One of the most popular budgeting and financial planning apps for iPhone, dubbed Copilot, is expanding to the Mac for the first time. Copilot combines in-depth reporting and personalization to help you budget and track your finances, with “hyper-personalized finance data insights powered by machine learning.”
Copilot works by aggregating all of your different accounts in one place. This includes things like credit cards, checking and savings accounts, loans, and investment data. From there, the app learns from your transaction history and other data points to give you insights into your spending.
Copilot is a beautifully designed home for your finances. It automatically tracks your accounts and helps you navigate your finances throughout the month. It also finds and tracks your subscriptions and bills, notifies you when you get paid, and shows you an end-of-month summary that accurately reflects where your money went and how your net worth changed.
On Copilot everything is customizable, and you can easily train it to better understand your finances. You can also connect your investment accounts to see your holdings and returns.
Using your transaction and spending data, Copilot creates what it calls “realistic budgets” based on that activity. The budgets are automatically created based on that spending data, but you can fine-tune them to your liking and see how you compare every month.
You can use Copilot to monitor all of your accounts, receive push notifications for deposits and unusual spending, and track your financial health over time. The app also helps you track all of your various subscriptions so you know how much you’re paying every month for streaming services, apps, and more.
The Copilot app for the Mac will be familiar to anyone who has used it on the iPhone. There’s a central dashboard view, then a menu along the left-hand side that allows you to dive into specific transaction history, account data, and more.
I’ve been a Copilot user for awhile and rely on it (combined with the Google Sheet I refuse to give up, even though I totally could) to give me a broad overview of my finances on a daily basis. The addition of a Mac is a major upgrade to the Copilot experience, as budgeting and tracking financial data on the iPhone was cumbersome at times.
One thing, however, that I think is important to point out is that everyone has a different way of tracking their financial health. While Copilot works for me, it may not work for you. There are plenty of other budgeting and finance apps on the App Store if that happens to be the case.
Copilot for Mac is a universal and native application, which means performance should be fast and reliable on any Mac, whether it’s Apple Silicon or Intel. You can download it from the Copilot website today. The app costs $8.99 per month or $69.99 per year.
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confirmed Monday it is laying off roughly 3,000 white-collar and contract employees, marking the latest in its efforts to slash costs as it makes a longer-range transition to electric vehicles.
Ford sent an internal email Monday to employees, saying it would begin notifying affected salaried and agency workers this week of the cuts. The email was viewed by The Wall Street Journal.
The 1% reduction in Ford’s workforce of about 183,000 mostly targets employees in the U.S., Canada and India. About 2,000 of the targeted cuts will be salaried jobs at the Dearborn, Mich., auto maker. The remaining 1,000 employees are working in contract positions with outside agencies, the company said.
The cuts weren’t unexpected. The Wall Street Journal and other media outlets reported in July that layoffs were coming for white-collar staff as part of a broader restructuring to sharpen the car company’s focus on electric vehicles and the batteries that power them.
Ford shares closed down 3.9% each on Monday, after news of a $1.7 billion jury verdict in a case involving a rollover accident with one of the company’s F-250 pickup trucks that left two people dead.
The company’s email, signed by Executive Chair
Bill Ford
and Chief Executive
Jim Farley,
said Ford is changing the way it operates and redeploying resources as it embraces new technologies that weren’t previously core to its operations, such as developing advanced software for its vehicles. The job cuts are effective Sept. 1, a spokesman said.
“Building this future requires changing and reshaping virtually all aspects of the way we have operated for more than a century,” the internal message said.
Mr. Farley has said recently that Ford has too many employees, and that the existing workforce doesn’t have the expertise needed to transition to a portfolio of electric, software-laden vehicles.
He has said he aims to cut $3 billion in annual costs by 2026 as part of his goal to reach a 10% pretax profit margin by then, up from 7.3% last year.
Like many global auto makers, Ford is pouring money into electric vehicles in an effort to close the sales gap with
Tesla Inc.
The company has said it would spend about $50 billion through 2026 to develop EVs, targeting global sales of two million by then.
Mr. Farley earlier this year divided the company into separate divisions, including one to focus on electric vehicles and advanced technologies, and another to handle its traditional internal-combustion-vehicle lines.
He has said profits from its lineup of gasoline and diesel-engine vehicles will help fund the transition, but that part of the business must operate more efficiently.
Supply-chain issues and a shift toward electric vehicles have accelerated changes in the car-buying process. We visit a car dealer to see how consumers and sellers are adapting and what changes might be here to stay. Photo: Adam Falk/The Wall Street Journal
U.S. electricity customers are facing some of the largest bills in years because of volatile natural-gas prices, which are being driven higher by winter demand and a global supply shortage being made worse by Russia’s war against Ukraine.
