:
So what can a president do about it? As we heard in last week’s episode, the answer is not a lot by themselves. They often need Congress or the Fed or both, and sometimes a lot of luck to have an impact on the economy and specifically on prices. But that doesn’t stop them from making all kinds of promises about the changes they’d make if we sent them to or back to the White House. Let’s talk about what they can do in reality.
Sean Pyles:
And as we noted in the last episode, we’re not here to take sides or fan the flames of an already contentious political season. Our goal here is the same one we always have at NerdWallet, to help you, our listeners, make smart informed decisions about the stuff that impacts your finances. Sometimes that means choosing a new high-yield savings account. Other times that means voting for the candidate who you believe will help you achieve your life and financial goals.
All right, well, we want to hear what you think too, listeners. To share your thoughts around the election and your personal finances, leave us a voicemail or text the Nerd hotline at 901-730-6373. That’s 901-730-N-E-R-D. Or email a voice memo to [email protected]. So Anna, who are we hearing from today?
Anna Helhoski:
We’re talking with Derek Stimel. He’s an associate professor of teaching economics at the University of California, Davis. So not only is he an expert in macroeconomics, but he’s an expert in teaching it. He’ll help us parse what presidents can and can’t do to affect the price of all sorts of goods that we all buy. Derek Stimel, welcome to the show.
Derek Stimel:
Thanks for having me.
Anna Helhoski:
Presidential administrations tend to take the credit or get the blame for things that happen, at least when it comes to public perception. That means that the Biden-Harris administration has taken a lot of flak from the Republican Party and from many Americans for elevated prices that we’re seeing in the wake of the pandemic. And since we are just a few months away from a new administration, can you talk a little bit about how much influence presidents actually have on inflation and prices?
Derek Stimel:
Normally we don’t think of them as the major driver of inflation in the economy. Usually, it’s things like monetary policy, so interest rates, and the supply of money. Sometimes it can also be things outside of the economy, shocks as we sometimes say in economics. So things that happen globally, for example. Having said that, it’s not to say that there can’t be some causes that are driven by policy of the government. For example, in the current situation, some people do point to some government spending that took place in the aftermath of COVID and the policies surrounding that. That might’ve been some fuel for inflation. But it’s not usually the first thing we think of. In this particular situation of our recent inflation, I suspect it’s not the first number one thing causing the inflation.
Anna Helhoski:
Let’s get into some of the campaign promises that each candidate has made. Some of the promises might just be politicking, but some of it could become a reality. Start off with former President Donald Trump’s proposals. Thus far, there have been multiple reports and assessments from economists who say that his proposals, if enacted, would be inflationary. And one of the main drivers of that projected inflation is Trump’s promise to levy 10% across-the-board tariffs on all foreign goods. Can you explain how tariffs and prices interact?
Derek Stimel:
Tariffs are basically a tax on imported goods. For any tax, it’s going to have the following effects on the market, which is, the tax gets levied, let’s just say it’s the 10% just to have a number. And then the businesses basically have to, in a sense, make a decision about do we absorb this tax ourselves, do we pass it on to the customers, and if so, in what proportion? They may not pass on the full 10%, it’s unlikely they’re going to absorb the full 10% themselves. So there’s going to be a split. So in some loose setting, maybe they raise prices by 5% and they absorb 5% of it to get up to the 10, or maybe it’s 8 and 2, or 3 and 7, or what may be. But the point is that basically, it’s going to lead to higher prices on those products.
So in this particular situation, we’re talking about higher prices for imported goods. And I think as we’re all generally aware from our day-to-day shopping and if we ever look at the label of anything, we buy a lot of imported goods in the United States. So it’s not unreasonable to think that raising taxes essentially on imported goods would ultimately boost the prices of those imported goods and then on average raise our cost of living at least somewhat.
Anna Helhoski:
Now, Trump claims that his tariffs would spur American manufacturing and domestic competition for production. Is that something that does happen or would likely happen as a result of tariffs?
