Many commuters who take mass transit to get back-and-forth to work each day will find the cost of their trip is about to get a lot more expensive. Once the new year begins, a mass transit tax break will dramatically decline. This year, train and bus riders can set aside up to $245 a month in pre-tax income to pay for their rides, but for 2014, that tax exemption drops to $130. The effective tax hike could encourage people to forego mass transit and opt to drive to work instead.
Here on Wall Street, the Dow Jones industrial average (^DJI) and the Standard & Poor's 500 index (^GPSC) start the week near the all-time highs set last week. Both gained more than 1 percent last week, as did the Nasdaq Composite (^IXIC).
The bond market is also drawing lots of attention. The yield, or interest rate, on the 10-year Treasury is above 3 percent -- the first time that's happened in more than two years.
Shares of Twitter (TWTR) have been on a roller coaster ride of late. They're up nearly 60 percent in the past month, but they plunged on Friday on fears that the stock rose too fast, too soon.
%VIRTUAL-article-sponsoredlinks%That's raising concerns that other internet-related stocks that have soared this year could be in danger of a pullback. Still, analysts say the situation is not comparable to 2000, when the internet bubble popped. The big difference between now and then is that many of the biggest names now -- Google (GOOG), Facebook (FB) and Netflix (NFLX) -- actually make money.
And finally, the drug maker Merck (MRK) is reportedly planning to overhaul its once-vaunted research and development operations. The Wall Street Journal says the company will establish four main innovation hubs around the globe -– near Boston, San Francisco, London and Shanghai. They would seek deals to license or acquire promising research done by others, while at the same time cutting back on the company's in-house research efforts.
This is my personal favorite! Think of yourself as a regular monthly bill you have to pay. All you have to do is arrange to have a set amount of money directly deposited from your paycheck into a savings account each month.
I recommend using a separate savings account because if you have access to your funds in your checking account, you're more likely to spend them. Again, it might hurt a bit at first to take home a little less every month, but trust me, after a while you won't even notice it's gone. Here's a moment when the "set it and forget it" strategy works wonders.
It feels great to be rewarded for your hard work. And it feels even better to spend that hard-earned bonus on something you’ll enjoy, like a trip to France or an iPad. At the same time, the pleasure of a vacation or new gadget is short-lived compared to financial security.
So make a pact with yourself to put every bonus you get from here on out to good use. If you direct 90 percent of your bonuses straight into your savings account as a rule, you’ll still have 10 percent to treat yourself with (plus the comfort of knowing that you're building a well-earned safety net). I live by this rule.
OK, OK, this seems like an obvious one -- and easier said than done. Actually, most people spend money on more unnecessary items than they think. So take time to look at where your money is going in detail and begin to cut back. Saving $10 here and there could help you put a lot away in the long run.
Many banks offer seasonal accounts meant to save for holidays like Christmas. These accounts give you reduced access to your accounts, charging a hefty penalty each time you withdraw more than permitted. Since emergencies don't occur often, a seasonal account could make sure you're touching it only when needed (just make sure you're not tempted to blow it all on Christmas gifts).
I love this one. Chalk it up to my massive craving for organization, but I'm all about getting rid of things I no longer use. Rather than throwing these unused goods away, start selling them, and put that money into your emergency fund. All you need to do is post them to a site like eBay or Craigslist or Amazon and you can get rid of items from the comfort of your home. You can also take your clothes to a consignment shop to have them sold for you.
Instead of saving your pennies, put aside any $5 bills that come your way. Never spend a $5 bill again, and you'll be surprised by how quickly this silly trick will help you come up with a few hundred dollars to add to an emergency fund.
You could pick up odd jobs via websites like TaskRabbit.com, DoMyStuff.com, Elance.com, FreelanceSwitch.com or Sitters.com.
If you get a cash-back reward for any spending on your credit card, just make it a rule that those dollars will be dedicated to your freedom fund. It may only add up to $100 extra each year, depending on your spending, but every little bit counts.