Already, the natural-gas supply crunch has made it substantially more expensive for utilities to purchase or produce electricity. As a result, some customers have seen winter power bills increase by 20% or more compared with the year before, in addition to seeing higher home-heating bills.
Now, with sanctions against Russia threatening to further constrain global natural-gas supplies, higher prices are likely to persist, executives and analysts say, especially in regions heavily reliant on the fuel for power generation.
Domestic natural-gas prices reached the highest levels in years ahead of winter as exporters shipped record amounts of it overseas, and prices have lately risen again on fears of another global shortage.
“It will have an impact on customers’ bills,” said
Nick Akins,
chief executive of
American Electric Power Co.
AEP -0.58%
, a utility company that serves more than five million customers in 11 states.
U.S. Henry Hub gas prices on Friday reached about $4.73 per million British thermal units. That is up from about $2.66 per million British thermal units a year ago.
Utilities across the country recover gas and electricity supply costs by charging them to customers, driving prices sharply higher this winter after a year of steady increases. Average retail electricity prices for residential customers rose 4.3% last year to 13.72 cents per kilowatt-hour, the largest annual increase since 2008, according to the Energy Information Administration. The increase, which generally matched inflation overall, was spurred in part by the cost of natural gas delivered to power plants, which more than doubled from 2020.
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What has your electricity bill been like lately? Join the conversation below.
Utilities must receive regulatory approval to raise rates, but it is generally standard practice for regulators to allow for them to recoup higher fuel and supply costs through customers.
The recent surge in electricity prices has been especially acute in New York.
Consolidated Edison Inc.,
ED 0.20%
which provides electricity to about 3.3 million customers in the New York City region, said city residents using about 300 kilowatt-hours a month saw their January bills increase by roughly 23%. Most of that increase resulted from higher supply costs.
ConEd said it is working to hedge against price volatility and adjusting its billing processes to benefit customers.
Hector Ruiz, 44 years old, a fiber-optic engineer who has lived in his house in Clifton Springs in upstate New York for the past eight years, said he had never paid more than about $500 a month for gas and electricity. His bill last month was just shy of $1,000, he said, scrambling the budget for his family of four and prompting him to tap into funds set aside for other purposes.
Hector Ruiz said his latest bill for gas and electricity was just under $1,000, which is double what he was paying.
Photo:
Malik Rainey for The Wall Street Journal
“My utility bill literally doubled overnight,” Mr. Ruiz said. “Has it been a punch to the gut? Yes.”
Gabriel Thompson, 40, a photographer who lives with his wife in Westchester County just north of New York City, saw his electricity bill rise sharply alongside his gas bill in January. His cost of electricity supply reached 18 cents a kilowatt-hour that month, up from about 6 cents a kilowatt-hour the prior month. Including delivery charges, he paid more than $200 for electricity and about $585 for natural gas.
“It makes me glad I don’t have an electric car, which I’d love to have,” Mr. Thompson said. “People don’t have infinitely expendable income.”
The increases come amid broader concerns about high inflation. The consumer-price index surged 7.9% in February, the highest rate in 40 years.
Gabriel Thompson says higher utility costs make him glad he doesn’t have an electric car.
Photo:
Clark Hodgin for The Wall Street Journal
Eversource Energy,
ES -0.53%
a utility that serves 3.6 million electric and natural-gas customers in Connecticut, Massachusetts and New Hampshire, raised electricity rates at the start of January to account for higher wholesale prices. The company said an average residential customer could see bills increase by as much as 25% through the end of June.
James Daly,
Eversource’s vice president of energy supply, said regional pipeline constraints exacerbated a gas-supply shortage resulting from higher seasonal demand and relatively flat domestic production. The company also saw a surge in prices for liquefied natural gas as exporters shipped more of it abroad, though it doesn’t rely heavily on that type of fuel.
“We can see prices run up faster than in other parts of the country if there’s a supply-demand imbalance,” Mr. Daly said.
Commodity prices are hot right now. But the prices investors are paying in the open market for commodities like coffee, copper or corn can have little to do with the price customers pay at the store. WSJ’s Dion Rabouin explains. Illustration: Adele Morgan
In California, wholesale power prices have risen as the state’s largest utilities plan to invest billions of dollars to reduce the risk of their power lines igniting wildfires. San Diego Gas & Electric, a unit of
Sempra
that serves about 1.5 million electric customers and 900,000 natural-gas customers, raised rates at the start of the year to account for higher supply costs. Average residential bills increased by 11.4%.
Guggenheim analyst Shahriar Pourreza said utilities have long counted on low gas prices to keep supply costs down, giving them greater leeway to invest in their systems without major rate increases. Now, with gas prices likely to remain elevated, companies will face more pressure from regulators to keep spending in check and consumers’ bills lower, Mr. Pourreza said.
