The Economy Scoop, Buffets Banking Wisdom and More

🔥 ^{Hot off the press: Here’s what’s burning up our news feed.} 🔥

• Tipping is getting trippy

• Buffet gives his two cents on the banking crisis

• Thursday will hold some big answers on the state of the economy

Let’s Chop It Up…

Tipping is Getting Trippy

If you’re feeling like you’re being hassled for a handout each time you hit a checkout line, you’re not alone. I have noticed casual “tip suggestion prompts” on many of my usual spots lately - the nail salon, the airport bar, and even my favorite bakery 😒.

People are starting to (loudly) voice their outrage on the pushy tipping epidemic that is plaguing our everyday expenses from coffee shops to grocery stores.

Some are even referring it to as “emotional blackmail” which I personally feel is a tad dramatic but I can see where the feeling stems from. 😂

The Problem? (besides being an annoyance)

As if prices aren’t already through the roof, consumers aren’t exactly lining up to hand over even more dough for pretty much nothing. But there’s an even more concerning issue here: Are the tips even going to the actual employee?

Companies argue that electronic tips are distributed fairly among on-shift employees, even when no direct assistance was provided buuutttt we’re not so sure.

Even if they are, if you tip electronically a percentage of those tips are taxed at the standard 7.65%. That goes up to 15.3% if they are self-employed.

🔑Pepper’s Key Takeaways:

• Self-checkout and tipping prompts are here to stay, whether we like it or not 🛒

• Be mindful of where your tips are going and decide if you're willing to contribute 🧐

• If you truly do feel incentivized to tip, try to do so in cash so they avoid getting hit with tax from their employer. 💲

Buffet Gives His Two Cents on the Banking Crisis

Warren Buffett shared his insights at Berkshire Hathaway's annual general meeting, addressing concerns about the banking crisis, the future of the U.S. economy, and the company's leadership.

According to Buffett, poor messaging, mobile banking, and consumer fears about the safety of banks are exacerbating the current issues faced by U.S. lenders.

His biggest push was: Your Deposits are Safe! - and we wholeheartedly agree. What many people are not getting is that the recent banking blunders were due to unique situations that the average American does not run into.

Here’s Why…

Each (reputable) financial institution is backed by FDIC insurance. This covers your tail if the bank were to ever go under.

The catch?

It only covers accounts up to $250,000 in losses. This is where banks like SVB got into a bind. Since SVB account holders were uniquely large depositors (think big tech firm money in the millions).

When the bank went belly up, the FDIC didn’t cover all the depositor’s funds.

What Does This Mean to You?

The average consumer is struggling to keep even a few hundred in their savings account so it’s likely they aren’t too worried about maxing the $250,000 limit. But if you are the select few that do (well we dislike you - jk, only seething with envy).

• Make sure you check your insurance for comprehensive coverage.

• Diversify your funds through multiple accounts. Remember the FDIC insurance is per account.

• Invest! That money is not doing you any good sitting in a low-interest-bearing savings account anyways. Time to invest.

Interest Rates, Inflation, and Economic Data: What to Watch This Week 📊👀

The Federal Reserve has raised interest rates for the 10th time (we’re now between 5% to 5.25%) in an effort to combat inflation, and this week's economic data will provide further insight into price trends.

The consumer price index, set to be released on Wednesday, is expected to reveal a 5% annual increase in April and a 0.4% increase from March, as per a Wall Street Journal survey. Although the index has dropped from a 9.1% peak last June, it's still significantly above the central bank's 2% target.

Last week's stronger-than-expected U.S. jobs report suggests that upward pressure on prices continues.

This week, keep an eye on the following economic reports:

🗓️ Thursday, May 11:

• U.S. Department of Labor's initial jobless claims, a proxy for layoffs and unemployment benefits 📈

• Bureau of Labor Statistics' monthly Producer Price Index for April, measuring inflation based on production costs 🏭

🗓️ Friday, May 12:

• University of Michigan's preliminary reading of May's Consumer Sentiment Index, gauging American perceptions of economic conditions.

🔑 Salt's Key Takeaways:

So, the Fed has raised interest rates AGAIN to combat inflation, because apparently, they just can't resist making our lives more expensive. This week's economic data will give us a fun little glimpse into just how screwed we really are, with the Consumer Price Index expected to show a 5% increase in April.

Be on the hunt for the two reports dropping this week:

• U.S. Dept. of Labor Jobless Claims aka how many hardworking Americans have been laid off 😔

• Consumer Sentiment Index or how confident people feel about the economy…I’ll save you a read: not very 😡

So, in conclusion: the Fed is making things more expensive, and we're all just trying to figure out how to afford milk that costs the same as a tank of gas.

Buckle up for some real talk. Our candid, no-nonsense advice may not win popularity contests, but it sure gets results.

1. The straight path to wealth-building: Make more 💼 or save more - that’s it. There’s no in-between, shortcuts or magic tricks, just hard work and dedication.

2. Reassess your priorities: Stash away $1,000 for emergencies, then focus on crushing high-interest debt 💣 before building that 3-6 month safety net. That money is doing you no good if you have high-interest debt eating at you.

3. Embrace the discomfort: Time to trim the financial fat, ditch the splurges, and track every penny 💰. Get serious about budgeting to make the most of your paycheck.

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