Derek Stimel:
So it definitely can happen that there could be some… you know, businesses have to make the best decisions based on the rules of the game as they are. Raising tariffs would definitely change the rules and businesses would likely respond to that. And so to the extent that they could and that the U.S. was a major market to them, at least some businesses would try to reallocate or relocate back into the U.S. in order to avoid this tariff, basically. But I think the question is: Would that be enough to counterbalance the effect of this higher tax across the board? I don’t have hard data on it, but the likely answer is it wouldn’t be enough. So we would still see higher prices as a result, and so we would have to deal with the consequences. But there could be some reallocation or relocation of businesses for sure.
Anna Helhoski:
Another promise Trump has made is to lower gas prices. Under his first administration, he increased oil production and then Biden went further still. So how much can a president impact gas prices?
Derek Stimel:
The gas market or the market for energy more broadly defined is very much a global market, but the U.S. is in a way in a unique position of being the center of that global market. You hear a lot about that the U.S. dollar is this global reserve currency. Oil for example is usually traded in dollars and that sort of thing. So we do have a little bit more power than some other countries. The answer would be maybe a bit different if it was us talking about Canada doing something or whatever. It is also probably true that gas prices or prices of energy in general are really often driven by these global shocks. So in this particular case, the disruptions that took place due to Russia’s invasion of Ukraine are really the prime mover probably of energy prices in the recent years. And it’s not clear that any president would be able to have done something about that directly. Obviously, it’s more of a geopolitical thing than an economic policy thing.
Anna Helhoski:
Switching gears again, I’m hoping you can talk a little about the connection between immigration and the prices that consumers pay for certain everyday goods and services. And note for listeners, as you may know, Trump has promised to use law enforcement and the National Guard to deport many millions of undocumented immigrants. Beyond the humanitarian implications and the logistical questions raised by this proposal, what are some of the economic implications?
Derek Stimel:
Kind of a classic way of thinking about it economically, especially when we’re talking about things like inflation, is that we think that business costs basically would drive a lot of inflation, or at least it could be a prime driver of inflation. And inside those business costs, labor costs are often a large portion of those costs. And of course, that has to do a lot with the supply of labor that’s available relative to the demand for that labor. And so we live in an aging society, the baby boomers are basically retiring. And of course, this is reducing our labor supply or at least likely to reduce our labor supply in the coming years. So what that would mean economically is that would tend to push up wages all else the same, which of course then could also push up prices. Businesses, when they face these increased labor costs, have to make a choice about how much to pass on to customers in terms of higher prices.
So with that all in mind, if you also cut off the amount of immigration into the economy, you would think that that’s likely to put further pressure on wages in the economy. It’s going to further, in a sense, reduce or at least not provide any extra slack for the supply of labor, and so that’s going to further push up wages and further push up prices overall. That’s not to say we shouldn’t think about reforming immigration in some way, shape, or form, but that’s just to say economically that if you reduce the supply of labor, the price of that labor, the wages, and all the other forms of compensation that come with it is going to go up and businesses are going to pass at least some of that on to customers in the form of higher prices.
Anna Helhoski:
And are there any specific areas of the economy that could be altered if you deport millions of people who were already in the workforce?
Derek Stimel:
There’s the initial disruption, uncertainty that would surround it, which could shake out in all sorts of ways, many of which are probably not positive. Imagine the local restaurant down the street suddenly loses half its staff. And what are they going to do? So we would expect a lot of service sector jobs to maybe be impacted by these sorts of things, a lot of things that we interact with daily. And then there’s also this issue about if you create shortages in one area, let’s say you create a shortage in one service sector, it could spill over to other unrelated service sectors as well. Maybe now the one sector has to basically go poach employees from the other one. And so maybe it starts to spill over into other areas where you wouldn’t think of, say, quote, unquote, “illegal immigrants” basically playing a role, but it actually could have this cascade to other markets.