“You haven’t seen the same level of inflation in utility bills like you’ve seen in other industries and other products,” he said. “It’s been a subsidy for them, and that subsidy is likely going away.”
The recent surge in electricity prices has been especially acute in New York. A street in Mount Vernon.
Photo:
Clark Hodgin for The Wall Street Journal
Write to Katherine Blunt at Katherine.Blunt@wsj.com
Chase Smith had been saving for her first car long before she had a license to drive. But when the 16-year-old was ready to buy, she saw the prices and hit the brakes.
“It was definitely very frustrating, especially because all my friends have cars,” said Ms. Smith, who was eager to end her one-hour bus trips to school in upstate New York and stop catching rides from her parents. “But in the end, I just know it’s a smart decision,” she said.
Buying a used car, or receiving one from parents, has long been a rite of passage for generations of young drivers in the U.S. Skyrocketing prices and a shortage of preowned inventory are adding new strains to a teen’s initiation into the driving world, prompting some shoppers to delay purchases and others to stretch their budgets.
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Used-car prices were rising before the pandemic hit, but in the past two years, they have consistently hit more records as supply-chain disruptions have slammed the auto industry, leading to a shortage of cars new and used.
The average listing price for a preowned model hit $28,500 in January, a 31% jump over the same prior-year month, according to Cox Automotive. Comparatively, new-vehicle prices rose 12% during that same time frame, the firm’s data shows.
The surge has walloped price-sensitive buyers, especially younger ones, who have reliably turned to the used-vehicle market for more-affordable options, analysts say.
The number of 16-to-25-year-olds purchasing a used vehicle dropped 35% between 2019 and the end of 2021, more than for any other age group, according to data provided by research firm J.D. Power.
Purchases of new cars also have slipped for this age group over the past couple of years, the firm’s data shows.
While Gen Zers had been showing more interest in automobiles before the health crisis, they are now being held back by the rising prices and paltry selection of low-cost vehicles, analysts and industry executives say.
“As an industry, I think there should be some concern,” said Jack Hollis, senior vice president of auto operations at Toyota Motor North America.
Capturing younger buyers, who will be the driving force behind the economy in the next 20 to 40 years, is critical for the car business because it ensures brand loyalty and a future customer base, Mr. Hollis added.
An employee shows a used vehicle to potential buyers in Jersey City, N.J., early in the pandemic.
Photo:
Angus Mordant/Bloomberg News
At current price tags, the average monthly payment on a financed used car was about $540 last month—up 33% from $407 in January 2020 and close to what some consumers would have paid on a new vehicle two years ago, according to Edmunds.
Meanwhile, earnings for teenagers haven’t kept pace. In roughly the same period, the median wage of workers ages 16 to 19 increased 14.6% to about $2,453 a month at the end of last year, according to the Bureau of Labor Statistics.
Even parents, who in many cases assist with the purchase or buy the car outright for their teens, are balking at the higher prices.
Bradley Rose, a father living in Florida, said he was run ragged driving the kids around to events and clubs. He was eager to get a car for his 16-year-old daughter to lighten the load.
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Have you bought or sold a used car this year? Join the conversation below.
He found dealership lots near empty and had trouble finding a vehicle around his $10,000 price limit. A pilot, Mr. Rose said he considered flying cross-country to find a low-cost vehicle, before finding a used 2016 Toyota Corolla LE that had 50,000 miles on it. He said he paid about $19,000 for the car.
“It’s way overpriced, but we wanted her to be happy; we wanted her to be safe,” Mr. Rose said.
For decades, car companies tried to appeal to this demographic by selling cheap, entry-level models, such as compact sedans and hatchbacks. Some, such as
Toyota Motor Corp.
, had youth-oriented brands that offered small cars priced at under $20,000.
In recent years, many brands have dropped their budget models from showrooms, as car manufacturers shifted to selling more higher-priced trucks and SUVs. That trend has left budget-minded buyers, including teens and young adults, turning to used-car offerings, analysts and auto executives say.
Now they are finding the pickings are slim even there.
The availability of used vehicles has grown scarce over the past two years, in part because the typical channels for restocking lots have also faced challenges. Rental-car firms are holding on to their vehicles longer because they can’t secure new ones, and fewer leased cars and trucks have returned to dealerships for resale in the used market.
While preowned inventory levels are starting to bounce back, the supply on dealer lots in December was still down nearly 20% from the same time in 2019, according to Cox Automotive. For those looking for a used car under $10,000, there were only about 8,500 available in the entire U.S. in January, a 34% decrease from April 2021, the firm’s data shows.
The challenges are resulting in disappointment for parents and teens.
Marc Levine, a father of two living in Florida, was hoping to help his 16-year-old son buy his first set of wheels, as he did with his older child. When he saw the elevated prices, he decided to hold off, telling his son that it was risky to buy at the top of the market.
