The first week following New year’s, and it’s been a busy one. Stocks have remained volatile, congress has struggled to elect the new Speaker of the House, and companies are announcing layoffs. I was hoping for a slow week, but it’s been nothing but. As we start 2023, it’s a great time to reevaluate your finances, set new goals, and update your budgets. Your credit card statements will be arriving soon with all your Christmas shopping, and you’ll want to update your budget and pay off those balances as quickly as possible.
We saw multiple swings in the stock market this week but ended with a massive gain as the market closed Friday up 700 points. While it’s a great way to start the new year, multiple companies this week announced significant layoffs. Amazon stated they’re cutting 18,000, Salesforce may be letting 10% of their employees go, and Meta plans to cut 11,000 jobs. These cuts come when the economy is still trying to find its way. Inflation remains high, costs for goods are soaring, and interest rates have remained the highest over the past two decades.
Traveling for the holidays is pretty routine for most and busy airports are commonplace; however, for Southwest Airlines, it’s been a troubling two weeks. While significant weather concerns were approaching Christmas, it appeared Southwest was more ill-prepared than most. This resulted in massive flight cancellations and delays to airline that generally carries a good reputation among other airlines. This week’s estimates suggested that the holiday debacle could cost the airline over $800 million. Additionally, the airline issued some customers 25,000 reward miles to compensate for likely avoidable situations. While the stock has been on a general decline for the past month, it did some positive trends this week, but Southwest has some serious work to do to regain the trust of its customers.
On the political side this week, there was much turmoil within the House as Republicans worked to elect a new Speaker of the House following mid-term elections. The Republicans have the majority in the House now, and you would have thought selecting a new Speaker would have been already worked out and simply a routine vote, but it wasn’t. It took 15 different votes to elect Kevin McCarthy finally. I bring this up because the lengthy process was due to roughly 20 holdout Republicans, many from the Conservative Freedom Caucus, and worked to gain several concessions from McCarthy. These concessions included restrictions on raising the debt ceiling and implementing a balanced budget. The new Speaker has already discussed the importance of reeling in massive government spending, so we can likely expect the next two years to look significantly different than the past two regarding government spending.
As we move into a new year, it’s a perfect time to start preparing for the upcoming tax season. Many tax documents will be sent out over the next six weeks, so you will want to keep an eye out for those. Additionally, review your preferences on how you receive these documents, as many companies email them now instead of mailing them. Develop a checklist of all expected documents, as this will assist in keeping everything tracked.
Lastly, starting next week, I’ll be publishing a three-part college series focusing on preparing for college, paying for college, and saving for college.