Wednesday’s need-to-know money news

Today’s top story: Here’s which airline rewards program gives the most value. Also in the news: The most valuable hotel rewards program in 2022, 5 steps to strengthen your finances, and despite higher wages, inflation gave the average worker a 2.4% pay cut last year.

Here’s Which Airline Rewards Program Gives the Most Value
Alaska, Frontier and Southwest lead the way on cash value per mile.

The Most Valuable Hotel Rewards Programs in 2022
Radisson Rewards America and World of Hyatt lead the way on key measures of value.

5 Steps to Strengthen Your Finances in 2022
In 2022, setting grand financial goals may not be realistic for every budget, but there are still smart steps you can take to shore up your finances.

Despite higher wages, inflation gave the average worker a 2.4% pay cut last year
Inflation grew 7% in December from a year earlier, the U.S. Department of Labor said Wednesday.

Q&A: It’s easy to squander a windfall. How to make the money work for you

Dear Liz: I’m receiving a $150,000 inheritance soon. After I pay all of my debt, I’ll have approximately $70,000. I’m 51, single with no children and my net income is about $4,400 a month. I’ve rarely been wise or successful with my finances. I have no prior savings, don’t own a home and drive a five-year-old car. Do you have any thoughts for the remaining funds?

Answer: It’s never too late to get better with money. Now would be a great time to examine why you got into debt and what you need to change so that doesn’t happen again.

Windfalls tend to disappear pretty quickly, and it would be a shame if you found yourself back in debt in a few years with nothing to show for your inheritance.

Nonprofit credit counseling agencies affiliated with the National Foundation for Credit Counseling (www.nfcc.org) usually offer help with budgeting, or you could book some one-on-one sessions with an accredited financial counselor or accredited financial coach. You can get referrals from the Assn. for Financial Counseling & Planning Education at www.afcpe.org.

Paying off high-rate debt such as credit cards is a great use of a windfall. Think twice about paying off lower-rate debts such as student loans or car loans, however. You probably have better uses for that money.

You likely need to start saving aggressively for retirement.

If you have a 401(k) at work with a match, you should be taking full advantage of that. (You might draw from your inheritance to replace some of the money that’s being directed into your retirement account.)

Otherwise, you can put up to $7,000 into an IRA or Roth IRA — the usual limit is $6,000, but people 50 and older can make an additional $1,000 catch up contribution. You can dedicate even more money for retirement by opening a regular brokerage account and investing through that.

A windfall also can help you create an emergency fund equal to three to six months’ worth of expenses, as well as provide a starter savings account for your next car.

Resist the urge to replace the one you have, though, because with proper maintenance you should be able to drive the one you have for several more years. Buying new cars every few years is hugely expensive and generally unnecessary since today’s cars can easily drive without major problems for 200,000 miles or more, according to J.D. Power & Associates.

Friday’s need-to-know money news

Today’s top story: How to holiday shop at the last minute. Also in the news: 6 ways to save money on holiday travel, 2022 small business outlook, and easy ways to clean up your finances before another year begins.

How to Holiday Shop at the Last Minute
Here’s what to do if you still have gifts left to purchase this month.

6 Ways to Save Money on Holiday Travel
Leverage the perks and advantages provided by travel credit cards to cut costs this season.

Small-Business Outlook: 6 Predictions for 2022
Small businesses can expect more access to capital in 2022.

Easy Ways to Clean Up Your Finances Now, Before Another Year Begins
The lazy person’s guide to starting 2022 with a clean slate.

Thursday’s need-to-know money news

Today’s top story: How to negotiate your way to a richer life. Also in the news: 4 signs we’re in a housing market primed for regret, Medicare and CPAP supplies, and could your health or life insurance rates increase if you’re not vaccinated?

How to Negotiate Your Way to a Richer Life
Learning best practices can help you earn more, get better deals and avoid strife over household finances.

4 Signs We’re in a Housing Market Primed for Regret
It’s a tough time to be a homebuyer.

Does Medicare Pay for CPAP Machines and Supplies?
Medicare Part B covers CPAP, but it requires a sleep test and a trial period.

Will Your Health or Life Insurance Rates Increase If You’re Not Vaccinated?
Insurers have yet to decide.

Tuesday’s need-to-know money news

Today’s top story: How to minimize credit damage from medical bills. Also in the news: Getting started with qualified opportunity funds, how to turn your side-gig into a full-time business, and what to do if you’re about to lose your federal COBRA subsidy.

How to Minimize Credit Damage From Medical Bills
Your credit can recover.

Getting Started With Qualified Opportunity Funds
Qualified opportunity funds allow you to do well for yourself while doing good for others — revitalizing distressed communities while saving on taxes.

5 Steps to Turn Your Side Gig Into a Full-Fledged Business
Formalize your freelance business by separating your business and personal finances and making a business plan.

What to Do If You’re About to Lose Your Federal COBRA Subsidy
Time to look for a cheaper plan.

Thursday’s need-to-know money news

Today’s top story: How to bounce back from an income drop. Also in the news: 5 tips for fostering a successful hybrid workplace, is the Fed to blame for high home prices, and why right now might be the best time to sell your car.

When Your Income Drops, Here’s How to Bounce Back
Recovering from an income drop depends on quickly cutting back expenses while also tackling the emotional stress.

5 Tips for Fostering a Successful Hybrid Workplace
Breaking old office habits and seeking employee input early and often can help create a successful hybrid workplace.

The Property Line: Blame the Fed for High Home Prices?
House prices are skyrocketing for multiple reasons. The Federal Reserve is just one piece of the puzzle.

Why Now Might Be the Best Time to Sell Your Car
Used cars have never been hotter.

4 cash-raising pitfalls (and better options)

If you’ve got more bills than money, the usual advice is to trim expenses and find additional income. But some ways of raising cash can be a lot more expensive than others. In my latest for the Associated Press, four that should be avoided, if possible, and what to consider instead.

Smart strategies to fight back against inflation

Few economists predict we’ll return to the double-digit price increases of the late 1970s and early 1980s. But knowing some of the ways consumers coped back then — and how things are different now — can help you formulate a plan to deal with rising prices.

First, a primer: Inflation shrinks your purchasing power, so you need more money to buy the same goods and services. When inflation averages less than 2%, as it did from 2010 to 2020, it would take more than 35 years for prices to double. When inflation averages 5%, which was the annualized rate reported in May, prices would double in less than 15 years. That is a huge deal if you live on a fixed income or are trying to calculate how much you’ll need in retirement.

In my latest for the Associated Press, strategies that may prove helpful.