There are many common mistakes that newly married couples make, but these are (in my opinion) the top 5 financial mistakes:
Spending too much on the wedding: This is perhaps the biggest financially related mistake that couples can make. Having an extravagant wedding may seem like a good decision in the moment, but it will really make a dent in the bank account later! The things that cost the most when hosting a wedding are the venue, the catering/food, the wedding dress, and decorations.
Dating too often: Dating is a good thing, but too much of a good thing is still too much! Taking your partner out for a date once in a while is a good idea, but doing it too often will result in a large expense. To cut costs, sometimes you could have a stay at home date instead! Watching a movie at home with homemade popcorn or playing board games are two ideas.
Buying an expensive car/house: This is another big one that can potentially cause major problems. Don’t buy an expensive car or house just to impress your spouse, and don’t buy anything without talking to them first!
Not creating a budget: Creating a budget is an important step towards managing money more efficiently. Not creating a budget will lead to problems and disagreements with your spouse.
Not having an emergency fund: Having an emergency fun is very important, because you want to be prepared for any emergencies that may come up. If you do not have an emergency fund, you will be totally unprepared for emergencies.
In my opinion, these are the top 5 financial mistakes newly married couples can make. I hope that this article will help you avoid making these mistakes.
In this assignment, I will be explaining what the Federal Reserve is and what it does to the economy.
The Federal Reserve
The Federal Reserve is the central bank of the U.S. In short, it is a super bank that connects all banks together. It is closely tied to the U.S. government. It was originally created to allow banks to extend more loans without having to worry about the consequences.
The Federal Reserve (often shortened to Fed) has many functions. It primarily controls the money supply, but it also issues new currency, serves as a last-resort lender, and is a bank for the government. The Fed can also collect data and do economic research.
The Fed was created by the Federal Reserve Act of 1913. Just a few years earlier, the nation had experienced the Panic of 1907, when many banks failed and the stock markets crashed. This scared a lot of people, eventually leading to the creation of the Federal Reserve.
One common misconception that some people have about the Fed is that it is a part of the government. Although the Fed is closely tied to the government, it is not technically a part or branch of the government.
The Federal Reserve impacts our economy by making policies and giving bailouts to banks. Some of these policies can restrict the economy, and are not helpful. The Fed can also increase the amount of money in circulation, although they don’t directly print it.
This unemployment rate graph suggests that the unemployment rate is much higher than the government is trying to make people think. The red line is the official unemployment rate according to the government. The blue line is the ShadowStats alternative unemployment rate. You can see that it is a lot higher than the “official” unemployment rate. If you look at the graph, you can see several spikes that mark recessions, with the big spike near the right side of the graph being the COVID recession. Having a 25% unemployment rate is not at all great for the economy!
This chart shows the GDP annual growth in the U.S. GDP stands for Gross Domestic Product, which is the total value of all the goods and services that our country produces. (Note that this is the measure of the percent change in GDP, not total GDP). In this graph the official GDP shows as being fairly high, and only going below 0% a few times. The ShadowStats alternative tells a different story! It shows that the GDP is actually a lot lower, and has dipped below 0% quite a few times, which means that our country had actually been losing value during those times!
The inflation rate is another marker of economic health. This chart only goes up to mid-2023, but currently the official inflation rate is around 3%. That doesn’t sound very high, but according to ShadowStats, it is a lot higher! An interesting thing to note on the graph is that while the official inflation rate goes below 05 a few times, the ShadowStats alternate inflation rate never does! In fact, its lowest was just under 2%. You may be wondering why inflation is bad, so I’ll explain it in a simple example.
Imagine an economy where the total money supply is $100, and you own 10 of those. You would own 10% of all the money, making you very wealthy! Now imagine the government of this fictional economy printing $900. This would bring the total money supply to $1000, and you still own 10 of them. But now you have only 1% of the money supply! It is even more hurtful to the less wealthy people! In our economy, the government can print out money anytime (and in fact all the time), which is constantly making our money worth less and less. Inflation is only helpful for the government, and only during the short run.
Tariffs
I don’t have a graph for this one, but I’ll start by explaining what tariffs are and how they impact our economy. Tariffs are basically taxes on other countries. If you set a 25% tariff on all goods from Mexico, for example, then all the people who bring avocados from Mexico to the U.S. must pay 25% of the price they are selling them for to the U.S. government. This forces the people who are selling avocados to increase their prices so they can make a profit, which makes us pay higher prices for our avocados.
Currently, many tariffs are being imposed on other countries, which is probably going to make stuff a lot more expensive!
Conclusion
According to the reasons I have mentioned, the U.S. economy is not doing great. We are having high inflation rates, high unemployment, many tariffs, and low GDP. I sure hope our economy will be able to recover from this!
In this assignment, I will be breaking down how I would invest $2000 if someone gave it to me and had to keep it invested for at least 5 years. Then, I will explain why I picked my investments.
If I was given $2000, I would make sure to diversify my investments. Here is what I would invest in. The number is how much of the $2000 I would invest in that particular thing.
I would invest the majority in Bitcoin, because it is scarce (there will only ever be 21,000,000 bitcoin) and in high demand. The demand will most likely keep increasing as more and more people realize that it is one of the best and most powerful currencies out there. It is also decentralized, meaning that no one person or government makes the rules about bitcoin. I would also invest in gold, which is also very scarce and in very high demand. The S&P 500 is another thing I would invest in. This will help to diversify my investing portfolio. It is also fairly inexpensive, and less risky than buying single stocks, which I had considered.
Thanks for reading!
Also, if you are interested in bitcoin or want to learn more about it, here are some resources:
In this assignment, I will be giving 5 tips of investing advice. (Note: I am not by any means an investment professional, this is a required school assignment!)
Top 5 Investing Tips
Diversify: This is one of the most important things to do when investing in anything. If you invest only in one stock and that stock drops, you would lose a lot of money! Diversification helps minimize your losses and maximize your gains.
Use index funds: Index funds are an easy way to diversify, and they can help reduce transaction fees. It is less expensive to buy index funds than each of the individual stocks.
Research: Things will change over time, so investment advice given years ago may not be as relevant today. Make sure you do your research so you know what you are getting into.
Pay attention to your investments: This seems obvious, but make sure you are regularly checking on your investments to see how they are doing. If you need to, you can sell off or buy more assets.
Make an emergency fund: A very important one! Set aside some cash or easily exchangeable assets, so that you have extra funds for an emergency. Make sure they are easily exchangeable, you don’t want to have real estate as your emergency fund!
These are my top 5 investing tips. I didn’t recommend specific stocks or investments, that is up to you! Personally, I would invest in bitcoin, gold and other precious metals, and stocks or index funds.
If you have any other tips you would like to add, please comment below.