Lettuce Entertain You Enterprises Inc., a Chicago-based restaurant group, has added a 3% “processing fee” to checks at many of its restaurants.
Harley-Davidson Inc.
added a charge last year to its motorcycles to cover rising material costs.
Peloton Interactive Inc.
in January began charging $250 for delivery and setup of some of its indoor bikes, a service that was previously included free.
Companies are finding all kinds of ways to make consumers pay for rising costs. Often that is not reflected in the posted price.
The Labor Department’s consumer-price index, which measures how much consumers pay for goods and services, rose to 7.5% in January compared with the same month a year earlier—the biggest rise since February 1982.
The index accounts for some changes that raise consumers’ costs, such as smaller package sizes and some fees attached to hotel packages or car purchases. But it can miss other ways in which dollars don’t stretch as far– a hotel that changes sheets only between guests, a theme park that cancels its free airport shuttle, or an auto dealer that requires customers to buy a protective paint coating with a car.
With supply-chain challenges, pent-up demand and a tight labor market leading to inflation, businesses are looking for subtle ways to pass along rising costs. Particularly in the food business, companies have long used what the industry calls weight-outs, or shrinking package contents instead of raising prices, during economic distress periods such as the 2007-2009 recession.
“There is a lot more to come,” said
Doug Baker,
head of industry relations for FMI, a food-industry trade organization. “Everything is on the table in an effort to deal with those cost increases, and at the same time, not make it too difficult for consumers to shop.”
A global computer-chip shortage has reduced vehicle inventories just as Americans were buying cars in record numbers, pushing up prices for new vehicles. In many cases, they are selling for thousands of dollars above manufacturers’ suggested retail prices, said Tom McParland, founder of Automatch Consulting, which helps consumers find vehicles.
“They’re calling it a market adjustment fee,” said Mr. McParland. “That’s the new thing they are doing: hiding markups with substantially overpriced accessories like mud flaps and cargo protectors.”
Ford Motor Co.
and
General Motors Co.
have said they are cracking down on dealerships using that tactic.
Harley fees
Base prices on Harley-Davidson’s motorcycles haven’t gone up much in recent years, the Milwaukee company said. But to cover rising costs, it added a mandatory materials surcharge last year, which dealers are passing on to customers. Dealers said the fee, which varies based on the model, is easier for the company to adjust than base motorcycle prices when costs decrease.
Dealers said the fee is $850 to $1,500 a bike. Harley this week told analysts that the surcharges helped boost revenue during the fourth quarter last year.
Harley-Davidson added a fee to its motorcycles to cover rising material costs; a dealership in Louisville, Ky., this week.
Photo:
Luke Sharrett/Bloomberg News
Some restaurants are adding new fees in response to escalating costs for food and packaging, and for wage increases executives say are needed to keep cooks and servers.
Brinker International Inc.’s
Maggiano’s Little Italy in October 2020 started charging $5 for a second, to-go pasta dish offered as part of a two-entree deal. For about a decade before the pandemic, the chain had offered a second classic pasta dish free.
“We’ve had no push back,” Maggiano’s president Steve Provost told investors last October. A Brinker spokeswoman said the price change allowed the company to invest more in the value of its carry-out offerings.
When Michael Pfeifer, a marketing professional, picked up the check for his meal at
RPM
Seafood in Chicago this week, he was surprised to find a 3% Covid surcharge added to the bill. “What’s next?” he said. “A dishware rental fee?”
The fee, added in the spring of 2020, offsets the cost of pandemic-related government regulations and mandates, said RJ Melman, president of Lettuce Entertain You, which owns RPM. “These fees can be removed and refunded for any guest that requests,” he said, “no questions asked.”
Peloton, according to its website, is adding the new $250 fees on bikes and a $350 delivery-and-setup fee for some of its treadmills. It cut the price of its original stationary bike in August to $1,495 from $1,895. With the added fees, the total price is now back up to about $1,745, as the company dealt with slowing demand and its own rising costs.
Peloton declined to comment on the fees. In an earnings call on Tuesday, Peloton CFO
Jill Woodworth
said that the fees could cut into consumer demand but that they were part of a “critical learning” process as the company restructures and cuts costs for the post-pandemic era.
Walt Disney Co.
’s Disney World in Orlando stopped offering free airport shuttles—known as the Magical Express—this year, leaving Disney guests to pay for their own transportation. The parks added several fees last year while keeping the base ticket price at $109. A fast-pass system that let park guests make reservations for rides, which used to be free, was discontinued and replaced by a new system that costs $15. And some popular rides, like Star Wars: Rise of the Resistance and Space Mountain, now cost between $7 and $15, on top of the park admission ticket.
Disney offers “a wide range of options to match different budgets and interests,” said Disney spokesman Avery Maehrer.
