December Financial Check-In: What You Should Know About Your Money This Month

December Financial Check-In: What You Should Know About Your Money This Month

It’s beginning to look a lot like Christmas. And it’s not just the twinkling lights that have clued us in.

There’s a certain state of frenzy that many of us experience right about now, when we realize just how little time is left to shop, wrap, bake and prep for the holidays—let alone stay up-to-date on the latest financial happenings.

Well, now’s your time to get caught up, thanks to our handy roundup of major money news from the past few weeks that could impact your wallet (and well-being) into 2015.

News Flash #1: Can we avoid a "too big to fail" redux in the future?

Remember when governments had to bail out big banks to help keep them afloat during the financial crisis? Yeah, so do international regulators—and they want to prevent it from ever happening again.

That's why the Switzerland–based Financial Stability Board, a group of policy makers representing the world’s 20 largest economies, just proposed a new plan that would require major financial institutions to set aside up to 20% of their assets as a cushion to draw from should another crisis occur. The goal: Keep taxpayers from footing the bill for future bailouts.

The plan would affect such major global banks as Goldman Sachs, JP Morgan Chase & Co., HSBC and Deutsche Bank, which would have to issue bonds in order to build up their safety nets. And while complying with the rules might mean lower profits for the banks, it could also shield the average citizen from bearing the brunt of big-bank meltdowns.

Regulators hope to finalize the proposal at their next meeting in 2015—but the banks wouldn't have to actually implement the plan until 2019 at the earliest.

News Flash #2: Health care is likely to take a bigger bite out of your budget in 2015

According to new research from Aon Hewitt, employees who have health insurance through their companies can expect to pay an average of $5,151 in premiums and out-of-pocket medical costs next year—that's a 52% increase over the past five years.

And those who have private insurance are also taking a hit: A study by PricewaterhouseCoopers estimates that average premiums will go up by more than 5% for those who get health coverage on their own or through the health care exchanges set up by the Affordable Care Act.

However, the hike in costs isn’t all bad news—it could actually be a sign of an economy on the uptick. As hiring improves, employees should have more money to spend on medical care they may have put off when times were leaner.

"With employment rates stabilizing, individuals are feeling more secure about their financial situation and have been willing to re-engage in using the health care system,” Tim Nimmer, Aon Hewitt’s chief health care actuary, said in a statement. “As these utilization rates increase, we expect to see health care cost increases follow."

News Flash #3: Another reason to hit the treadmill ...

Here's some, ahem, food for thought: A recently released report from McKinsey and Company estimates that the obesity epidemic now costs the global economy $2 trillion a year—that's nearly as much as the price tag incurred by war and terrorism combined.

The figure reflects higher health care spending as well as losses in productivity resulting from disabilities and premature deaths. Currently, 30% of the world’s population is overweight or obese—with obesity being the culprit behind about 5% of global deaths each year.

So how do we keep our waistlines from wrecking the economy?

The authors say it would require a combination of factors, such as better food labeling, educational efforts, reducing default portion sizes, workplace wellness programs—even redesigning cities to encourage physical activity.

While there’s no single silver-bullet solution, one thing is clear: That $2 trillion burden could balloon if obesity isn’t kept in check. If current health trends continue, almost half of the global population will be considered overweight or obese by 2030.

News Flash #4: What male C.E.O.s have to do with the wage gap

Are the chances you’ll take home a decent paycheck dependent upon the gender of your boss? According to research published last month in the journal "Management Science," the answer could be yes—and women are, once again, on the wrong end of the wage gap.

The study found that companies with male C.E.O.s—older males, especially—exhibit more gender-based discrimination than companies led by women.

The most glaring evidence? According to the study, female execs at male-led companies made, on average, $46,500 less than male employees who ranked below them in seniority—yet researchers found only limited evidence that female C.E.O.s underpaid male officers.

5% of all Fortune 500 C.E.O.s are women, and it stands to reason that a vast number of females in the C-suite are making less than their male counterparts.

News Flash #5: Oil price wars—good for the consumer, bad for the global economy?

While most Americans were busy basting their Thanksgiving turkeys, halfway across the globe the Organization for Petroleum Exporting Countries (OPEC) was deciding whether its members should curtail production in an effort to lift falling oil prices.

The verdict? They voted to keep production status quo, which promptly sent oil prices to less than $70 per barrel—lows we hadn't seen for more than five years. Such a move counters the classic laws of supply and demand: Typically when oil prices drop, OPEC decides to cut back on production so there isn't a glut of supply on the market.

But this time political maneuvering was at play. Analysts say the oil cartel, composed of big producers outside the U.S.—like Kuwait, Saudi Arabia and Venezuela—is purposely keeping prices low to squeeze the U.S. shale oil market. Shale oil is more cost-intensive to produce, and keeping oil prices low would make shale oil production less profitable.

On the one hand, lower oil prices means we all get a break at the gas pump. On the other, oil-producing states like Texas, Oklahoma and Wyoming could take a hit to their local economies—along with those of countries like Russia, which depends heavily on oil revenue.

Which begs the question: Will OPEC continue to play chicken with the global economy in 2015 just to flex its muscles on the world energy stage?

Last but not least, here are some more conversation-starter stats that could come in handy at your next holiday party:

• Are the days of brick-and-mortar banking done? In 2014, banks shut down 2,599 branches, thanks in part to the rise of e-banking and a surge in merger activity among financial institutions.
• Home prices are on the rise, but it seems our incomes aren't: Just under 62% of house prices are considered affordable for families making the U.S. median income of $63,900.
• A gentle reminder to put in for those vacation days: According to a poll, Americans use only 51% of their paid time off.

LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc., that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. The individuals quoted or interviewed in this piece are neither clients, employees nor affiliates of LearnVest Planning Services and the views expressed are their own. LearnVest Planning Services and any third parties listed, linked to or otherwise appearing in this message are separate and unaffiliated and are not responsible for each other’s products, services or policies.


Financial planning made simple.

Get your free financial assessment.

Related Tags

Get the latest in your inbox.

Subscription failed!

You're Now Subscribed!