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DailyFinance.com

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    Stocks Close Down Day After Federal Reserve Leaves interest Rate Unchanged
    Getty ImagesThe recent decline in U.S. equity prices has created some undervalued equities on Wall Street.
    By Peter Ashton

    The past few weeks have seen huge jumps in the level of market volatility as investors have seesawed between bullishness and bearishness on a near-daily basis. The Chicago Board Options Exchange volatility index (^VIX), a measure of market volatility, hit a 52-week high on Aug. 24. Many large-capitalization U.S. stocks find themselves trading 5 percent to 10 percent lower than where they were just a few weeks ago. Although their fundamentals have not changed, many of these stocks now find themselves "on sale" and may represent a buying opportunity for patient, long-term investors.

    We'll use the principles of value investing to search for stocks that now appear undervalued as a result of the recent decline in U.S. equity prices.

    Principles of value investing. Value investing as an investment discipline is not a set of hard-and-fast rules. Rather, it is a set of principles that have been laid down over time by some of the world's greatest investors. We are looking for companies matching the following principles of value investing:
    1. Find companies with a long-term track record of growing revenue and earnings per share. Rather than being concerned with the last quarter's earnings, value investors wish to invest in companies that have displayed a long-term (10 years or more) history of growing their businesses.
    2. Favor companies with low debt. Debt becomes a drag on a company's earnings - especially in the environment of increasing interest rates.
    3. Prefer companies that pay a dividend and ideally have a strong track record of increasing their dividend payouts over time.
    4. Find companies with consistent numbers of shares outstanding. Each time a company issues new shares, it dilutes the equity of existing shareholders. We wish to avoid companies that are constantly issuing new shares.
    5. Most importantly, we wish to find companies which trade below their fair value. Fair value is a concept with many definitions. In his book "One Up on Wall Street," famed value investor Peter Lynch says that a company was fairly valued when its price-to-earnings ratio equaled its historic EPS growth rate. This definition makes intuitive sense, as we should be willing to pay more for a stock that is enjoying a higher rate of earnings growth.
    Although the above are by no means an all-inclusive shopping list for value investors, they do form a useful starting point to screen for value stocks.

    The screen. We used the Recognia Value Analyzer to search for U.S.-traded stocks that display good characteristics of value investing, despite the current run-up in equity prices. Here are the results:

    Priceline Group (PCLN) is an online flight, hotel and car booking service operating under the priceline.com, booking.com, OpenTable and Kayak brands. It has been a high-flying stock for years, but has seen its share price cut by approximately 5 percent in the past month. The stock has a long-term track record of consistently growing its revenue and earnings and has a trailing P/E ratio of 29. On Aug. 5, the company reported second-quarter results that beat analyst expectations for both revenue and earnings. In spite of this, investors have punished the stock, which is trading down by 3 percent year over year.

    Edwards Lifesciences (EW) is a medical equipment company specializing in artificial heart valves. The company has a market capitalization of just more than $3 billion and has a long track record of growing revenue and earnings. Edwards now has a 10-year EPS growth rate of 19 percent. Many biotech stocks enjoyed high valuations prior to the recent period of market volatility and as a result have seen their prices slashed as investors flee risk for safer investments. Edwards is trading down 11.5 percent since achieving a 52-week high on July 29.

    LKQ Corp. (LKQ) is a Fortune 500 company specializing in replacement components and systems for cars and light trucks. LKQ fits many of the classic value-investing principles, with a consistent history of revenue and earnings growth, a low debt and trading below its fair value. After losing approximately 10 percent of its value in the volatile days of late August, LKQ has started to rally back and has made up about half of this amount.

    The investment ideas presented here are for information only. They don't constitute advice or a recommendation by Recognia Inc. in respect of the investment in financial instruments. Investors should conduct further research before investing.

    Peter Ashton of Recognia is a blogger for The Smarter Investor. You can follow him and Recognia on Twitter at @Recognia_Peter and @Recognia.

     

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    Miniature house with a calculator
    Getty Images
    By Brian O'Connell

    NEW YORK -- Adjustable rate mortgages, the bane of consumer advocates and the trap door for hundreds of thousands of homeowners who saw their mortgage payments rise in the heat of the Great Recession, are staging a comeback.

    "Now there are signs that adjustable rate mortgages, which faded out of sight a few years ago, may be achieving a new life of sorts," says Michael Moskowitz, president of Equity Now, a direct mortgage lender in New York. "Some borrowers see them as a way to save money and to make it easier to qualify for a mortgage."

    Mostly, ARMs are rallying around larger mortgages. The Wall Street Journal reports that ARMs comprised 22 percent of all mortgages between $417,000 and $1 million in 2013, but that rate jumped to 31 percent in 2014, and continues to climb.

    Moskowitz says adjustable rate mortgages work best if you only plan to live in a home for a short period of time. In that case, an ARM is worth it.

    "If you have a choice between a 30-year fixed loan at 3.82 percent and a hybrid 5/1 ARM, which stays fixed for five years, at 3.32 percent, the savings over the first five years can save big bucks on mortgage payments," Moskowitz says.

    Those who may want to consider ARMs include those who work for a company that moves people around every five years or so or those who are planning to sell their home in five years and move to Florida, he adds.

    Mortgage lenders also have done a decent job of improving ARM loans, some experts say.

    "ARMs have been unjustly blamed for the meltdown, although there were some truly toxic varieties that have since gone thankfully extinct," says Joe Parsons, managing partner at PFS Funding, a mortgage banking firm located in Dublin, California. "For example, today's ARM -- especially the intermediate term, or 'hybrid' variety -- can be a powerful tool for certain homeowners."

    Parsons explains why.

    First, the rate is significantly lower than for an equivalent fixed rate loan, he says. "A five-year ARM, for example would have a rate of 3.625 percent, where an equivalent 30-year fixed loan would be at 4.125 percent," he says. "For a $300,000 loan, the five-year ARM would have a payment of $1,368, where the 30-year fixed would be $1,454 -- a difference of $86 a month."

    ARMs also carry limitations for the way and amount they can adjust when the fixed period ends.

    "Typically, the adjustments are limited to 2 percent in any given year," Parsons notes. "Loans adjusting today would carry a rate below 3 percent, although that figure will certainly change as the loan indices change. For a buyer intending to remain in a home for a predetermined length of time, that borrower could still save a great deal of money with very little risk."

    Still, as long as the Federal Reserve keeps interest rates low, the mantra for mortgage borrowers may well be "safety first."

    "ARMS really are great for short periods but fixed mortgage rates provide security and, except for last year, fixed rates are at their lowest levels since the 1800's," notes Ken Maes, Northwest divisional vice president of Oregon-based Skyline Home Loans.

    Adjustable rate mortgages may be an acceptable option for sophisticated consumers who have the ability to take action if rates rise.

    Other mortgage experts support that sentiment.

    "Adjustable rate mortgages may be an acceptable option for sophisticated consumers who have the ability to take action if rates rise," says Kevin Stein, associate director of the California Reinvestment Coalition. "But for your average homebuyer, we'd strongly caution against getting locked into an ARM loan where you don't have control over the interest rate."

    If and when interest rates rise, your monthly housing expenses will also rise, which translates to having to cut your expenses elsewhere (if you can) or increase your income -- a difficult proposition in today's economy, he adds.

    Plus, if you think you simply refinance to a lower mortgage loan rate when the ARM ate triggers upward, think again.
    "People may think or be told they can always refinance later when the rate goes up, but there is no guarantee that rates will be lower when a refinance is needed, and refinance loans usually come with some additional cost to the borrower," says Stein.

    Bottomline: So there you have it, mortgage consumers -- adjustable rate mortgages are edging back into the spotlight, and that could be good news or bad news, depending on how you use them.

     

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    Inside A HireLive Retail Job Fair As Initial Jobless Claims Are Released
    Luke Sharrett/Bloomberg via Getty ImagesSteady job growth is just one sign of an improving economy.
    By Simon Constable

    NEW YORK -- The state of the U.S. economy is almost Dickensian: It's the best of times and the worst of times. There are reasons to be bullish as well as reasons to be bearish.

    First, the good news:

    1. The housing market continues to recover, albeit at a moderate pace. Of particular note is the positive trend in home-construction permits. The number issued has grown year-over-year each month since May 2011, with the exception of a slight pullback in March of 2015, according to government data. Housing starts followed a similar pattern.

    Permits are a particularly useful metric because they point to likely future economic activity, since houses require lots of materials such as copper wire, lumber, concrete and glass, as well as appliances. Plus, you need labor to build everything. So when you see a permit issued, it tends to be good news for the economy. In general, the more permits the better.

    If the upward trend keeps going, it would be a boon to companies that supply such products, like those held in the SPDR Materials Select Sector (XLB) exchange-traded fund. Home-builder stocks, like those in the SPDR S&P Homebuilders (XHB) ETF, would do well also.

    2. For big business, getting a loan is easier. "Banks reported having eased some loan terms, such as spreads and covenants, especially for larger firms," according to the Federal Reserve's Senior Loan Officer survey during the summer. There was also stronger demand for such loans from some banks.