At its theme-park restaurants, Disney is trying to avoid across-the-board price increases, Disney CFO
Christine McCarthy
told analysts in November. “We can substitute products. We can cut portion size, which is probably good for some people’s waistlines,” she said. “But we aren’t going to go just straight across and increase prices.”
Consumer backlash
Consumer pressure has led some companies to back off added fees, including
Frontier Group Holdings Inc.
The airline, which uses a la carte pricing that lets frugal travelers choose to forgo amenities, in May 2021 added a $1.59-per-flight-segment Covid-related fee. After consumer backlash, Frontier in June stopped breaking it out as a component of its base fare but it didn’t stop charging it. Frontier didn’t respond to requests for comment.
In a press release it said: “The charge, which was included in the airline’s total promoted fare versus an add-on fee, was meant to provide transparency and delineate what portion of the fare was going toward COVID-related business recovery.”
Some of
Marriott International Inc.’s
Autograph Collection hotels had been charging a “sustainability fee” of about $5 a night. The company that manages the properties, Innkeeper Hospitality Services LLC, says it covered things like more-efficient HVAC systems.
They stopped charging the fee several weeks ago, “because we understand that while we believe in environmentally responsible stewardship, not everyone cares about our planet’s health,” IHS CEO Amrit Gill said. He said Marriott had asked the company to stop charging the fee. Marriott declined to comment.
The Biden administration has begun to look into some forms of hidden fees, which it calls “junk fees.” The administration says the amount being charged is not always tied to the costs faced by the company providing the goods or services. The Consumer Financial Protection Bureau is seeking public input on financial services, such as bank overdraft fees, while the Transportation Department is planning actions on airline baggage fees.
John Fiorello, a father of four in Torrington, Conn., was dismayed to see prices rising in his local grocery-store aisles but was initially pleased to see that the blocks of cheese he usually buys hadn’t gone up much in price—perhaps 10 cents, he said. Then he noticed that the package had shrunk, to 12 ounces from 16.
“I picked up the block and said, ‘this is definitely smaller,’ ” Mr. Fiorello said. “It just adds an extra layer of stress.”
Shrinkflation, as economists call it, tends to be easier for companies to pass on to consumers. Despite labels that show price by weight, research shows that most customers look at only the overall price.
The food industry has long shrunk package contents instead of raising prices during economic-distress periods; a Salt Lake City grocery store in October.
Photo:
George Frey/Bloomberg News
“There are sizes that people remember, like a half gallon of ice cream,” said John Gourville, a Harvard Business School professor. “Once you break from iconic sizes, it’s pretty easy to move from 13 ounces to 12 ounces.”
Over the years, tuna cans have come to contain less tuna and toilet-paper rolls less tissue, said
Burt Flickinger III,
managing director of Strategic Resource Group, a consulting firm that works with consumer-product companies. “Historically,” he said, “it’s called a ‘cheater pack.’ ”
Companies have become more sophisticated and use multiple tactics to protect their profitability, he said. They can pull back on discounts, stop making low-selling products and create new varieties that sell for higher prices
Downsized Oreos
Oreo-maker Mondelez International Inc. raised prices by an average of 6% to 7% in the U.S. last month, but it wasn’t enough to make up for its higher costs, the company said. So Mondelez has been introducing new sizes and flavors it says are more profitable.
Oreo’s new 110th Birthday chocolate confetti-cake cookies cost about 10 cents more than regular Double Stuf Oreos at several grocery stores, even though the new flavor comes in a slightly smaller package. At a
Target Corp.
store in Chicago, the limited-edition birthday Oreos, which came out January, cost $3.79 for a 24-cookie package and the Double Stuf ones cost $3.69 for a 30-cookie package.
Retailers set the final prices. Mondelez said it charges the same for the two products, and its limited edition flavors are typically different-sized packages than regular ones. A Target spokesperson said: “We’re priced competitively throughout the markets we do business.”
Economists and analysts at the Labor Department’s Bureau of Labor Statistics monitor prices of thousands of goods and services. They can account for shrinkflation, because they track the cost of certain products by weight and quantity—so a cereal box that costs the same amount but now has 30% less volume would be registered as a price increase.
They said their efforts can’t identify every fee or dropped amenity, such as a hotel room rate that remains the same but that no longer includes fresh towels or a hot breakfast. “We do not capture the decrease in service quality associated with cleaning a room every two days rather than one,” said Jonathan Church, a BLS economist.
Disney World in Florida added several fees last year while keeping the base ticket price at $109; the Magic Kingdom last summer.
Photo:
Joe Burbank/Orlando Sentinel/Associated Press
Jeremiah Mayfield and Carlos Larrea stayed at Alohilani Resort in Honolulu in December and opted for a $75 a-night upgrade to “club level” for free food and drinks. But they said they could rarely use it because the resort didn’t have enough staff to replenish the club-level amenities. After complaining, they were offered free dinner.
