It’s important to understand how inflation is reported and how it can affect investments.

“If the current annual inflation rate is less than 3 percent, why do my bills seem like they’re 10 percent higher than last year?”1

Many of us ask ourselves that question, and it illustrates the importance of understanding how inflation is reported and how it can affect investments.

What Is Inflation?

Inflation is defined as an upward movement in the average level of prices. Each month, the Bureau of Labor Statistics releases a report called the Consumer Price Index (CPI) to track these fluctuations. It was developed from detailed expenditure information provided by families and individuals on purchases made in the following categories: food and beverages, housing, apparel, transportation, medical care, recreation, education and communication, and other groups and services.2

How Applicable Is the CPI?

While it’s the commonly used indicator of inflation, the CPI has come under scrutiny. For example, the CPI rose 2.4 percent for the 12 months ending in September 2024. However, a closer look at the report shows movement in prices on a more detailed level. Transportation services prices, for example, rose 8.5 percent during those 12 months. CPI is a basket of goods, and your basket of goods may not reflect the basket of goods represented by the CPI.1

Are Investments Affected by Inflation?

They sure are. As inflation rises and falls, three notable effects are observed.

First, inflation reduces the real rate of return on investments. So, if an investment earned 6 percent for a 12-month period and inflation averaged 1.5 percent over that time, the investment’s real rate of return would have been 4.5 percent. If taxes are considered, the real rate of return may be reduced even further.3

Second, inflation puts purchasing power at risk. When prices rise, a fixed amount of money has the power to purchase fewer and fewer goods.

Third, inflation can influence the actions of the Federal Reserve. If the Fed wants to control inflation, it has various methods for reducing the amount of money in circulation. Hypothetically, a smaller supply of money would lead to less spending, which may lead to lower prices and lower inflation.

Empower Yourself with a Trusted Professional

When inflation is low, it’s easy to overlook how rising prices are affecting a household budget. On the other hand, when inflation is high, it may be tempting to make more sweeping changes in response to increasing prices. The best approach may be to reach out to your financial professional to help you develop a sound investment strategy that takes both possible scenarios into account.

1. USInflationCalculator.com, 2025. As of August 2025.
2. BLS.gov, 2025
3. This is a hypothetical example used for illustrative purposes only. It is not representative of any specific investment or combination of investments. Past performance does not guarantee future results.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Learn about the average American budget in this fun and interactive piece..

According to the Bureau of Labor Statistics, the average American household earns an average of $101,805 a year before taxes and spends over 80% of their available income on basic necessities such as housing, food, and clothing. So, how does your household compare?

The average American spends roughly 33% of their income on shelter. This can include property rent, mortgage interest, property taxes, maintenance, repairs, and home insurance.

Americans spend an average of 17% of their total income on transportation, including the purchase and upkeep of their vehicle.

Whether cooking at home or eating out, Americans spend an average of 13% of their income on food.

After the “basic needs” are covered, Americans spend an average of 12% of their income on personal insurance and pensions.

The average American household spends an average of 8% of their total income on health care and health insurance.

At the end of the day, Americans still manage to spend an average of 5% of their income on entertainment.

Americans value charitable giving by spending an average of 3% of their income on cash contributions.

Finally, Americans spend 3% of their total income on apparel.

1. Bureau of Labor Statistics, 2025
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Tax preparation may be the perfect time to give the household budget a check-up.

Every year, about 140 million households file their federal tax returns. For many, the process involves digging through shoe boxes or manila folders full of receipts; gathering mortgage, retirement, and investment account statements; and relying on computer software to take advantage of every tax break the code permits.1

It seems a shame not to make the most of all that effort.

Tax preparation may be the only time of year when many households gather all their financial information in one place. That makes it a perfect time to take a critical look at how much money is coming in and where it’s all going. In other words, this is a great time to give the household budget a checkup.

Six-Step Process

A thorough budget checkup involves six steps.

  1. Creating Some Categories. Start by dividing expenses into useful categories. Some possibilities: home, auto, food, household, debt, clothes, pets, entertainment, and charity. Don’t forget savings and investments. It may also be helpful to create subcategories. Housing, for example, can be divided into mortgage, taxes, insurance, utilities, and maintenance.
  2. Following the Money. Go through all the receipts and statements gathered to prepare taxes and get a better understanding of where the money went last year. Track everything. Be as specific as possible, and don’t forget to account for the cost of a latte on the way to the office each day.
  3. Projecting Expenses Forward. Knowing how much was spent per budget category can provide a useful template for projecting future expenses. Go through each category. Are expenses likely to rise in the coming year? If so, by how much? The results of this projection will form the basis of a budget for the coming year.
  4. Determining Expected Income. Add together all sources of income. Make sure to use net income.
  5. Doing the Math. It’s time for the moment of truth. Subtract projected expenses from expected income. If expenses exceed income, it may be necessary to consider changes. Prioritize categories and look to reduce those with the lowest importance until the budget is balanced.
  6. Sticking to It. If it’s not in the budget, don’t spend it. If it’s an emergency, make adjustments elsewhere.

