Milan's Money Newsletter
Hey Money Makers! In today's newsletter, we've got a trio of stories shaking up the money world. First up, we'll dive into the surprising twist in the gym world. Then, we'll dissect the latest job market jitters as initial filings for unemployment benefits hit a high. And finally, we'll debunk a classic credit card myth that might have been holding you back from building that stellar credit score. So grab your favorite beverage, settle in, and let's unpack these money moves together!
- Milan
IN THE KNOW
Gen Z Takes The Financial Hit
Gen Z is facing financial challenges that are quite different from what millennials encountered a decade ago. Gen Z individuals aged 22 to 24 are earning less than their millennial counterparts did at the same age. On average, Gen Z is pulling in about $45,493, whereas millennials were raking in $51,825 at the same age. Blame it on the high inflation economy Gen Z grew up in, which has seen prices shoot up by a whopping 32% since 2013. That's a whole lot of extra zeros on those bills!
With the cost of living skyrocketing, it's no surprise that Gen Z is feeling the squeeze and turning to credit cards like never before. Nearly 84% of 22 - 24 year olds now have at least one general-purpose credit card, compared to only 61% of their counterparts a decade ago. Experts say this trend will continue for the foreseeable future, as costs continue to rise and incomes stagnate.
If you’re using your credit card more often than not these days, here’s everything you need to know about not getting into debt. As you enter adulthood, here is a list of good financial practices to adopt that will contribute to financial security. If you don’t know where to start, take our free Money Quiz and get your very own personalized money guide!
Gym Prices Are Rising
Planet Fitness is shaking things up by raising its base-level membership prices for newbies, marking the first hike since 1998. Starting this summer, new members will shell out $15 per month for the Classic card membership, while current members can breathe easy, still snagging their $10 monthly deal.
But why the sudden change? Well, after some serious market testing, Planet Fitness decided it was time for a shake-up. With the gym facing weaker-than-expected revenue in the first quarter and concerns about consumer spending, it's pivoting to meet the times. Meanwhile, competitor Life Time Holdings is flexing strong results, attracting an older, wealthier crowd. Have you ever wondered how gyms make money? We hope you’re better than that.
Don’t forget to adjust those budget planners for these new changes. If you’re still looking for one that will help you save money and get rid of debt permanently, we have just the recommendation for you.
Job Claims Are Jumping
Unemployment filings are making some waves, hitting their highest point since August 2023. The Labor Department reported that initial jobless claims jumped to 231,000 for the week ending May 4, which was more than expected. It's a bit of a surprise, especially after recent reports showed lighter-than-expected job gains in April and a drop in job openings. Looks like the job market might be hitting a bump in the road.
Economists are keeping a close eye on these numbers, and they're a bit concerned about the unexpected spike in claims. Even though the unemployment rate is still below 4%, the recent job data has raised some eyebrows about where the economy might be headed. But despite the uncertainty, markets haven't reacted too wildly just yet. Stock futures are a tad negative, and Treasury yields are mixed, as investors try to figure out what it all means.
With the job market facing so much uncertainty, having an emergency fund ready to roll is super important. Get all our top recommendations that have the highest interest rates here.
MONEY MYTH OF THE DAY
“You must carry a credit card balance to improve your credit score”
Here’s the deal on that old credit card balance myth: you actually don’t need to carry a balance to boost your credit score. Some folks think that keeping a balance and paying it off over time shows you’re responsible with credit. But truth is, your payment history is what really matters to the credit bureaus. Making on-time payments every month is the real golden ticket to building good credit. Carrying a balance can even hurt you because of something called credit utilization — basically, how much of your available credit you’re using. The lower your utilization, the better for your score. Having a reliable credit card suited to your lifestyle will also help you maximize on perks and pay balances off faster. Here are my top recommendations:
- If you like travel, the Capital One Venture X Rewards Credit Card gives you 5x miles per dollar on flights booked through Capital One Travel and 10x miles per dollar on hotels and rental cars booked through Capital One Travel
- If you're a foodie, the American Express® Gold Card gives you 4x Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S (terms apply)
- And if you like spending a lot of your time online, the Chase Sapphire Preferred® Card gets you on dining, select streaming services and online groceries
So, if you want to up your credit game, focus on paying your bills on time and in full each month. And don’t worry about carrying a balance just to impress the credit gods — it’s not necessary, and it might even do more harm than good in the long run.
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Disclaimer: Milan Singh is part of an affiliate network that includes sites like Bankrate.com for coverage of financial products, including credit cards. Milan Singh and these partner sites may receive a commission from card issuers. All recommendations and opinions are the author's own and the content hasn't been reviewed or endorsed by any other entity within this post. This relationship may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers.