Here's the latest personal finance news, how it may impact your financial plan and what you can do to maintain your financial well-being.
Inflation Is Sticky but Still on the Right Track
In September, the consumer price index (CPI) rose by 2.4%, the smallest increase since February 2021. That's down only slightly from 2.5% in August, and the core CPI, which doesn't include volatile food and energy costs, is still relatively high at 3.3% year over year.
But while the September inflation rate was slightly higher than expected, it's still on a downward trend and continues to close in on the Federal Reserve's target of 2%.
The Personal Consumption Expenditures (PCE) price index, which is the Federal Reserve's preferred inflation metric, also reached 2.2% in August.
Why It Matters
While consumers have been hammered by persistently high inflation rates over the past few years, economists are increasingly certain that the country can avoid a recession. The Federal Reserve slashed its federal funds rate for the first time in more than four years in September, and the federal agency may do it again in its November meeting.
That said, the CPI is influenced by a wide variety of consumer goods and services, and some prices have swung much more wildly than others. For example, gasoline prices dropped by 15.3%, and used vehicles are 5.1% less expensive than they were a year ago. However, shelter costs are up 4.9%, and transportation services are 8.5% more expensive.
As a result, it's still important to watch your spending and find ways to cut back on expenses.
What You Can Do
- Understand how inflation works.
- Look for the next inflation report on November 13.
- Read up on ways you can fight inflation.
- Look for ways to reduce your risks when borrowing money.
Mortgage Rates Returning to Summer Highs
After nearing 6% for the first time since February 2023, mortgage rates are on the rise again. According to Freddie Mac, the average rate for a 30-year fixed-rate mortgage hit 6.54% toward the end of October.
The government-sponsored enterprise noted in its most recent update that the about-face is due to differences in the narrative about an economic downturn in spite of strong economic data.
Other experts have noted that, unlike most forms of consumer debt, mortgage loans aren't directly influenced by the federal funds rate. Rather, mortgage lenders use the 10-year Treasury yield as a benchmark. That rate has increased over the past month for a variety of reasons, including the possibility that the Federal Reserve will be more cautious about further rate cuts.
Why It Matters
Mortgage interest rates have been uncomfortably high for more than two years now, disrupting the housing market and pushing mortgage payments to record highs.
While rates have largely trended downward in 2024, the latest blip adds more uncertainty to the timeline for housing costs to become more affordable again.
What You Can Do
- Learn how to deal with high mortgage rates.
- Read up on how mortgage interest works.
- Consider whether to buy a house when rates are high.
- Understand the pros and cons of refinancing a mortgage loan.
Social Security Benefits to Increase by 2.5% in 2025
The Social Security Administration announced a cost of living adjustment (COLA) increase of 2.5% in 2025 for more than 72.5 million Americans who receive Social Security benefits and Supplemental Security Income (SSI).
The federal agency pegs its annual adjustment to the consumer price index for urban wage earners and clerical workers. Next year's increase is a small drop from the 3.2% COLA for 2023.
Why It Matters
If you're a Social Security benefits or SSI recipient, the federal agency expects benefits to increase by an average of $50 starting in January. However, depending on how inflation has impacted prices where you live, that may not be enough to make up for rising costs.
What You Can Do
- Get an idea of how much Social Security you'll receive in retirement.
- Consider when to start taking Social Security payments.
- Watch out for Social Security scams.
- Learn about qualifying for credit while on Social Security.
IRS Announces New Tax Brackets, Standard Deduction for Next Year
The IRS has released its inflation adjustments for the 2025 tax year, which include new tax brackets and a higher standard deduction, among other things. Here's how the new tax brackets break down:
| 2025 Federal Income Tax Brackets | ||
|---|---|---|
| Marginal Tax Rate | Taxable Income for Single Filers | Taxable Income for Married Couples Filing Jointly |
| 10% | $11,925 or less | $23,850 or less |
| 12% | $11,926 to $48,475 | $23,851 to $96,950 |
| 22% | $48,476 to $103,350 | $96,951 to $206,700 |
| 24% | $103,351 to $197,300 | $206,701 to $394,600 |
| 32% | $197,301 to $250,525 | $394,601 to $501,050 |
| 35% | $250,526 to $626,350 | $501,051 to $751,600 |
| 37% | $626,351 or more | $751,601 or more |
The standard deduction has increased to $15,000 for single taxpayers and married couples filing separately, $22,500 for heads of household and $30,000 for married couples filing jointly.
Why It Matters
Annual adjustments to federal income tax brackets, standard deductions and other tax breaks help ensure that the tax code keeps up with inflation. If your taxable income doesn't change from 2024 to 2025, for instance, you'll likely owe less in federal taxes.
Keep in mind that these changes don't affect your 2024 tax return, which you'll file in early 2025; the new limits are for the taxes you'll file in early 2026. If you have questions about IRS changes or you're looking for opportunities to minimize your tax burden, consult with a tax professional.
What You Can Do
- Get tips on how to make tax filing easier.
- Gather your necessary documents for the upcoming filing season.
- Learn about ways to increase your tax refund.
- Start planning what to do with your tax refund.
Good Credit Can Contribute to a Healthy Financial Plan
While there are aspects of your financial situation that are outside of your control, building and maintaining a good credit score can help you weather challenges and save money in the long run.
With Experian's free credit monitoring service, you'll get access to your FICO® Score☉ and your Experian credit report. With this information in hand, you can gauge your credit health and target areas of your credit profile that you can improve over time. And with real-time alerts whenever your report is updated, you can spot potential issues and fraud and address them quickly.