Tax time can provide an excellent opportunity. You have a chance to give your household budget a thorough checkup. In taking control of your money, you may find you are able to devote more of it to the pursuit of your financial goals.

1. IRS.gov, 2025
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Longer, healthier living can put greater stress on retirement assets; the bucket approach may be one answer.

 

John and Mary are nearing retirement and they have a lot of items on their bucket list. Longer life expectancies mean John and Mary may need to prepare for two or even three decades of retirement. How should they position their money?1

One approach is to segment your expenses into three buckets:

  • Basic Living Expenses— Food, Rent, Utilities, etc.
  • Discretionary Spending — Vacations, Dining Out, etc.
  • Legacy Assets — for heirs and charities

Next, pair appropriate investments to each bucket. For instance, Social Security might be assigned to the Basic Living Expenses bucket.2

For the discretionary spending bucket, you might consider investments that pay a steady dividend and that also offer the potential for growth.3

Finally, list the Legacy assets that you expect to pass on to your heirs and charities.

A bucket plan can help you be better prepared for a comfortable retirement.

Call today and we can develop a strategy that may help you put enough money in your buckets to complete all the items on your bucket list.

1. John and Mary are a hypothetical couple used for illustrative purposes only. Diversification is an approach to help manage investment risk. It does not eliminate the risk of loss if security prices decline.
2. Social Security benefits may play a more limited role in the future and some financial professional recommend creating a retirement income strategy that excludes Social Security payments.
3. A company’s board of directors can stop, decrease or increase the dividend payout at any time. Investments offering a higher dividend may involve a higher degree of risk. Keep in mind that the return and principal value of stock prices will fluctuate as market conditions change. Shares, when sold, may be worth more or less than their original cost.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Keys to preparing to grow wealthy together.

When you marry or simply share a household with someone, your life changes—and your approach to managing your money may change as well. The good news is it’s usually not so difficult.

At some point, you will have to ask yourselves some money questions—questions that pertain not only to your shared finances but also to your individual finances. Waiting too long to ask (or answer) those questions might have some consequences.

First off, how do you propose setting priorities? One of your first priorities should be simply setting aside money that may help you build an emergency fund. But there are other questions to ask. Should you open joint accounts? How should you title assets that are owned by both of you?

How much will you spend & save? Budgeting can help you arrive at your answer. A simple budget, an elaborate budget, or any attempt at a budget can prove more informative than you realize. A thorough, line-item budget may seem a little over the top, but what you learn from it may be truly eye-opening.

How often will you check up on your financial progress? When finances affect two people rather than one, statements can become more important. Checking in on these details once a month (or at least once a quarter) may keep you both informed, so that neither one of you have misconceptions about household finances or assets. Arguments can be avoided when money misunderstandings are resolved through check ups.

What degree of independence do you want to maintain? Do you want to keep some money separate? Some spouses need individual financial “space” of their own. There is nothing wrong with this approach.

Can you be businesslike about your finances? Spouses who are inattentive or nonchalant about financial matters may encounter more financial trouble than they anticipate. So watch where your money goes, and think about ways to pay yourself first. Set shared short-term, medium-term, and long-term objectives.

Communication is key to all this. Watching your progress together may well have benefits beyond the financial, so a regular conversation should be a goal.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Many Americans are operating their personal finances with only the barest minimum of knowledge.

Imagine driving a car without a basic understanding of the rules of the road or even how to operate it. Scary thought.

Here’s another scary circumstance – one that is all too real. Many Americans are making financial decisions with minimal financial knowledge of investing, budgeting, and credit. The TIAA Institute conducted a survey on U.S. financial literacy, asking 28 basic questions about retirement savings, debt management, budgeting, and other financial matters. The average respondent answered only about half of the questions correctly.1

Another recent survey conducted by the Census Bureau found that almost 40% of Americans say that it has been somewhat or very difficult to pay for usual household expenses in the last seven days.2

It has been said that knowledge is power, and if that’s true, then too many Americans lack the power to control their financial futures. Financial success rarely happens by accident; it is typically the outcome of a journey that starts with education.

One of the obstacles to greater financial literacy is the so-called “Lake Wobegon effect.” In other words, we all consider ourselves above average, and based on that belief, it only follows that our financial understanding is above average. Unfortunately, this assumption has a flaw: it may discourage us from learning as much as we need in order to continue adapting to an ever-changing financial landscape.

The more informed we are, the more informed our financial decisions may become. Fortunately, we can consult a wide range of resources in pursuit of greater financial knowledge.

If you are committed to increasing your financial literacy, think about turning to financial professionals with your questions or visit a U.S. Treasury-sponsored website created for that very purpose.3

  1. TIAAInstitute.org, 2022

  2. Census.gov, 2023

  3. MyMoney.gov, 2023

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.
css.php