    Why does this matter? Loans taken out by businesses are typically used to invest in capital and equipment. They only purchase such equipment when the managers feel optimistic about future economic activity. If they are taking out more loans, they are likely optimistic, and that's good news for the economy.

    3. The labor market continues to improve, and the outlook is good. "The number of private companies intending to hire over the next 12 months is at a post-recession high, which bodes well for the nation's payroll increases overall," according to the Trendsetter Barometer Survey from PwC, a report that measures the outlook by top managers of private companies.

    The data has historically tracked well with what happens in the real economy. In this case, consistent hiring would push the economy into a so-called virtuous circle: New employees spend more, thus boosting the economy further so that more people get hired.

    Still, there are some signs that all isn't well.

    1. The Aruoba-Diebold-Scotti Business Conditions Index, reported by the Philadelphia Federal Reserve, shows a slowing economy for most of 2015. The index is a real-time gauge of the economy, more timely than some other measures, like GDP growth, which can take weeks to produce.

    Its read on the economy is corroborated by The Economic Cycle Research Institute, which notes that the U.S. Coincident Index has been declining all year. Slow growth isn't negative growth, but if you slow down enough, you can fall below zero, so it's worth watching closely.

    2. The risk appetite of investors has declined dramatically. The amount that bond investors need to be paid to lend money to reasonably creditworthy corporate borrowers, versus what they'd be paid by the government, has increased a lot lately. It's known as the credit spread. For those investment-grade bonds rated BBB, the spread has steadily marched higher since mid-May this year, according to the BofA (BAC) Merrill Lynch US Corporate BBB Option-Adjusted Spread data at the St. Louis Federal Reserve. It was 1.8 percentage points in the spring, and now it's 2.2. Historically, wider spreads augur slower growth, but to be fair, this process can take a while.

    3. The manufacturing sector isn't doing well. The Philadelphia Federal Reserve's Business Outlook Survey, which examines the manufacturing sector near Philadelphia, dropped into negative territory this month. The latest reading for the New York Fed's Empire State survey spent a second month below zero as well, indicating contraction.

    While manufacturing is typically much more cyclical than the services sector, there are two issues to be concerned about here: First, is that supply chains for factories are often intertwined across the globe, so the slowdown in China may crimp manufacturing in the U.S. Second, a stronger dollar may crush sales for some manufacturers as it makes their products more expensive to foreign buyers.

    The net worry is that the manufacturing sector pulls the rest of the economy into recession. What happens over the next few months will determine exactly whether the U.S. tilts to faster growth or falls back to a more anemic pace.

    This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

     

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    Man Calculating Home Finances At Table
    Getty ImagesWith these tools you can calculate how much to save for emergencies and organize financial paperwork.
    By Kimberly Palmer

    When Johnny and Joanna Galbraith got married eight years ago, they quickly realized they needed a way to coordinate their spending and saving with each other. "We didn't know what we were doing at the beginning of our marriage, but we opened up a joint checking account to make it easier to communicate," Johnny, 30, recalls. That account only addressed a small subset of their finances, though. "We still needed to find the time to chat about goals and what's motivating us," he says.

    The Gailbraiths, who live in Salt Lake City with their two young daughters and have since founded the money website ourfreakingbudget.com, started tracking their financial accounts through shared Google Drive documents and reviewing them together once a month. To share daily spending with each other, they use the HomeBudget app, which syncs across their phones.

    As the Gailbraiths discovered, managing household finances can be challenging, especially when it requires coordinating multiple people's spending habits and staying on track to meet shared goals. While Mint, a free money management website and app, is often cited as the best starting place, a handful of new tools have hit the market in recent years that give consumers more options.

    A recent cash flow management tool competition hosted by the Financial Solutions Lab, which is funded by JPMorgan Chase (JPM), received almost 300 contenders. "There's been a revolution in personal financial management tools. It's a big trend over the last few years," says Colleen Briggs, vice president of financial capability and consumer initiatives at JPMorgan Chase. "If you give people better information and pair it with a product around their needs, that's where you see people building better habits," she adds.

    Here are more tools that can help you stay on top of your household finances:

    HomeBudget app. The tool embraced by the Galbraiths allows both of them to log in at any time and check out their latest spending updates. "We tried out Mint, but it felt so automatic and easy that we found we weren't checking it often enough and we weren't feeling the pain of our spending," Johnny says. On HomeBudget, Johnny and Joanna, 28, manually enter their spending right after a purchase, and that transaction is then shared with the other person. ​(To keep gifts a surprise, they stay off their accounts for a couple of weeks around the holidays.) They each paid about $5 to download the app to their phones.

    Shared spreadsheets. To track their net worth, including savings, 529 account balances and retirement investments, the Galbraiths update a spreadsheet on Google Drive, which is free and accessible to both of them. It also forces them to sit down once a month to review their accounts and manually update them. They keep account numbers and passwords offline, though, to protect their accounts from potential fraud.

    HelloWallet's emergency savings calculator. While many people know they need to save more, doing so -- or knowing how much they need to save -- is not always easy to figure out. That's why Morningstar's (MORN) HelloWallet, ​an online financial wellness company, recently launched a free tool that allows people to calculate an emergency savings goal for themselves, based on their expenses, lifestyle and earnings.

    "There's a lot of generic emergency savings advice out there to have six months or 10 months of salary saved, and if you think about it, you realize that's pretty insufficient in terms of advice. One person might need that much, and someone else might need far less," says Aron Szapiro, ​policy and finance expert at HelloWallet. ​

    For example, a two-income family that has 80 percent of income going toward fixed expenses needs a much larger emergency savings fund ​than a couple that could live off just one person's salary should a job loss occur. And since most people aren't saving enough for emergencies, Szapiro adds, aiming for a specific target can make it easier and less overwhelming to set money aside.

    FileThis. If you struggle to keep track of an ever-growing collection of financial paperwork, then this tool is for you. Co-founder Brian Berson was inspired to create a digital way of organizing financial papers after finding himself suddenly in charge of his mother's paperwork when she became ill. ​"[My family] had to go through four huge filing cabinets of paperwork and figure out what we needed," he says. After mistakenly tossing documents and then having to ask financial institutions to resend them -- a process that took hours -- he decided to create FileThis in 2011.

    "It's a digital filing cabinet," he explains, and​ it automatically uploads financial account information, bills, W-2s, health insurance information, tax documents and other essential paperwork from banks to insurance companies​. All the data is encrypted and can be downloaded (or deleted) at any time. The "freemium" model offers free automatic uploads from up to six institutions and then costs $2 a month for up to 12 connections to institutions​. The rates go up from there for consumers who want more connections. While FileThis doesn't disclose its number of users, Berson says the number has grown 500 percent over the past year.

    Puddle. Aimed at consumers with limited access to traditional credit sources, Puddle, one of the winners of the Financial Solutions Lab competition, makes it easy to borrow and lend money to friends, family members and other users through small, short-term loans.​ "Sometimes people just need extra cash for things -- a lot of people borrow for travel -- and [Puddle] establishes a line of credit for people who need it," says Skylar Woodward, one of the co-founders of Puddle. Over $1 million has been borrowed through the website, with amounts ranging from $250 to $2,000 for periods between three and six months. Most Americans, Woodward adds, don't have access to liquid cash when they need it, and this tool meets that need. ​

    The goal of all these tools is to make managing finances easier and more automatic, so you can spend your time on more enjoyable activities. As Johnny Galbraith puts it, "There's 100 Netflix shows that we'd rather watch than talk about finances." But they use their motivation to save as a way to power through those important conversations. "Wouldn't it be great if we could save for our girls' college education now when we don't have a lot of other expenses, or save for retirement or vacation?" Those discussions, he says, leads them to set mutual savings goals, which helps guide their daily spending choices in a relatively painless way.

    Kimberly Palmer is a senior editor for U.S. News Money. She is the author of the new book, "The Economy of You." You can follow her on Twitter @alphaconsumer, circle her on Google Plus or email her at kpalmer@usnews.com.

     

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    Volkwagen Brand in Tatters
    Michael Sohn/AP
    By GILLIAN FLACCUS and TOM KRISHER

    LOS ANGELES -- Bob Rand bought his Volkswagen Passat last year for its clean emissions and high gas mileage. He liked the car so much he convinced his son and a friend to buy one, too.

    Now, as Volkswagen comes clean about rigging diesel emissions to pass U.S. tests, Rand is desperately trying to sell the fully loaded model with white leather seats for $10,000 below what he paid. His sole bite has been from a man who offered $7,500 on speculation that he could resell it in Mexico.

    That's probably about as bad a thing as a company can do is lie to your face when you're buying a $35,000 car.

    "Volkswagen was somebody that you could rely on for cutting-edge products and quality and all those things and now you find out that they're not above lying just flat out," said Rand, who plans to join a class-action lawsuit against VW. "That's probably about as bad a thing as a company can do is lie to your face when you're buying a $35,000 car."