Anna Helhoski:
More of our interview in a moment. Stay with us. I want to talk about Donald Trump’s proposal to weaken the power of the Federal Reserve by bringing the central bank under more direct control of the president. And listeners, we’ve said it before, but the Federal Reserve is nonpartisan and operates independently. That means that the president doesn’t tell the Fed what to do and the Fed doesn’t make its decisions based on politics. Derek, it seems like the separation is pretty crucial to ensuring public trust in the central bank’s ability to make decisions. But if Trump was successful in his plans to more directly influence the Fed’s activities, what are some of those economic implications?
Derek Stimel:
Stepping back for a second, we generally think that the Fed’s main role is to keep inflation, especially over the longer term, relatively low and stable. And one element that tends to be critical to that is their basically credibility to commit to that policy of keeping inflation low and doing what it takes. None of us liked in the recent years the interest rates going up, but it’s seen as this necessary thing to do to bring inflation back down to that longer-term goal. And so the concern basically is that a lot of that comes from the fact that the Fed is independent to some degree from the rest of the government. It’s important to understand that they’re not completely independent. The president plays a role in nominating people to serve in the Fed. Congress obviously has to approve these things. But this general separation of like, oh, you can’t tell us when to change interest rates or you can’t tell us we can’t do this policy and we have to do some other policy or whatever, that tends to be important as this inflation fighter credibility that the Fed has.
If that gets eroded, I think the concern would be basically that people in the economy start to not believe in the Fed as much as an inflation fighter. That lack of credibility starts to make people think, “Well, they say they want 2% inflation, but given that they’re tied to the rest of the government, I think it’s maybe going to be more like two and a half, 3%.” So expectations start to tick up on inflation. And one thing about inflation is that expectations really play an important role and they tend to be self-fulfilling. We all expect five, we’ll get five. And so basically the Fed’s independence is one of… There’s some others of course, but it’s one of the main things that’s tying down those expectations because it’s helping the Fed maintain its credibility to be there when we need them to fight inflation.
Anna Helhoski:
Well, those are the main things I want to talk about in terms of Donald Trump, but I want to switch gears and talk about Vice President Kamala Harris’s plans to battle inflation. She recently unveiled a plan to ban price gouging. So first off, what is price gouging and how have we seen it happen?
Derek Stimel:
So in economics, price gouging doesn’t really have a specific definition, to be honest with you, but the loose idea is that it’s taking, quote, unquote, for lack of a better term, “unfair advantage of a situation in order to raise prices.” Sometimes these situations are obvious, which are… There’s an earthquake that happens, let’s say, so suddenly the price of gas and water in the surrounding area is going to skyrocket. That kind of idea of taking advantage of other people’s misery and something that was really out of their control, a natural disaster, that’s really what we see as price gouging. So in this particular context, what we’re talking about with Vice President Harris is this view where, say, for example, grocery stores taking advantage of the circumstances to basically raise prices on their products in an unfair way. But it’s a bit nebulous once you start to get away from things that I think we all would agree are clearly things out of our control, like natural disasters.
Anna Helhoski:
And is there anything already in place to prevent price gouging?
Derek Stimel:
So states generally have laws that prevent price gouging in the situations we’re talking about like natural disasters, so hurricanes and floods and earthquakes, and so forth. What Vice President Harris is really talking about is basically a federal ban across the board on all forms of price gouging. At least that’s what I understand it to be. And we don’t have that. It’s not really clear what the criteria would be for that as well. So for example, if a company raises prices on its products by 5%, how do we decide if that’s just normal market forces or is it price gouging in some ways? In other words, how do we decide the fairness of it all? Generally speaking, in our economy, we let the markets work that out, and then everybody individually makes a decision about, nope, that’s too expensive, I’m not going to buy it, or I guess I’m willing to pay that price, that kind of thing.
Anna Helhoski:
So some critics of Harris’s proposal, including Donald Trump have said that this is a price control. So what is a price control? Why don’t economists like price controls and would Harris’s proposal to ban price gouging actually be a price control?