Alohilani General Manager Matthew Grauso said that quality and efficient guest service are top priorities and that he tries to remedy any shortfalls immediately, adding, “The pandemic has presented a unique set of challenges within the hospitality industry.”
“We gave them hell for it,” Mr. Mayfield said. “We paid $800 a night. We never expected it would be so scarce in terms of service and amenities.”
Many hotel chains are replacing complimentary hot breakfast buffets with a snack bag. Some fitness centers and pools remain closed, and housekeeping doesn’t refresh rooms daily. Some guests feel like they are getting less for their money.
InterContinental Hotels Group
PLC, which owns Holiday Inn, said it has been working with hotels to return amenities and make it right if guests aren’t satisfied. “Hotel teams have been overcoming many challenges including supply chain and labor shortages, changing health guidance and regulatory requirements,” an IHG spokesperson said.
On a recent trip to St. Louis, Meg Hinkley booked a Holiday Inn because it said online that it offered room service. When she arrived, the restaurant was closed, so there was no room service. She said she would have stayed at a lower-priced hotel if she had known. “I was paying for that convenience.”
—Heather Haddon and Bob Tita contributed to this article.
Write to Annie Gasparro at annie.gasparro@wsj.com and Gabriel T. Rubin at gabriel.rubin@wsj.com
Setting up a household budget and sticking to it can be challenging. Impulse shopping doesn’t make it any easier.
About 42% of consumers say they are worsening their financial situation by doing things like making impulse purchases and carrying more debt, according to a recent survey from BMO Harris Bank. Half of respondents said they often spend more money than they know they should, up from 45% in the bank’s April survey.
Credit card debt also is rising. After consumers shed about $130 billion worth of such debt between April 2020 (when it was above $1 trillion) and January 2021 (when it was $961 billion), the amount owed has climbed back up to $998.4 billion, according to the latest Federal Reserve data.
More from FA Playbook:
Here’s a look at other stories impacting the financial advisor business.
Often, the hardest part of financial planning is “managing a budget and getting cash flows into a surplus,” said certified financial planner Michael Kelly, founder of Switchback Financial in Madison, Connecticut.
“Impulse spending is one of the biggest hindrances,” Kelly said.
If you’re among those who find such purchases are causing credit card debt to pile up or are limiting you in other ways, there are some steps you can take that may help the situation.
You can start by creating a goals-based budget, said CFP Judson Meinhart, a financial advisor and manager of financial planning for Parsec Financial in Winston-Salem, North Carolina.
“You might be striving for financial independence, or maybe your goals are more immediate and revolve around becoming debt-free or taking a dream vacation,” Meinhart said.
“Whatever they are, write them down,” he said. “You are [far] more likely to act on your goals if you write them down.”
Then, keep goal-oriented money where you’re less likely to use it.
“If you want to cut down on impulse buys, put more of your money in the accounts where you’re saving for goals, and keep less of it readily available to spend,” Meinhart said.
It also may be useful to think about why you keep making impulse buys.
“Often the purchase is made not because you have a strong desire for the item itself but to satisfy an emotional need or relieve stress,” said Kelly, of Switchback Financial.
Writing down your values and making sure your purchases align with them can also help, Kelly said.
Of course, in the moment, all those promises you made to yourself may be forgotten. If you are online and see something you’re sure you simply must have, take a deep breath.
“Leave an item in your online shopping cart for at least 24 hours,” said CFP Jessica Goedtel, founder of Pavilion Financial Planning in Allentown, Pennsylvania.
Leave an item in your online shopping cart for at least 24 hours.
Jessica Goedtel
Founder of Pavilion Financial Planning
“Let the impulse cool off, and more than likely you’ll have forgotten about it by the next day,” she said.
Goedtel also recommends unsubscribing from marketing emails. “You won’t be tempted by that 50% off sale if you don’t know about it,” she said.
Additionally, you can make it harder for yourself to make unplanned purchases.
“Don’t save your credit cards in the apps on your phone,” said Meinhart, of Parsec Financial. “And make purchases with a debit card linked to a checking account you have earmarked for your monthly spending.”
The makers of some of the world’s bestselling food and drink brands warned they would keep raising prices as they grapple with the strongest inflation in years.
Nestlé SA, Diageo PLC, Anheuser-Busch InBev SA and Danone SA all said Thursday that sales were rising as key markets rebound from the pandemic, but that the recovery was also leading to rapidly increasing costs for ingredients, packaging and transport.
Nestlé said its ice creams had gotten more expensive, spirits giant Diageo has raised prices on brands like Baileys and Casamigos tequila, and Budweiser brewer AB InBev is exploring higher prices for its beers. Meanwhile, Danone, which makes Activia yogurt and Evian water, said it would increase prices across all of its categories to try preserve its profitability.