    Rand's anger at the world's top-selling car company was echoed Wednesday by private dealers, auto wholesalers and owners across the U.S. as fallout from the smog test trickery mounted.

    The U.S. Environmental Protection Agency first disclosed Friday that stealth software makes VW's 2009-2015 model cars powered by 2.0-liter diesel engines run cleaner during emissions tests than in actual driving. On Wednesday, Volkswagen CEO Martin Winterkorn resigned and took responsibility for the "irregularities" found by U.S. inspectors -- a scandal that has wiped out billions in the company's market value and raised the possibility of criminal investigations and billions more in fines.

    The revelations left dealers sitting on hundreds of diesel cars they could not sell. Many also dealt with a flood of angry calls, emails and tweets from Volkswagen owners who felt betrayed because they believed they had bought a car that polluted less without sacrificing the good gas mileage and performance that comes with a diesel engine.

    "I think their feet should be held to the fire. I think apologies don't mean anything when something is so premeditated," said Joe DeCarolis, of Cary, North Carolina, who owns a 2012 TDI Jetta Sport Wagon -- a car he bought after careful comparison shopping for its clean emissions and good gas mileage.

    Dealers can't give customers good answers because Volkswagen hasn't said a whole lot, said AutoNation (AN) CEO Mike Jackson, the leader of the largest auto dealership chain in the U.S.

    'Needing Answers'

    AutoNation's six Volkswagen and eight Audi dealerships in the U.S. are telling customers that the cars are safe to drive and promising to call them as soon as they know more about repairs. "That's not adequate," Jackson said. "We need answers by next week."

    A lot of people within VW had to know about the software that turned emissions controls on during government tests and off for regular driving, especially because the scheme went on for multiple years, Jackson said.

    "This tells me that it's not a bad apple. It's not a rogue employee. It's deliberate deception," Jackson said. "It's a systemic failure. This took a lot of meetings. This took a lot of engineers. This took a lot of software programmers to put in place and keep in place."

    Meanwhile, concern was growing at private dealerships about what to do with inventory that's now gathering dust.

    At Volkswagen of Oakland, California, nearly two dozen new diesel cars have no chance of being sold in the short-term, while 25 2016 model vehicles are being held up at the Port of San Diego because they can't pass emissions standards, sales manager Chris Murphy said. Customers have been calling and emailing to demand the dealership buy their cars back or offer refunds.

    "We can't afford to buy all those cars back. We're just one dealer," he said, adding that diesel models make up about 30 percent of the business. "This is definitely going to impact our business. We're trying to focus on positive, not negative things because there's nothing we can do."

    Volkswagen has taken steps to help out the dealership, Murphy said. That includes guaranteeing reimbursement for sales objectives for two quarters whether or not the goals are met and waiving the interest the local franchise normally pays on unsold cars on their sales floor, he said.

    'Making the Right Steps'

    "They're making all the right steps. ... I'm just waiting for everything to get uncovered to see how deep this really goes. I'm not mad at anyone except the people higher up who made these decisions," Murphy said.

    Lash Volkswagen of White Plains, New York, will accommodate affected Volkswagen owners by giving them loaner cars and picking up or dropping off their cars when it's time for repair, said Tom Backer, general manager of the dealership in New York's Westchester County.

    Dealers, he said, were told that there will be both software and hardware changes to fix the problem. They're already on 2016 models and are awaiting approval from the Environmental Protection Agency, Backer said. Older models will get the same fixes, he said.

    "What we say is, 'Let's wait a little bit and see how exactly this all shakes out,' " Backer said.

    But not every Volkswagen dealer is fielding calls from angry customers.

    Bill Haggerty, a sales manager at a VW dealership in the Chicago suburb of Oak Lawn, Illinois, said he hasn't heard concerns from customers so far. Diesels make up less than 20 percent of his business and draw the most interest from customers looking for better gas mileage, he said.

    "We have 200 Volkswagens in stock; three of them are Jetta diesels," he said. "So, it's not like every Volkswagen out there has got a diesel motor in it. They sell an awful lot of cars with good gas mileage and great safety records."

    -Krisher reported from Detroit. Associated Press reporter Jason Keyser in Chicago contributed to this report.

     

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    durable goods orders august economy
    Charlie Riedel/APA worker inspects a 2015 Ford F-150 truck at the company's Kansas City Assembly Plant in Claycomo, Mo.
    By MARTIN CRUTSINGER

    WASHINGTON -- Orders for long-lasting U.S. manufactured goods dropped in August with weakness in a key category that tracks business investment plans.

    Orders for durable goods fell 2 percent last month in contrast to July when orders had risen by 1.9 percent, the Commerce Department reported Thursday. A key category that serves as a proxy for business investment edged down 0.2 percent last month after gains of 2.1 percent in July and 1.5 percent in June.

    The underlying demand for manufactured goods has been weaker this year as a strong dollar and China's economic slowdown have dragged down demand for American exports and big declines in oil prices have resulted in cutbacks in investment by energy companies.

    Still, economists said the 2 percent August decline overstated the weakness in manufacturing because much of the drag last month came from a huge 19.3 percent fall in orders for defense equipment, an extremely volatile category. Excluding defense, orders would have dropped a smaller 1 percent in August.

    Paul Ashworth, chief U.S. economist for Capital Economics, said the small 0.2 percent setback in the business investment category had been expected given the strong gains in this area in the previous two months.

    "Investment in equipment appears to be recovering in the third quarter," Ashworth said in a research note.

    For August, demand for commercial aircraft fell for a second month, dropping 5.9 percent after an 8.7 percent decline in July. In June, this volatile category had shown a 69.9 percent increase.

    Orders for motor vehicles and parts fell 1.6 percent after gains in the two previous months.

    Orders outside of the transportation categories were flat in August after a modest 0.4 percent rise in July,

    Demand for machinery was up 1 percent but orders for computers fell 5.7 percent.

    The Institute for Supply Management said that its manufacturing index slid to a reading of 51.1 in August, its lowest level since May 2013. It was the second straight drop for the manufacturing index. Anything above 50 signals growth.

    The rising dollar makes U.S. goods more expensive in foreign markets while weakness in China, the world's second biggest economy, also serves as a drag on the global economy.

    The overall economy, as measured by the gross domestic product, grew at an annual rate of 3.7 percent in the April-June quarter, an estimate that will be revised on Friday. Private economists believe the GDP estimate for the second quarter will be unchanged at 3.7 percent, which represented a sharp increase after an anemic 0.6 percent increase in the first quarter.

    Economists are forecasting that growth in the current July-September quarter will slow slightly to around 2.5 percent, reflecting in part an effort by businesses to trim their stockpiles after a big rise in inventories in the spring.

     

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    A Caterpillar Inc. Equipment Dealer Ahead Of Earnings
    Daniel Acker/Bloomberg via Getty Images
    By Lisa Von Ahn

    Caterpillar (CAT) slashed its 2015 revenue forecast Thursday and said it will cut as many as 10,000 jobs through 2018, joining a list of big U.S. industrial companies grappling with the mining and energy downturn.

    Shares of Caterpillar tumbled as much as 8 percent to a five-year low, pulling down the sector and knocking as much as 37 points off the Dow Jones industrial average (^DJI).

    Over the past year, miners and energy companies have chopped budgets and put expansion projects on hold as prices of raw materials such as crude oil, copper, coal and iron ore have plunged to six-year lows amid lingering worries about oversupplies and China's slowing economic growth. As a result, orders for equipment have dried up.

    Peoria, Illinois-based Caterpillar, the world's biggest construction and mining equipment-maker, has also been hit by a slowdown in industrial activity in China.

    S&P Capital IQ analyst Jim Corridore termed the restructuring "a strong reaction" to market conditions.

    "The company has shown a lack of revenue growth in the last few years [and] earnings are in a decline," he said. "That definitely puts pressure on the CEO to find a way to react to the environment, which at this time shows no near-term catalyst for improvement."

    Earlier this month, mining equipment-maker Joy Global (JOY) issued a profit warning as it struggled to adapt to slowing demand for its services.

    Deere & Co. (DE), the world's largest maker of farm equipment, announced layoffs of more than 900 plant employees in January as declining grain prices have hurt demand for agricultural machinery.

    Caterpillar had raised its 2015 profit forecast in April and affirmed it in July.

    "That they had hung in with their guidance for so long was probably the most surprising, given the ... accumulating evidence around them that things were slowing," said Morningstar analyst Kwame Webb.

    Caterpillar expects revenue to fall in 2015 for the third straight year, to $48 billion, below the average analyst estimate of $48.82 billion, as compiled by Thomson Reuters I/B/E/S.

    For 2016, the company forecast a 5 percent revenue decline, mainly in higher-margin products, to about $45.6 billion. Analysts had expected $47.36 billion.

    Caterpillar said it will update its 2015 profit forecast when it releases third-quarter results in late October. It expects to provide a 2016 earnings outlook in January.

    'Way, Way Too Much Capacity'

    "We are facing a convergence of challenging marketplace conditions in key regions and industry sectors -- namely in mining and energy," Chief Executive Officer Doug Oberhelman said in a statement.