Derek Stimel:
Basically, a price control is essentially the government setting a maximum price in a marketplace. So sort of saying, “Hey, you can charge no more than X for this product.” And of course, we have price controls in the economy. The ones that people typically talk about classically are certain cities that have rent control. What people are basically saying is that this price gouging idea would in a way limit how much businesses can raise prices. And that would in a way be similar to what happens in a price control situation where the government often does cap how much a business can raise prices.
The good and bad of economics a lot of times is that there’s tradeoffs for everything. Concern would be basically that maybe grocery stores, because that’s the one that’s been central to all this argument, has really been the price of food, is that basically, maybe you wouldn’t see as many new grocery stores opening up, or at least in a lower frequency. Maybe you would start to see the quality of what’s on the shelves in the grocery stores start to decline a little bit. So on the one hand, you get the prices of the things you buy don’t go up as much maybe, but on the other hand, there’s less of them available and at least for some of them, maybe the quality of those products might go down a little bit.
Anna Helhoski:
So beyond preventing price gouging, Harris has also vowed to lower prescription drug prices and she wants to do this with price caps by allowing Medicare to negotiate prices, speeding up delivery of generic drugs, and cracking down on big pharma. So how impactful could some of these efforts be in terms of making prescription drug prices more affordable?
Derek Stimel:
Oh, it could. Not surprisingly, the federal government via Medicare is a huge consumer in this marketplace, which basically means they have a lot of power, market power we would call. In this particular case, the technical term is monopsony power. But basically, yeah, they would have a lot of power potentially to negotiate and there would be spillover effects for people who don’t have Medicare. In terms of being able to lower, say, prescription drug prices by allowing Medicare to do this giant negotiation basically with the big pharma companies, that honestly could have a big impact on those prices for sure, because Medicare is so huge.
Anna Helhoski:
Right. And you touched on housing earlier, but let’s talk a little bit about Harris’s big proposals with her plans to make housing more affordable. One that really stuck out to me is a plan to prevent corporate landlords from using price-fixing algorithms.
Derek Stimel:
This is a brave new world that we’re in, and there’s a lot of times where regulation is behind the technology, where basically a lot of these businesses… And it’s of course not just in real estate, it’s in a lot of other areas as well, in finance in particular, where they basically use these computerized algorithms to essentially search for the deals that they want to transact. Is it price-fixing or is it the fact that all of these algorithms basically tend to point in the same direction because they often use the same data in order to churn through all their calculations? It’s not clear to me, I guess, how that might be enacted and then also what the implications would be.
Anna Helhoski:
And Harris said she would support construction of 3 million new housing units in the next four years, among other plans. And fundamentally, in order to lower housing prices or rent or the supply of homes for purchase, we just need more housing. So could Harris’s proposals spur more construction? And also what can a president do to facilitate housing growth?
Derek Stimel:
So much of this is local. I mean, so much of this is red tape based on local housing boards and all these other types of things, the “not in my backyard” kind of stuff. And so it’s not really clear what anybody at a national level could really do about that kind of stuff because so much of it is all of the local political machines and so forth that basically drive all these policies. As a general idea, I think the basic point that, yes, the way you have to basically lower housing prices or at least keep them from going up as much is to supply more housing, is definitely the answer. Because the housing market in a sense is unique compared to other markets, in that the supply is basically fixed by the number of units and very, what we would say in economics, inelastic. You’re not going to really get around that unless you just simply build more.
Anna Helhoski:
Derek, are there any other proposals from either of the candidates that we’re overlooking that could contribute to lowering prices or to increasing inflation?
Derek Stimel:
I think the last thing I would mention, I guess. I know President Trump wants to increase the domestic production of natural gas and coal and all that sort of thing. And I do find it interesting that both Vice President Harris and President Trump have focused on these areas of inflation. In the case of former President Trump, it’s energy costs, and in the case of Vice President Harris, it’s basically food costs. And these are the things that are specifically excluded by the Fed when they’re looking at the longer-term measures of inflation. So I just find it interesting that both presidential candidates have focused on these highly volatile markets, which we often think they really can’t do that much about, and that are often driven by these global forces, basically. But both of them have focused on those as their avenues to bringing inflation down.