“We do expect price increases to accelerate from what you saw in the first half,” said Nestlé Chief Executive Mark Schneider. “After several years of low inflation, all of a sudden it accelerated very strongly starting in March and is continuing to accelerate.”
Companies across many sectors are contending with rising costs from coffee to aluminum and shipping as the recovery from Covid-19 gains steam. That is leading to higher prices for many goods, pushing U.S. inflation to rise at the fastest pace for more than a decade.
Even with boat sales and charters booming, yachting remains an enigma for most people.
CNBC spoke with several yacht owners who agreed to answer all questions — with no topics off limits — about the yachting lifestyle and perhaps more importantly, how much it costs.
The owners
Nim and Fabiola Hirschhorn are in the U.S. Virgin Islands aboard Luna, their 45-foot, 2019 Lagoon 450S catamaran. The couple operates all-inclusive crewed charters in the Caribbean.
Sophie Darsy and Ryan Ellison are in the Azores on Polar Seal, a 2007 Beneteau Oceanis 40 outfitted for ocean sailing. Several years ago, the couple learned to sail, quit their corporate jobs and now chronicle their life at sea.
How much does a decent yacht cost?
N. Hirschhorn: It depends on a few basic parameters. Is the boat secondhand or new, what year was it built, is it a monohull or catamaran, is it an ex-charter yacht or has it always been privately owned … do you want to simply coastal cruise or do you want to cross oceans?
The Hirschhorns operate charters in the Caribbean, with four-night trips for two guests starting around $12,000.
Courtesy of Sail Luna
Luna was purchased new for $650,000; however, we know plenty of people who live on boats that were purchased for $30,000-$80,000.
On average, you can purchase a seaworthy mid-range 45-foot monohull that can sail around the world for $100,000 to $150,000 and a catamaran of the same size for around $250,000 to $500,000. Of course, there are boats at both ends of the spectrum and at every price point in between.
A rough guide to entry-level boat purchases
Cost
Size
Year built
What to know
$5,000-$20,000
20-30 feet
1960s to 1980s
Will likely need maintenance that could easily cost as much as the boat
$30,000-$60,000
30-40 feet
1970s to 1980s
Unlikely boat will be ready for cruising; budget at least 25% of the boat’s value for post-purchase repairs and upgrades
$70,000-$110,000
40-50 feet
1990s to 2000s
An entry-level modern boat or an older larger boat; here cost is a balance of age, size and equipment
Source: Sophie Darsy
Are there other costs to know about?
Darsy: The purchase price is only a portion of the budget you need to acquire a yacht. Once we took delivery of our boat, costs came faster than we knew!
American Ryan Ellison and Frenchwoman Sophie Darsy, who are now both Swedish nationals, bought their boat for $90,000 in 2016.
Courtesy of Ryan and Sophie Sailing
In the first three years that we owned Polar Seal, we spent at least $40,000 to equip her for cruising and ocean sailing, including:
A cockpit enclosure to keep the cockpit dry: $7,000
New sails: $8,000
A dinghy and an electric outboard [engine for the dinghy]: $5,000
A water maker to make freshwater from seawater: $2,000
Lithium batteries and parts to power appliances: $6,000
A new autopilot: $2,000
A life raft: $2,500
Safety and communication equipment: $3,000
If you want to buy a boat, keep at least 30% of your budget for maintenance, repairs and upgrades.
We also have annual costs for boat insurance (between $1,000 and $4,000, depending on location) and travel and health-care insurance when we are out of Europe ($1,500) as well as plane tickets to visit our families (around $2,000 per year).
How much do you need to make — or save — to live on a yacht for a few years?
N. Hirschhorn: Think about what it costs to live on land — what kind of lifestyle do you live? Do you like to eat out at fancy restaurants and buy nice things? Chances are you will do the same when living on a boat, which means that your lifestyle will often cost the same. Will you anchor — which is free — or stay in marinas? Will you be on a sabbatical living off savings or do you work along the way? Are you a family or a couple?
Nim Hirschhorn said he pays $90-$300 per night to dock his boat in marinas in the Caribbean.
Courtesy of Sail Luna
We have friends who lived aboard a 1984 47-foot monohull for two years with three kids. The boat cost $90,000 and they lived off $50,000 a year cruising the Caribbean and anchoring the entire time.
Personally, we live on about $100,000 a year. I know couples living on $1,000 a month, and families living on $3,000-$6,000 a month. It’s not unusual in our community to hear that living on a boat and traveling the world costs less than living on land.
How much does location affect costs?
Darsy: In 2019, we spent the winter at a marina in Spain where we could benefit from an advantageous rate ($300 a month). But food was very inexpensive ($300 a month). We took advantage of our time at the dock to undertake some major boat projects and our maintenance budget went way up — $15,000 of upgrades over six months.