    Caterpillar's announcement was no surprise to Bill Hickey, president of Chicago-based steel-mill operator Lapham-Hickey, which supplies the company's road construction and road equipment operations.

    "There is way, way too much capacity worldwide, and the question is, how long will the cycle last?" he said. "Our best guess is that there is going to be oversupply on steel and other commodities until maybe late next year."

    Caterpillar said it will cut 4,000 to 5,000 jobs by the end of 2016, most of them coming in 2015. It has already reduced its workforce by more than 31,000 since mid-2012.

    The company had 114,233 employees as of Dec. 31, 2014 according to Thomson Reuters (TRI) data.

    Caterpillar expects to incur about $2 billion in pretax costs from the restructuring and save about $1.5 billion annually.

    Caterpillar said it might close or consolidate more than 20 plants around the world across its three large businesses -- construction, resources, and energy and transportation.

    "2016 would mark the first time in Caterpillar's 90-year history that sales and revenues have decreased four years in a row," the company said in a statement.

    It last reported annual revenue growth in 2012, the first full year after it bought heavy equipment-maker Bucyrus International in its largest acquisition ever.

    Caterpillar's 2015 revenue forecast represents a 27 percent drop from 2012. Wall Street's net income outlook for this year is 50 percent lower than the company's 2012 profit.

    Shares of Caterpillar, which already had fallen 23 percent this year, were down 6.3 percent at $65.81 in afternoon trading. The S&P Industrials Index fell 0.7 percent.

    The company's market value was about $39 billion Thursday, down from nearly $60 billion at the end of 2012.

    -With reporting by Meredith Davis and Nick Carey in Chicago, and Ankit Ajmera and Sweta Singh in Bangalore.

     

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    GERMANY-US-STOCKS-AUTOMOBILE-ENVIRONMENT-VW
    Odd Andersen, AFP/Getty ImagesCEO of Porsche Matthias Mueller, left, Volkswagen CEO Martin Winterkorn, who resigned Wednesday, at the 66th IAA auto show last week in Frankfurt, Germany.
    By Andreas Cremer

    BERLIN -- Volkswagen (VLKAY) will name Matthias Mueller, the head of its Porsche sports car brand, as its chief executive as it tries to recover from a scandal over its rigging of U.S. vehicle emissions tests, a source close to the matter said Thursday.

    Mueller, 62, has been widely tipped to succeed Martin Winterkorn, who quit Wednesday, when the German carmaker's supervisory board meets Friday, and will take responsibility for the biggest business crisis in Volkswagen's 78-year history.

    We have been informed that also in Europe, vehicles with 1.6 and 2.0 liter diesel engines are affected by the manipulations that are being talked about.

    Shares in the world's largest carmaker by sales have plunged as much as 40 percent since Friday, when U.S. regulators said it had admitted to fitting software on hundreds of thousands of diesel cars to detect when they were being tested, and alter the running of their engines to conceal their true emissions.

    The crisis deepened Thursday, when Germany's transport minister said Volkswagen had manipulated tests in Europe too.

    "We have been informed that also in Europe, vehicles with 1.6 and 2.0 liter diesel engines are affected by the manipulations that are being talked about," Alexander Dobrindt told reporters, adding it was unclear how many vehicles in Europe were affected.

    Volkswagen has said 11 million cars globally had the software fitted, but it wasn't activated in the bulk of them. As well as the cost of regulatory fines and potentially refitting cars, Volkswagen faces criminal investigations and lawsuits from cheated customers and possibly shareholders.

    More immediately, the new CEO will have to restore the confidence of customers and car dealers, who have expressed frustration at a lack of information about how they will be affected by the scandal.

    Mueller has a majority on the 20-member supervisory board, the source said. Volkswagen declined to comment.

    The board will also dismiss the head of the company's U.S. operations and top engineers at its Audi and Porsche brands, a senior source told Reuters, as it seeks a fresh start.

    "He is a good choice even though he may be seen as a transitionary CEO until another internal candidate such as VW brand CEO [Herbert] Diess has earned their stripes," Arndt Ellinghorst, an analyst at Evercore ISI investment banking advisory firm, said of Mueller.

    The new CEO's priority would be to renew Volkswagen's leadership, restructure costs and create a "performance-driven company" where management was more accountable," he added.

    Pressure

    Mueller, who has worked for parts of the Volkswagen empire since the 1970s, is a management board member of Porsche SE and so is close to the Piech-Porsche family that controls Volkswagen through the holding company.

    The company is under pressure to act decisively, with German Chancellor Angela Merkel urging it to quickly restore confidence in a business held up for generations as a paragon of German engineering prowess.

    "There will be further personnel consequences in the next days and we are calling for those consequences," Volkswagen board member Olaf Lies told the Bavarian broadcasting network.

    The research and development chiefs of Audi and Porsche, Ulrich Hackenberg and Wolfgang Hatz, will be removed by the supervisory board, as will Volkswagen's top executive in the United States, Michael Horn, the senior source told Reuters.

    Hackenberg and Hatz had both held senior posts at VW in development, including of engines, before they switched to Audi and Porsche. They are among Volkswagen's top engineers.

    Horn acknowledged this week that the company had "totally screwed up" by deceiving U.S. regulators about how much its diesel cars pollute.

    The scandal has sent shockwaves through the car market, with manufacturers fearing a drop in demand for diesel cars and tougher regulations and customers worrying about the performance and re-sale value of their cars.

    Dobrindt said Europe would agree new emissions tests in coming months that should take place on roads, rather than in laboratories, and that random checks would be made on all manufacturers.

    The European Commission urged all member states to investigate the use of so-called "defeat devices" by carmakers to cheat emissions tests and said there would be "zero tolerance" of any wrongdoing.

    So far, no other carmaker has been found to have used the devices. German rival BMW said Thursday it had not manipulated tests, after a magazine reported some of its diesel cars were found to exceed emissions standards.

    Drivers Worried

    Friday's board meeting had originally been due to extend the contract of Winterkorn and set out a new management structure.

    Though Winterkorn oversaw a doubling in sales and a near tripling in profit during his eight-year reign, he faced criticism for Volkswagen's underperformance in the United States and for a micro-management style that critics say delayed model launches and hampered its ability to adapt to local markets.

    Analysts said a new management structure, possibly more decentralized but also with a clearer system of checks, was all the more urgent, with top executives apparently unaware of the emissions test cheating despite a tight control on decisions.

    They also called for more transparency, particularly in North America, where NordLB analyst Frank Schwope said Volkswagen hadn't published earnings figures since 2007.

    Two sources close to the matter said Volkswagen would create a special position for the United States on its management board Friday, with the head of its Skoda brand, Winfried Vahland, the favorite to get the job.

    The new CEO will also need to improve its communications with dealers and customers, with many frustrated that Volkswagen has yet to say which models and construction years are affected by the crisis and whether cars will have to be refitted.

    "We are getting lots of phone calls asking 'What is the likely impact of this?'" said an insider at a major Volkswagen dealership in Britain, who declined to be named.

    "But we are not getting anything from Volkswagen, so we don't have anything to pass on to them."

    Volkswagen said in a statement on its website it was working to answer these questions as quickly as possible. "It goes without saying that we will take full responsibility and cover costs for the necessary arrangements and measures," it said.

     

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    Dow Soars Over 250 Points Ahead Of Fed Interest Rate Announcement
    Getty Images
    By Sinead Carew

    NEW YORK -- U.S. stocks closed lower Thursday in a volatile session on uncertainty about U.S. monetary policy and global economic growth, while market heavyweight Caterpillar cut in its sales forecast and health care investors fled for the exits.

    Six of the 10 major S&P sectors were lower, with the health sector's 1 percent fall leading the S&P declines and the Nasdaq biotech sector down 2 percent. Both health care indexes had their fifth straight day of losses.

    While the broader market pared losses somewhat in the afternoon, investors were cautious ahead of a speech by Federal Reserve Chair Janet Yellen, which could provide clues regarding the timing of an increase in U.S. interest rates.

    Yellen, due to deliver an inflation speech at 5 p.m. Eastern time, had cited concerns about slowing global growth as a key reason for holding off from a long-anticipated Fed rate hike last Thursday.

    Several investment strategists said Thursday that the market is on its way to retesting the lows of Aug. 24, when shares tanked due to a panic about slowing growth in China.

    "From a technical point of view, you have to test that low. Whether it's issues abroad or not being so sure about what's going on here in the U.S. with rates, we need to go lower," said Jeffrey Frankel, co-president of Stuart Frankel & Co. in New York.

    Almost 7.7 billion shares changed hands on U.S. exchanges, above the average of 7.5 billion in the previous 20 sessions according to Thomson Reuters (TRI) data.

    Shares in Caterpillar (CAT), the world's biggest mining and construction equipment maker, closed down 6.3 percent at $65.80, making it the biggest drag on the Dow and the third-biggest weight on the S&P 500. Caterpillar said it could cut up to 10,000 jobs as it faces challenging conditions in key regions and the mining and energy sector.