I think the very last thing I might add in, which is probably too big to really get into, is the extent that the deficit and the national debt might play in terms of inflation in other parts of the economy, especially going forward as it’s ballooned a lot. There are some theories out there, for example, that it does play a role in inflation and to the extent that the policies of the two candidates might add to the deficit, and of course, then by extension add to the debt. That could be in a way a hidden inflation factor that we tend to not focus so much on.
Anna Helhoski:
And one we’ll probably pay for in the future.
Derek Stimel:
Yeah, somebody will eventually.
Anna Helhoski:
Derek Stimel, thank you so much for joining us today.
Derek Stimel:
Yeah, absolutely. Thank you so much for having me.
Anna Helhoski:
Sean, there’s something else I want to point out that I didn’t get to in my conversation with Derek, but came from researching an article on this topic, and that’s price tolerance. Right now, people are still pretty price intolerant because so much is elevated from where we remember it being. But if prices actually did drop across the board, it would be a big problem. Economy-wide price drops really only happen when there’s a big recession. And I think Trump and Harris’s campaigns both know this. They can’t bring back pre-pandemic prices, so what they can do strategically is make promises that are most relevant to people.
Sean Pyles:
Right. And last week we talked about how one individual president can’t really transform the economy on their own. But your conversation with Derek Stimel illustrates how a president’s priorities can make a bigger impact on an issue-by-issue basis. Former President Trump is focused on lowering the price of gas. Vice President Harris wants to make housing more affordable. And we saw how President Biden was able to push for lower prices on certain drugs like insulin. Although we should note, of course, that Biden wasn’t able to do that without the help of Congress.
Anna Helhoski:
So Sean, one other thing. Maybe it’s obvious but it’s worth saying, is that while we have pointed to a lot of ways in which a president cannot really control things like pricing, the president is also the leader of his or her respective political party, and that often means that the party and its political leaders will coalesce around these policies, making them more viable.
Sean Pyles:
Yep. We’ve mentioned that the president often has to work with Congress to get bills passed that can fulfill their promises. And members of their party, while they don’t necessarily march in lockstep, they will frequently work with that president to pursue his or her economic agenda. So no, the president can’t wave a magic wand, but if their party also has control in Congress, that makes a world of difference in the ability to make those goals happen.
Anna Helhoski:
And that’s a case for making sure you’re paying attention to what candidates are saying up and down the ballot. The presidential candidates aren’t the only ones to make a difference. Do some research on your congressional candidates, and for that matter, city council and school district, because they all touch public money and that’s your money. It always helps to educate yourself on how they plan to spend it. You can find the latest money news updates in NerdWallet’s financial news hub, which we’ll link to in the show notes, or just search online for NerdWallet financial news.
Sean Pyles:
So Anna, tell us what’s coming up in episode three of the series.
Anna Helhoski:
Well, Sean, next time we’re using a word nobody likes but matters a lot to your finances: taxes. We’ll hear what the current candidates for the highest office in the land want to do with the money that comes out of your paycheck.
Amy Hanauer:
Two-thirds of the cost of making those individual tax cuts permanent would go to the richest fifth of Americans. So to the richest 20% of Americans. So just for a sense of what that will cost, in 2026 alone, that will cost more than $280 billion.
Anna Helhoski:
For now, that’s all we have for this episode. Do you have a money question of your own? Turn to the Nerds and call or text us your questions at 901-730-6373. That’s 901-730-N-E-R-D. You can also email us at [email protected]. And remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.
Sean Pyles:
This episode was produced by Tess Vigeland and Anna. I helped with editing. Rick VanderKnyff and Amanda Derengowski helped with fact-checking. Megan Maurer mixed our audio. And a big thank you to NerdWallet’s editors for all their help.
Anna Helhoski:
And here’s our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.
Sean Pyles:
And with that said, until next time, turn to the Nerds.