How to wade through the litany of scary financial news to find information you actually need
Spoiler: Literally ignore most of it
I’ve been behind the scenes of personal finance media for a decade, seeing how the industry handles everything from recession fear to inflation to elections to fascist attacks on the structure of our government. On the whole, I’m not impressed.
Personal finance media falls into the trap that plagues all of media: It needs eyeballs to make money, so it publishes stuff that draws eyeballs whether readers need it or not. Our media environment whips us into a frenzy in order to lock us in and make us feel like “being informed” is a patriotic duty we must suffer for.
But this media does very little to truly “inform” us — because, it turns out, information is quite boring in contrast to every piece of entertainment ever created, which is what news competes with online. So the media turns sometimes well-intentioned reports of information into hyperbolic, speculative stories that raise our blood pressure like a monster-truck rally.
Political reporting gets a lot of attention in media critique for its bad behavior and its catastrophic impact on our lives. But it happens across the spectrum. Financial media has always reported stock and business news that weren’t relevant to the average person, but for decades, it had the good sense to exclude the average person from the conversation. In recent years, personal finance for commonfolk has grown in popularity, and publications have taken to reporting financial news as if it’s useful — and necessary — for the average person to consume.
Personal finance media loves to look at trending economic news and ask “how does this affect the average person?” I appreciated this when I was new to the industry; it felt like we were bringing big, macroeconomic topics down to earth for our readers. As I’ve gotten more experience, though, I realize we’re mostly just capitalizing on readers’ fears that some trend might affect them. In most cases, that’s not an accurate way to present financial news, and it’s not honest to offer advice as if macroeconomic trends should drive your personal financial decisions (kind of the opposite, actually!).
You might pay attention to business, financial and economic news for lots of reasons: entertainment, education, politics, empathy for folks around the country? But it’s often presented as information to help you make personal financial decisions, and you shouldn’t use it this way.
All of the information below is important for someone, but usually that someone is an expert in their field — an economist, financial analyst, political scientist, policymaker. The rest of us are missing way too much context to meaningfully put the information to use and are instead usually just frightened by it. For us, macroeconomic trends might be interesting, but they aren’t important. And we’re much better off ignoring them altogether and paying closer attention to information that actually impacts our day-to-day lives.
What you can ignore in financial news
To quiet the noise and calm the frenzy, filter this information out of your day-to-day news consumption.
GDP growth
Do you even know what GDP stands for, how it’s calculated or what it means for the economy at large? Do you know whether you’re reading about nominal or real GDP…? How does this information impact your day-to-day life? Unless you’re a policy wonk for the Fed, let this one go.
Stock values
I’ll risk sounding like a broken record to remind you the average person should not be watching daily stock market ebbs and flows. Personal finance media will repeat this advice ad nauseam out of one side of its mouth while sharing market news out of the other. It might feel important to see big swings in the S&P 500, Dow Jones or Nasdaq — but it mostly just means some rich people got a little more or a little less rich for the day.
Stock market, corporate and business news are for people who work in finance or run corporations. As much as the Jim Cramers of the world claim to empower “DIY investors,” they ignore the fact that every decent financial expert advises against this kind of investing.
Unless you have a stockpile of funds to gamble for entertainment, do not make investment decisions based on daily movements — or projections — in the stock market. And if you’re not using the information, you might as well change the channel.
Federal Funds Interest Rate
This benchmark interest rate is presented as if it’s very important to your borrowing and spending decisions, but it’s not. Have you ever decided not to open a credit card because average interest rates were high? Spent less money? Switched banks?
The Fed rate does impact consumer interest rates — credit card APR, loan rates for mortgages and personal loans, interest you can earn on savings accounts and certificates of deposit (CDs). But all the financial companies move almost in sync with Fed rate changes, so there’s not much impact on your real options as a consumer.
The exceptions are mortgages and CDs — and still in limited cases. If you’re investing a lot of money in CDs, buying when rates are high can help you earn more money.
Because a mortgage is such a large loan for such a long period, the interest rate significantly impacts how much you pay over time. This is less important when you take out a purchase mortgage to buy a home; if you buy homes for living rather than for wealth, adjusting plans according to mortgage rates is usually not feasible. But if you have a mortgage with a high interest rate, you can watch for drops and apply to refinance when rates are lower.
‘Are we in a recession?’ discourse
Economists don’t predict or often even recognize recessions as they’re happening; they define them after the fact. The media has been worrying about a pending recession for about four years for various reasons, but economic indicators have yet to put us there. This talk freaks people out and causes ill-advised money moves as they attempt to control an unpredictable future.