    "The [Caterpillar] news is not helping matters, it's emblematic of a weaker global economy," said Joseph Quinlan, chief market strategist for U.S. Trust, in New York.

    The Dow Jones industrial average (^DJI) fell 78.57 points, or 0.5 percent, to 16,201.32, the Standard & Poor's 500 index (^GSPC) lost 6.52 points, or 0.3 percent, to 1,932.24 and the Nasdaq composite (^IXIC) dropped 18.27 points, or 0.4 percent, to 4,734.48.

    'Fear Gauge' Rises

    The CBOE Volatility index, known as Wall Street's "fear gauge," settled up 6 percent at 23.47, compared with its long-term average of 20.

    Gilead Sciences (GILD) was the biggest drag on the S&P 500. Health care stocks have been under pressure since Hillary Clinton, the leading U.S. Democratic presidential candidate, vowed earlier this week to stop "price gouging" by drug companies.

    Utilities were the strongest sector with a 0.8 percent rise, while the energy index eked out a 0.4 percent gain. U.S. crude oil settled higher in what was also a volatile day for the commodity.

    A gauge of U.S. business investment plans fell slightly in August, jobless claims barely rose last week, and new single-family home sales rose more quickly than expected in August.

    NYSE declining issues outnumbered advancers on the NYSE by 1,816 to 1,235, for a 1.47-to-1 ratio; on the Nasdaq, 1,529 issues fell and 1,244 advanced, for a 1.23-to-1 ratio favoring decliners.

    The S&P 500 posted no new 52-week highs and 69 new lows; the Nasdaq recorded 25 new highs and 184 new lows.

    -Tanya Agrawal contributed reporting from Bangalore.

    What to watch Friday:
    • The Commerce Department releases second-quarter gross domestic product at 8:30 a.m. Eastern time.

     

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    Views Of The Comic-Con International Convention
    Patrick T. Fallon/Bloomberg via Getty ImagesThe Lego Dimensions toys-to-life video game is demonstrated during July's Comic-Con International convention preview in San Diego.
    Lego fans and parents of Lego fans know how easy it is to blow through some serious dough in amassing a collection of the brick-building playthings, and now the Denmark-based company is aiming for the pocketbooks of gamers, too.

    "Lego Dimensions" hits stores Sunday, offering owners of Xbox One, PS4, Wii U and Xbox 360 systems a new way to engage with the objects that they create. Lego-licensed video games have been popular for years, but "Lego Dimensions" is different in that it incorporates actual brick figures into the gaming experience.

    The starter pack retails for $99.99, and it includes the console video game disc as well as three microchip-backed figures and the "toy pad" platform that connects to the gaming system. Players then place any of the mini-figures on the pad and the characters come alive in the game.

    If Something Works, Copy It

    If the process sounds familiar, it's because Activision Blizzard (ATVI) and Disney (DIS) have similar products in which action figures unlock access to virtual gaming realms through a video game system.

    Activision Blizzard -- the software publishing giant behind "Call of Duty" and "World of Warcraft" -- ushered in the format when it released "Skylanders" in late 2011. Disney followed two years later with "Disney Infinity," letting fans play as Disney, Marvel and now even Star Wars characters.

    It works, and as anyone who has played "Skylanders" and "Disney Infinity" knows, it's the desire to broaden the gaming experience with expansion packs that really starts eating away at the wallet. "Lego Dimensions" comes with Batman, Wyldstyle from "The Lego Movie" and Gandalf from "The Lord of the Rings," but additional characters with accessories can be purchased for less than $30 apiece. The accessories are important because players can bring up to seven vehicles or gadgets into the toy pad. It's also where traditional Lego fans can put their brick-building skills to use, since the actual action figures don't pose much of an assembly challenge.

    Expansion Packs Make Wallets Contract

    "Lego Dimensions" is going to be a hit, and outside of perhaps some retailer-subsidized Black Friday deals in November, you're probably not going to be paying a lot less than the retail price for the starter kit.

    The price cuts will come, but likely not until next year. We've seen prices for "Skylanders" and earlier generations of "Disney Infinity" get marked down, but that only typically happens once sales start to cool off. That's obviously not going to happen for Lego's latest toy line anytime soon.

    If you're going to pay full price, you may as well milk the most that you can out of it. There are apparently plenty of adventures packed in the starter kit and expansion packs, so exhaust all of the fun there before feeding another Lego addiction. Get ready to build something cool on your TV.

    Motley Fool contributor Rick Munarriz owns shares of Walt Disney. The Motley Fool owns and recommends Activision Blizzard and Walt Disney. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.

     

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    Markets React To Fed Interest Rate Announcement
    Getty ImagesThe Fed's October or December meetings are likely the next time for a potential rate hike.
    By Kira Brecht

    Unless you've had your head under a rock, you probably heard the Federal Reserve didn't change its interest rate policy at its meeting last week. Now that the dust has settled and the TV talking heads have quieted down, let's take a look at what the still ultra low interest rate environment could mean for stock investors.

    The bull market in stocks is not over. The current rising trend in U.S. stocks began at the March 2009 low in the Standard & Poor's 500 index. While concerns about a slowdown in Chinese economic growth and what that could mean for the U.S. economy have triggered significant volatility in U.S. equity markets in recent weeks, the stock market bull is not dead yet, analysts say.

    Even when the Federal Reserve does finally increase the federal funds rate from its ultralow zero to 0.25 percent, where it has been stuck since December 2008, the end of the rising equity trend will not be at hand. "There have been nine rate hike cycles since 1950. In eight of the nine cycles, stocks are up an average of 10 percent in the year after the first rate hike," says John Canally, vice president and economist at LPL Financial, a Boston-based broker-dealer.

    The first Fed rate hike is not the end of the bull market and it's not the end of the expansion.

    Economists now point to the Federal Reserve's October or December meetings as the next likely time for a potential rate hike, but Canally downplays the overall impact for the stock market. "The first Fed rate hike is not the end of the bull market and it's not the end of the expansion."

    High-yield dividend stocks remain attractive. With interest rates remaining at historically low levels, fixed-income investors don't get paid much to save in traditional certificates of deposit or even in T-bills, notes or bonds. "The zero interest-rate policy is killing seniors, savers and retirees," says Chris Bertelsen, chief investment officer at Global Financial Private Capital, a Sarasota, Florida-based wealth management firm.

    He points to the beaten-down energy stock sector as a potentially attractive area of the market to consider, especially with the Fed holding down interest rates for now. "The large oil companies like ConocoPhillips (COP), ExxonMobil (XOM) and Chevron (CVX) are attractive because of their yields," Bertelsen says. "I wouldn't be afraid to look for something with a little higher yield, like Duke Energy (DUK) or Southern Co. (SO), because the Fed is still on hold."

    Consider international exposure. At its latest policy-making meeting last week, the Fed downgraded a bevy of its forecasts, which included lower interest rates, lower inflation and even lower overall economic growth. The central bank projected that the U.S. economy will expand by 1.8 to 2.2 percent over the long run, versus previous growth forecasts of 2 to 2.3 percent.

    While economists have worried of late about a slowdown in China, overall economic growth there is still strong compared with the U.S.

    Credit Suisse (CS) forecasts U.S. GDP growth at a 2.6 percent pace in 2015, versus a 6.8 percent in China and 8.1 percent in India. "Long-term investors looking five to 10 years out may want to start adding emerging market exposure. Their economies will still grow three times faster than our economy over the next five years," Canally says.

    Be selective. It's a stock picker's market now. The current environment, ripe with uncertainty over the timing of the first interest rate hike and the state of the Chinese economy, means this "is going to be a stock picker's market. If you are a long-term investor, there are opportunities to be selective in the right places," says Jeff Carbone, senior partner at Cornerstone Financial Partners, a wealth management firm in Charlotte, North Carolina.

    Eye on the Upside

    Carbone points to the recent correction in stock prices as an "opportunity to average in and buy at a lower point." He highlights the consumer discretionary, technology and health care sectors as areas that "should give you upside" in the current environment.

    The consumer discretionary sector includes companies that sell nonessential services, such as automotive, restaurants, hotels, leisure equipment and consumer retailing services.

    "The lower oil prices can help the consumer discretionary sector," says Bill Northey, chief investment officer at U.S. Bank's Private Client Group in Minneapolis. More cash in consumers' pockets means they could be spending more on items they normally wouldn't.

    Northey also is favorably disposed to the technology sector, as it "still represents opportunity for material earnings gains," he says. The health care sector has benefited from a wider demographic base in the wake of the Affordable Care Act, as more insured means increased demand as more people have access to health care.

    While the Fed failed to deliver any blockbuster news, investors can now refocus on the true fundamentals of the market. "Get back to assessing company earnings," Northey says. Third-quarter earnings results will start hitting the market by the end of September. He still expects stocks to end the year higher than current levels, with a 2,100 year-end target for the S&P 500 (^GSPC).