But we rented a car at virtually no cost thanks to a local deal, and our “fun activities” budget went almost down to zero, as we enjoyed inexpensive restaurants and bars with friends all over southern Spain.
Yacht owners have budgets too, said Sophie Darsy who along with Ryan Ellison, spend about $3,500 a month for boat maintenance, data plans, groceries, the occasional marina stay and activities such as diving, windsurfing and car rentals.
Courtesy of Ryan and Sophie Sailing
In comparison, when we made a three-week detour to Bermuda, groceries and restaurants were very expensive. But, we spent those weeks on anchor and did not have to pay for a marina. We spent nothing on maintenance or repair. We spent the remaining weeks of that month at sea, and since we spent no money during those two weeks, we made our budget.
How has the pandemic affected yachting?
N. Hirschhorn: It is more complicated … some countries have their seaports closed for visiting yachts, and some ask for entry protocol that might include preapproval and quarantine for up to two weeks on board.
Some countries do not accept all nationalities and travelers from specific origins, which makes it difficult when we may have three to four nationalities on board. Other countries are welcoming only vaccinated travelers.
Covid test requirements mean “we can no longer island hop,” said Nim, adding that frequent rule changes and test result delays have made yachting logistically complicated.
Courtesy of Sail Luna
Darsy: The pandemic has made sailing between countries a little more difficult, but while our options were extremely limited in 2020, we have had much better luck in 2021.
Like the housing market, the boat market exploded in 2020 and 2021. It seems like everyone and their neighbor wants to buy a yacht … the prices have also increased in a way never seen before. Our boat has increased in value to the point that if we sold it today, we would not lose any of the capital we put in it.
Is having young children compatible with living full time on a yacht?
F. Hirschhorn: There is no reason why children of all ages can’t live on a yacht. There are many families living on boats on the water and they are usually very confident, intelligent and worldly kids who thrive in this lifestyle. In the Caribbean especially, there are hundreds of “kid boats” [boats with families living on them].
Is there Wi-Fi out at sea?
N. Hirschhorn: Yes, we have a few layers of service. We have cellular data service that can pick up a signal up to 20 nautical miles offshore. Since we usually sail between the Caribbean islands, we are usually always connected. We also have two other satellite-based systems with limited Wi-Fi, but coverage all over the globe.
Darsy: Nope! We only have Wi-Fi at port or on anchor, when we have a data plan for the country that we are currently sailing in. Out on the open sea, we have satellite internet that enables us to download weather forecasts and basic emails, but definitely not watch Netflix or listen to Spotify!
Is seasickness common?
Darsy: A lot of sailors suffer from seasickness, and I am particularly prone to it. The trick is to prevent it. Once the nausea settles, you can’t get rid of it.
We know many boat owners who are not wealthy at all. It’s just a different lifestyle…
Nim Hirschhorn
Captain of Sail Luna
My top tips are:
Take medication the night before departure and get a good night of sleep.
Drink a lot of water and eat a lot more than you normally would; low blood sugar accelerates seasickness.
Keep yourself warm; invest in sailing clothes and gear that will protect you from the elements, as being cold will send you to a nauseous hell in no time.
Is skinny-dipping allowed?
N. Hirschhorn: No, we need to abide by local laws and customs; however, in the Mediterranean nudity is far more common.
Darsy: It isn’t rare for us to be alone on anchor, off a desert island. No one is watching, so …
What is the most common question you’re asked?
N. Hirschhorn: Many ask us if we have a home on land. We love seeing the surprise on their faces when we explain that Luna is our home.
European countries are “easy” to travel between, but the Caribbean can have “archaic” and costly processes for yachts, said Darsy.
Courtesy of Ryan and Sophie Sailing
Darsy: All my friends have asked me if I am ever scared of encountering a storm or big seas that would capsize our boat, and honestly before we left, I was!
But now I know we always leave port when we have a good weather window. In three years, 13,000 nautical miles and two ocean crossings, we’ve only sailed through gale-force winds once, and we did perfectly well.
What is the biggest misconception people have about the yachting lifestyle?
N. Hirschhorn: Some people think that a yacht owner is a millionaire. We know many boat owners who are not wealthy at all. It’s just a different lifestyle that comes with many bonuses, but also many sacrifices.
Darsy: People believe that we are very rich, that we come from wealthy families or that we make a lot of money. None of this is true. We saved a lot of money, made some sacrifices, and continue to do so … and we stay on budget.
When we were employed full-time, Ryan and I brought home comfortable salaries, and we lived the “two income, no kids” dream. We now make less than half of what we earned then and live with half our old budget … but our lives are a lot richer.
Editor’s Note: This interview has been edited for length and clarity.