How much can you really prepare for a recession beyond any planning you do for other unknowns? If you have the kind of wealth that’ll be impacted by a recession, make sure your advisors are planning ahead. If not, don’t stress over media conjecture.
Inflation and consumer price trends
You’ll know the price of eggs when you see it at the grocery store. Reporting about price trends around the country doesn’t help you make a meal plan.
Yes, these trends impact your cost of living, but what decisions will you make differently if you know groceries are more expensive in Maine and Oregon and Alabama? Pay attention to the costs you actually deal with day to day, so you can make decisions that work for you.
Closely following the inflation rate is even less useful to the average person. Costs can rise while inflation drops, and costs are what matter to you. If you have a strong influence over raises where you work, maybe check the inflation rate so you can argue for an aligned cost-of-living raise? Otherwise, monthly inflation headlines are just noise you don’t need in your life.
Unemployment and job market trends
Hiring rates, wage trends and unemployment rates describe what’s happening to you. They don’t help you decide what to do.
Knowing hiring trends and typical pay for jobs you want is useful. You can see targeted information about what’s happening in your industry through tools like LinkedIn and Glassdoor, grassroots projects or conversations with your colleagues. Broad job market information doesn’t help you negotiate your next salary.
Anything that’s happening with crypto
Personal finance media loves to talk about crypto when it’s hot! These articles will be buried in the archives whenever crypto values take a nosedive — which is about as often as they rise astronomically.
Cryptocurrencies, like Bitcoin, and related assets, like NFTs (omg remember NFTs??), are speculative investments with limited regulation. They carry value like fine art or Beanie Babies, and their value disappears just as enigmatically. Even more than traditional investments, buying into these markets is more like gambling than sound money management. If you’ve got money to lose, feel free to jump in. If not, ignore crypto chatter and let go of your FOMO.
(The same goes for meme stocks.)
Which news to watch
There are some news items that do, in fact, impact you personally. But news media isn’t always the best source of information on these topics. Useful stuff makes it in, but news media is also rife with speculation and exaggeration. If you’re following the news for these topics, keep a skeptical eye for what has happened and filter out what could happen if…
💡 Some useful sources for financial news, context and timely advice:
Student loan updates
Updates to federal student loan programs directly impact your options for attending college or repaying loans you already carry. Those updates have typically trickled in every few years with new programs from Congress, but student loans have become a hot topic since a Democrat attempted to provide sweeping relief to indebted Americans. Now we face a firehose of rumors and speculation… punctuated occasionally with an actual policy change we have to navigate.
If you’re applying for new loans, experts recommend carrying on as normal with available options. If you’re in repayment, you’ll hear from your servicer when something actually changes — payments are paused or resumed, interest changes, you’re put in a different payment plan, etc. Rather than getting sucked into the news in the name of “staying informed,” make sure your email address is up to date with your loan servicer, and read the emails when they come in.
Tax rule updates
New tax credits and deductions, or the loss of them, impacts the forms you have to file in April. Knowing which credits you qualify for might also help with some financial planning around your refund (if you’re calculating that in your head?).
Any accountant or tax software you use to file taxes will be up to date on these changes, though, so you can probably file your taxes without knowing the latest tax rules yourself. Just make a point to ask your tax preparer about changes for this year and what you can prepare for next year.
Social Security and retirement updates
Social Security news could affect what you’re eligible to receive and when, how you file, and more. These changes probably impact your long-term financial planning, so knowing about them is important.
Again, though, this is something experts know, so you don’t necessarily have to follow the news. A financial planner or Social Security expert can answer your questions and help you adjust your plan as programs or funding change.
Lending policy updates
While interest rate news isn’t all that useful to you, big changes in lending policy might be. For example, the Dodd-Frank Act of 2010 that followed the Great Recession enacted tons of changes to the way lenders operate, including significant mortgage reform. Knowing the effects of this policy for borrowers helps you understand your borrowing options and the protections available to you.
Trending scams and fraud
This is one area that’s useful to pay attention to even when it doesn’t directly affect you, because often the people who are best able to spot scams aren’t the ones who are targeted. Keep an eye out for news of trending scams so you can help alert the vulnerable people around you — older people and disabled people are popular scam targets; student loan borrowers are also a target right now.
Government relief programs
It’s useful to know when your state or federal government is doling out money or services you could benefit from. Think: stimulus checks, unemployment benefit eligibility or expanded tax credits during the pandemic. News media might be your best source of this information, because it’s timely. Knowing you’ve got relief coming is important to help you make short-term financial plans — and to make sure you open your mail!
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👏👏👏 Thank you for this!!
thank you so much for the plug, dana! a very fun surprise as i was nodding my head along with your suggestions for macroeconomic indicators to ignore lol