     

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    US-POLITICS-HEALTH
    Karen Bleier, AFP/Getty Images
    Q. I saw a study that said a lot of people who qualify for the Obamacare cost-sharing subsidy aren't taking advantage of it. How do I know if I qualify?

    A. If your household income is less than 400 percent of the federal poverty level (for 2015 plans, that's $46,680 if you're single or $95,400 for a family of four), you qualify for a government subsidy to help pay your health insurance premiums if you buy coverage through your state's health insurance exchange. If your household income is less than 250 percent of the federal poverty level ($29,175 if single or $59,625 for a family of four), you can get an extra break: a cost-sharing subsidy that reduces your deductibles, coinsurance and co-payments when you receive care. You can get the extra cost-sharing subsidy only if you buy a silver-level policy on the exchange; you won't get the break if you buy a bronze-, gold- or platinum-level policy.

    The study you saw, by Avalere Health, discovered that more than 2 million people who bought coverage on the exchanges and are eligible for the cost-sharing subsidy aren't receiving that extra benefit because they didn't sign up for a silver policy. They may have chosen a bronze-level policy during open enrollment because the premiums were lower, but if they have even a few medical expenses, they could end up paying less out of pocket by the end of the year by choosing a silver plan with cost sharing.

    You generally can't switch policies until open enrollment in the fall unless you've experienced certain life changes (such as getting married, having a baby, losing other health coverage, moving, or experiencing changes in income that affect your eligibility for a subsidy). See the Special Enrollment Period tool for more information. But the cost-sharing subsidy is important to keep in mind when picking a plan for 2016 during open enrollment, which runs from November 1 through Jan. 31. Don't just compare premiums; compare your out-of-pocket costs for your typical drugs and medical care, and factor in the value of the cost-sharing subsidy if you qualify for it.

    Insurers automatically apply the cost-sharing subsidy if you qualify. They can use the cost-sharing subsidy to reduce the deductible or limit co-payments or coinsurance rates for medical care and prescription drugs. Insurers must limit the maximum amount you can spend out of pocket for the year to $2,250 to $5,200 for individual plans (the limit is based on your income) or $4,500 to $10,400 for family plans. (Without the cost-sharing subsidy, the out-of-pocket maximum for policies sold on the exchanges can be up to $6,600 for individual coverage and $13,200 for family plans.) Compare each plan's details at your state exchange website. You can find links at www.healthcare.gov.

     

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    lifebuoy with dollars
    Getty Images
    By Rebecca Reisner

    Ah, the emergency fund.

    That cushion of cash you're so glad to have when your company announces it's downsizing staff, or when your plumber tells you that the water stain on the ceiling is coming from a giant leak behind the walls.

    These unexpected life "surprises" are the reason we at LearnVest advocate having one month of your take-home pay in a rainy day fund before tackling any other financial goals -- including big ones like paying off a credit card.

    Even better? Working your way up to six months of take-home pay -- or nine months' worth, if you're self-employed.

    But even if you're hovering closer to the one-month-of-pay mark, consider yourself ahead of the pack: A 2015 Bankrate Money Pulse poll found that only 38 percent of respondents had enough savings to be able to cover even a small disaster, like an emergency room visit or a car repair.

    And once you've joined the ranks of those who've reached their emergency savings fund goal, you hope, of course, that everything remains peachy enough to leave that rainy day stash untouched.

    But if a disaster actually does happen, how do you go about, well, touching it?

    According to financial pros, it all depends on the cost of your mishap and the size of your emergency savings.

    For added insight, we asked LearnVest Certified Financial Planner Matt Shapiro to assess three common hypothetical "I need to tap my emergency fund" scenarios and offer advice for how to draw down from a rainy day fund wisely.

    Scenario No. 1: The Sputtering Transmission

    Nick, 25, earns $41,000 a year as a computer help desk technician. After two years on the job, he's managed to build an emergency fund of $2,500, which is about a month of his take-home pay.

    He wants to keep growing his cushion, but his 10-year-old coupe gets in the way. The car needs a rebuilt transmission -- a $2,800 job that his mechanic says should buy the vehicle another few years.

    Nick could pay for it by tapping his entire emergency fund and siphoning an additional $300 from his checking account -- which would mean cutting back on some happy hours and takeout for the month.

    But he has a good credit rating, which has kept the annual percentage rate on his credit card low, so he could also charge all or some of the $2,800, paying the balance off over several months.

    What the financial planner says: First and foremost, Nick should avoid using a credit card to finance the transmission repair.

    "If it took him two years to save $2,500, it's going to be hard for him to pay off a credit card balance of $2,800, with an APR of something like 10 percent -- which will amount to a few hundred dollars in interest," Shapiro says.

    So Shapiro's preference would be for Nick to tap his entire $2,500 emergency fund, and squeeze the $300 from his current budget -- and then work on rebuilding the fund as soon as possible.

    "I'd really like to see him cut back on flexible expenses, or work some overtime to build it more quickly [than over two years]," Shapiro says. "I'd suggest he aim for putting away at least 8 percent of his income." That would work to replenish his emergency fund in about a year.

    Another option? If his car may need more repairs in the future, Nick could consider buying a used car for about the same amount it would cost to fix his coupe now.

    "If he can trade in his current car, and get a new one for $2,000 or so, that might be a solution," Shapiro says. "Twenty-eight hundred dollars seems really expensive to fix an old transmission."

    Scenario No. 2: The Fallen Oak

    Meeting planners Andrea and Bruce, both 33, have a combined annual income of $120,000. They earn roughly the same amount, and are diligent about funneling $500 each month into their emergency fund.

    As of today, they've managed to sock away six months' worth of one of their paychecks, for a total of $19,500 -- a cushion that helps give them peace of mind.

    Unfortunately, an accident involving a rotting tree on their property has them stressing out: Two huge branches fell onto their garage, collapsing the roof and damaging the structure. Since they neglected to take care of the sickly tree, their homeowners insurance won't pay for the repairs.

    And there's more bad news: All of the general contractors they've contacted have said that, in addition to removing the branches, they'll need to rebuild the garage -- with the lowest estimate coming in at $18,000.

    The couple's emergency fund would cover the total, but they feel uneasy about nearly depleting their account.

    That said, they believe that they can cut about $1,500 from their disposable income for a while to either put toward the contractor bill or rebuild their emergency fund -- although they aren't sure how long they can maintain that level of belt-tightening.

    What the financial planner says: Shapiro isn't as quick to recommend that Andrea and Bruce sap their savings right off the bat, seeing as having a safety net is important to them.

    In order to help them maintain at least some of their emergency cushion, Shapiro suggests that the couple consider applying for a home equity line of credit, or HELOC.

    While financing a repair normally wouldn't be preferable, Shapiro believes that Andrea and Bruce's diligence with saving would enable them to pay off any credit they use quickly. Plus, with interest rates low right now, he adds, the couple may qualify for a HELOC with an APR of less than 5 percent.

    After two or three months of being unemployed, it's time to get realistic. Often, the higher your salary, the longer it takes to get a new job.

    To pay off the HELOC, Shapiro says, they could take their $2,000 a month -- the $500 they've been putting into their emergency fund, plus the $1,500 they can squeeze from their budget -- and put that toward the borrowed money.

    In theory, this could help them pay off $20,000 in less than a year, leaving their emergency fund untouched.

    But if freeing up $1,500 a month from their budget will be too difficult to maintain, another option could be to split the cost of the repair between the HELOC and their emergency fund.

    For instance, they may find that cutting $700 a month feels more reasonable, and choose to use their savings to make up for the deficit.

    However Andrea and Bruce choose to divvy up the repair bill, a key consideration, Shapiro says, is that they borrow only what they can pay off in one to two years -- any longer than that and they'll be paying too much in interest.

    Scenario No. 3: The Pink Slip

    Susan and Ben, both in their mid-40s, have built up an emergency fund equaling nine months of Ben's take-home pay -- or about $54,000.

    As vice president at a menswear manufacturer, Ben makes $110,000, while Susan brings home $105,000 as a technology sales rep.

    But a round of layoffs eliminates Ben's job, and because of his short tenure at the company, his severance is minimal.

    Before the job loss, the couple were using Ben's salary to pay for such fixed costs as their mortgage and cars and their daughter's private-school tuition. Susan's paycheck went toward groceries, dining out, clothing, entertainment and other flexible expenses.

    With their income reduced by more than half, they aren't sure how to begin tapping their emergency fund. Should they see how long they can go without touching it? Or is better to start dipping into it now, with the hope that Ben will find a new job quickly?

    What the financial planner says: Because Ben's job loss directly impacts their ability to pay for the essentials, tapping into the emergency fund right away to cover fixed expenses makes sense. It's a "that's what it's for" situation, Shapiro says.

    But Ben needs to take a look at his industry's hiring landscape fast and assess the likelihood that he'll snag another job that pays equally well. Positions at his pay level may be hard to come by quickly -- and if that's the case, belt tightening may be in order.

    "After two or three months of being unemployed, it's time to get realistic," Shapiro says. "Often, the higher your salary, the longer it takes to get a new job. And people with their kind of money have probably been enjoying expensive dinners out."

    If Ben is staring down the barrel of a pay cut, it's time for the couple to start rethinking their lifestyle. Perhaps they can cut some flexible expenses and redistribute those savings to fixed bills, or nix a few monthly services they no longer really need. Those moves could help their income -- and their emergency fund -- go further.

    The good news is that having a hefty nine-month savings cushion means they aren't in dire straits. "If they can cut just $1,000 from their monthly expenses, that fund could last them almost a year," Shapiro says.

     

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    An Amazon Prime box
    Alamy
    By Krystal Steinmetz

    It's only September, but the holiday shopping season has already begun.

    Many retailers have already decorated their stores and unboxed items for Christmas gifts.

    So where are Americans planning to shop this holiday season? A survey from Pitney Bowes found that most Americans plan to do their holiday shopping both in-store and online. Although big holiday sales are typically an effective way to drum up business, online retailers who want to lure customers to shop in their stores could also benefit from expanding their shipping options.

    According to the survey, a variety of shipping alternatives is the best way to shoppers' hearts and wallets.

    "Options are no longer a privilege during the shopping experience. This holiday season consumers will expect the ability to choose their preference," Christoph Stehmann, chief operating officer of Pitney Bowe's digital commerce solutions, said in a statement. "Retailers must focus on offering diverse options -- whether for shopping channel, shipping and return methods or even promotional offers -- in order to attract consumers throughout their shopping experiences."

    More than 93 percent of consumers -- a 23 percent increase from 2014 -- said that the availability of shipping options is an important factor in their overall shopping experience.

    The survey found that consumers are willing to give up quicker shipping or increase their spending in order to qualify for free shipping. In the survey, 3 out of 5 respondents said they would buy more things to meet the free shipping threshold, and 68 percent of shoppers said they would use a coupon or promotional code to get a shipping discount.

    Looking for some more green this holiday season? Check out "11 Easy Ways to Raise Holiday Shopping Cash."

    I hate paying shipping fees. It's one of the reasons that I love Amazon Prime. Sure, I pay an annual fee so I can get free two-day shipping, but with as many items as I order, I still come out ahead.

    How important are shipping options to you when making an online purchase? Share your comments below or on our Facebook page.

    Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free!


    How to Save $500 by Christmas

     

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    Hyundai Recalls
    Ahn Young-joon/AP
    By TOM KRISHER

    DETROIT -- Hyundai is recalling nearly a half-million midsize cars in the U.S. to replace the engines because a manufacturing problem could cause them to fail.

    The recall covers 470,000 Sonata sedans from the 2011 and 2012 model years equipped with 2-liter or 2.4-liter gasoline engines. At the time, the Sonata was Hyundai's top-selling vehicle in the U.S.

    The company also is recalling nearly 100,000 Accent small cars because the brake lights can fail.

    In documents on the Sonata recall posted Friday by the U.S. National Highway Traffic Safety Administration, Hyundai says that metal debris may not have been fully removed from the crankshaft area during manufacturing at Hyundai's Alabama engine plant. That can restrict oil flow to the connecting rod bearings, and since they are cooled by oil, they could fail. If that happens, the engines could stall and cause a crash.

    So far, Hyundai said it has no reports of crashes or injuries from the problem. The company said in documents that a worn connecting rod bearing will make a cyclical knocking noise, and it also could cause the oil pressure warning light to illuminate. Continued driving with the problem can cause the bearing to fail and engine stalling.

    The company said that the 2011 Sonata was the first Hyundai vehicle to use engines made in Alabama, where the company initially used a mechanical process to remove machining debris from the crankshaft. That process was changed to a high pressure wet blasting system in April of 2012.

    Hyundai discovered the problem when owners started reporting engine noise. In June of 2015, NHTSA raised the issue with Hyundai, which said it didn't consider the issue to be a safety problem because owners would get warnings. But NHTSA told the company it was concerned about the possibility of high-speed stalling. Hyundai decided to recall the cars on Sept. 2, according to the documents.

    Dealers will inspect the cars and replace engines at no cost to owners, a company spokesman said. The company also will increase the engine warranty for 10 years or 120,000 miles.

    Owners will be notified Nov. 2, and they'll get a second notice when the replacement engines are available.

    Hyundai spokesman Jim Trainor declined to disclose how much it will cost to replace each engine.

    The Accent recall covers certain 2009 to 2011 models. It's an expansion of a recall issued in 2013. Hyundai says the brake light switch can fail, and the lights won't come on when a driver steps on the brakes. Also, the cruise control may not be deactivated by stepping on the brake, and the gear shifter may get stuck in the "park" position.

    The company says in documents posted by NHTSA that it has no reports of crashes or injuries.

    Hyundai will replace the brake switch at no cost to owners starting Nov. 2, the company said.

     

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    New Home Construction
    Gerry Broome/AP
    By Krista Hughes

    WASHINGTON -- The U.S. economy expanded more than previously estimated in the second quarter on stronger consumer spending and construction, backing the case for an interest rate rise before the end of the year despite data sounding a note of caution for September.

    The Commerce Department said Friday gross domestic product rose at a 3.9 percent annual pace in the April-June quarter, up from the 3.7 percent pace reported last month.

    The data supports the case that the U.S. economy may be gaining enough strength to withstand an increase in benchmark interest rates from record low levels despite growing concerns about the global economy.

    There are a lot of things to like about the domestic side of the economy for the second half of the year despite all the global malaise.

    Still, many economists are expecting a cooler pace of growth in the third quarter, a view bolstered by separate data showing slower growth in services and a drop in consumer sentiment in September.

    The U.S. Federal Reserve last week held off on hiking rates, but Fed Chair Janet Yellen kept the door open to an increase this year in a speech on Thursday night, as long as inflation remains stable and growth is strong enough to boost employment.

    "There are a lot of things to like about the domestic side of the economy for the second half of the year despite all the global malaise," said Jacob Oubina, senior economist at RBC Capital Markets in New York. "If the domestic economy holds in there, [Fed policymakers] are going to hike in December."

    Second-quarter growth, which beat expectations in a Reuters poll for the third GDP reading to be unchanged at 3.7 percent, was bolstered by higher consumer spending, mainly on services like healthcare and transport.

    Treasury debt prices extended losses and the dollar hit a fresh five-week high against a basket of currencies on the second-quarter figures, although U.S. stock index futures pared some gains after the September data was released.

    The preliminary Purchasing Managers Index for the services sector from Markit slipped to 55.6 in September from the final 56.1 reading in August. A reading over 50 signals expansion in economic activity.

    "The survey data point to sustained steady expansion of the U.S. economy at the end of the third quarter, but various warning lights are now flashing brighter, meaning growth may continue to weaken in coming months," said Chris Williamson, chief economist at Markit.

    The University of Michigan's final reading on consumer sentiment for September slipped to 87.2 from 91.9 in August, although it was higher than expectations.

    Stronger Base

    But the stronger consumer spending and a smaller inventory build reported for the second quarter are a good sign for growth in the July-September period.

    Consumer spending, which accounts for more than two thirds of U.S. economic activity, was revised up to a 3.6 percent growth pace from the 3.1 percent rate reported in August, helped by cheap gasoline prices and relatively higher house prices boosting household wealth.

    Revised construction spending data helped to push up the headline figure, with non-residential fixed investment expanding 4.1 percent in the quarter. Business investment on structures was revised upwards along with residential fixed investment.

    The revisions to second-quarter growth also reflected a smaller accumulation of inventories than earlier estimated, reducing the chance that a sharp unwinding in inventories would drag on growth.

    "For the Fed, the forward-looking part is most important and the one positive take-away is inventory contribution," said Gennadiy Goldberg, interest rates strategist at TD Securities.

    "There had been quite a bit of fear that strong inventory building in Q2 would be unwound in Q3. It actually shows GDP should be a little firmer in the next quarter, but not by a whole lot."

    After-tax corporate profits were also stronger in the second quarter than previously thought. Profits after tax with inventory valuation and capital consumption adjustments showed a 2.6 percent rebound from a slump in late 2014 and early 2015.

    -Richard Leong, Michael Connor and Gertrude Chavez-Dreyfuss contributed reporting from New York.

     

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    Taco Bell Alcohol
    Matt Marton/APThe first Taco Bell Cantina restaurant, along Milwaukee Avenue in Chicago, opened Tuesday.
    There were plenty of winners and losers this week, with an iconic automaker caught trying to cheat emission standards and a leading fast-food burrito roller introducing a new fast-casual concept.

    Amazon.com (AMZN) -- Winner

    The spotlight was on Amazon's video initiatives this week. The leading online retailer kicked things off by winning five Emmy awards for its hit show "Transparent." It then went on to announce six new shows that it's considering bankrolling.

    Amazon will make the pilots to all six shows available later this year. It will then weigh viewer ratings and comments in deciding which ones to produce. It's not a conventional approach, but Amazon doesn't really do things the conventional way.

    Volkswagen (VLKAY) -- Loser

    It was a brand-tarnishing week for the once-beloved German automaker. Volkswagen came under fire for installing software into its diesel vehicles that delivers bogus results of emission tests.

    Having to recall 500,000 of its diesel cars to meet U.S. federal standards was just the beginning. Volkswagen eventually conceded that as many as 11 million cars could have discrepancies, setting aside $7.3 billion to cover the fallout. Its CEO stepped down, and now the real damage left to assess will be how hard sales will drop until it's able to win back consumer trust.

    Yum Brands (YUM) -- Winner

    After months of buzz, Taco Bell is finally starting to deliver some buzz. Parent company Yum Brands opened the first Taco Bell Cantina on Tuesday in Chicago, the first Taco Bell-branded restaurant to serve alcohol. We're talking about a full line of craft beers, wine and sangria, as well as rum, vodka and tequila that can be added to any fountain or frozen beverage.

    This isn't a winning move just because you can now get your drink on at an experimental Taco Bell eatery in Illinois. Taco Bell Cantina offers many trademarks that make it more fast casual than fast food, including an open exhibition kitchen, a lack of drive-thru windows and food served unwrapped on open baskets. If the concept takes off, it can quickly ramp up the concept by converting some of its more than 6,000 traditional Taco Bell locations.

    Yelp (YELP) -- Loser

    Be careful the next time that you rant on Yelp. A judge has decided that a woman in New York owes a floor refinisher provider $1,000 after badmouthing the service provider in a Yelp review.

    To be fair, she called the refinishing company a scam, liar, and robber. Two out of those three insults carry criminal implications, and that's why the judge ruled against her. She will appeal -- and Yelp will want to make sure that she wins. The last thing that the merchant reviews website wants is for folks to feel that posting an opinion can prove costly down the line.

    Facebook (FB) -- Winner

    The leading social networking website wants to wrap you in eye candy. Facebook introduced videos shot in 360 degrees. Viewers can play the video and pan the perspective while it plays.

    The first video that went viral is in promotion of the upcoming "Star Wars" movie, but you can be sure that others will take advantage of the new platform to promote movies, video games, and even travel destinations. Once again, Facebook is an early adopter of something that could be an important online tool for marketers.

    Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns and recommends Amazon.com and Facebook. The Motley Fool recommends Yelp. Try any of our Foolish newsletter services free for 30 days. Check out The Motley Fool's one great stock to buy for 2015 and beyond.

     

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    Germany Volkswagen
    Michael Sohn/APNewly appointed Volkswagen CEO Matthias Mueller
    By Andreas Cremer

    WOLFSBURG, Germany -- Volkswagen (VLKAY) named company veteran Matthias Mueller as its chief executive Friday as the German carmaker struggles to get to grips with a crisis over rigged diesel emission tests that its chairman called "a moral and political disaster."

    After a marathon board meeting at its headquarters in Wolfsburg, the world's biggest automaker said Mueller, the 62-year-old head of its Porsche sports car division, would replace Martin Winterkorn, who resigned Wednesday as CEO.

    As Mueller took the helm, however, Germany's transport minister announced the carmaker had manipulated test results for about 2.8 million vehicles in the country, nearly six times as many as it has admitted to falsifying in the United States, pointing to cheating on a bigger scale than previously thought.

    Under my leadership, Volkswagen will do all it can to develop and implement the strictest compliance and governance standards in the whole industry.

    Volkswagen, for generations a model of German engineering prowess, is under huge pressure to take decisive action over the biggest business-related scandal in its 78-year history.

    "Under my leadership, Volkswagen will do all it can to develop and implement the strictest compliance and governance standards in the whole industry," Mueller said in a statement.

    The company said it would appoint a U.S. law firm to conduct a full investigation, suspend an unspecified number of staff and adopt a more decentralized structure with a slimmed down management board.

    But the scandal keeps growing. German transport minister Alexander Dobrindt said Thursday that Volkswagen had also cheated tests in Europe, where its sales are much higher than in the United States. On Friday, Dobrindt put the number of affected vehicles in Germany at 2.8 million.

    Regulators and prosecutors across the world are investigating the scandal, while customers and investors are launching lawsuits.

    The wider car market has been rocked, too, with manufacturers fearing a drop in sales of diesel cars and tougher testing.

    Regulators in Europe and the United States said Friday they would take a harder line on enforcing compliance with pollution standards and would be less tolerant of gaps between real world emissions and laboratory results.

    Volkswagen said on Tuesday 11 million vehicles worldwide were fitted with the software that allowed it to cheat U.S. tests, while adding it wasn't turned on in the bulk of them.

    Customers and motor dealers are furious that Volkswagen has yet to say which models and construction years are affected, and whether it will have to recall any cars for refits.

    The Right Man?

    The task facing Mueller is enormous, with the latest issue of influential German weekly Der Spiegel showing pall-bearers carrying a Volkswagen car decked out as a coffin under the headline "The Suicide."

    "His appointment is a step towards cleaning-up," said LBBW analyst Frank Biller about Mueller, a former head of product strategy close to the Piech-Porsche family that controls Volkswagen.

    But Henning Gebhardt, global head of equity at Deutsche Asset & Wealth Management, said Volkswagen had missed an opportunity.

    "He won't be able to lead the company for 10 years due to his age alone. That means there will be discussions about succession in the foreseeable future again," he said.

    Bernstein analyst Max Warburton also questioned whether a man who has spent more than three decades at the company was the right man to signal a break with the past.

    He urged "big and bold action," saying the new CEO should offer to buy back and scrap almost 500,000 diesel cars sold in the United States, which would cost about $6 billion.

    Volkswagen said sales chief Christian Klingler would leave the company, but that U.S. head Michael Horn -- also widely tipped to go -- would stay.

    Acting Chairman Berthold Huber apologized to "our customers, the public, authorities and investors" and asked them to give Volkswagen a chance to make good on the damage from the emissions scandal.

    "I want to be very clear, the manipulation of tests for diesel engines is a moral and political disaster," Huber said.

    Volkswagen will hold an extraordinary shareholder meeting on Nov. 9 in Berlin to approve its proposed changes.

    Frank Schellenberg, a taxi driver in Wolfsburg where the carmaker employs around 70,000 people, said locals felt betrayed and feared the worst.

    "They have lost any contact with the real world, the customers who have been buying their cars in good faith," he said, pointing to the firm's 13-story administrative building. "Everyone in Wolfsburg is expecting tough times and job cuts."

     

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    Stocks Close Down Day After Federal Reserve Leaves interest Rate Unchanged
    Spencer Platt/Getty Images
    By Caroline Valetkevitch

    NEW YORK -- The S&P 500 erased an early Fed-driven rally to close down slightly Friday, as a sell-off in biotechs offset gains in banking shares.

    The Nasdaq fell 1 percent, while the Nasdaq Biotech Index tumbled 5.1 percent and retested its low from August, when it entered bear market territory.

    The Dow ended solidly in positive territory, helped by shares of Nike (NKE), which hit a record high after its profit topped expectations on strong China growth. The stock, up 8.9 percent at $125, gave the biggest boost to the Dow and the S&P 500.

    The market started the day higher after Federal Reserve Chair Janet Yellen late Thursday said she and other Fed policymakers don't expect recent economic and financial market turmoil to significantly alter the U.S. central bank's policy, easing concerns about the world's economic health. She said she expects interest rates to be raised this year.

    The declines in the biotech index extended this week's drop to 13 percent, its biggest weekly decline in seven years. On Monday, U.S. Democratic presidential candidate Hillary Clinton said she would announce a plan to stop "price gouging" for specialty drugs, sparking a drop in the shares.

    The S&P 500 health care index was down 2.7 percent, leading the decline in the S&P 500 while the S&P financial index was up 1.5 percent.

    "Biotechs had been an area that had been doing really well so it could be as the market has gotten worse that people are selling stuff that's less painful to sell. Valuations were pretty stretched," said Eric Kuby, chief investment officer at North Star Investment Management in Chicago.

    The Dow Jones industrial average (^DJI) rose 113.35 points, or 0.7 percent, to 16,314.67, the Standard & Poor's 500 index (^GSPC) lost 0.9 points, or 0.05 percent, to 1,931.34 and the Nasdaq composite (^IXIC) dropped 47.98 points, or 1 percent, to 4,686.50.

    Skittish Markets

    Markets have been skittish since last Thursday, when Yellen cited concerns about slowing global growth as a key reason for holding off from a much-anticipated rate hike.

    For the week, the Dow was down 0.4 percent, the S&P 500 was down 1.4 percent and the Nasdaq was down 2.9 percent.

    Declining issues outnumbered advancing ones on the NYSE by 1,587 to 1,459, for a 1.09-to-1 ratio on the downside; on the Nasdaq, 1,907 issues fell and 920 advanced for a 2.07-to-1 ratio favoring decliners.

    The S&P 500 posted six new 52-week highs and 17 new lows; the Nasdaq recorded 41 new highs and 179 new lows. About 7.2 billion shares changed hands on U.S. exchanges, compared with the 7.4 billion daily average for the past 20 trading days, according to Thomson Reuters (TRI) data.

    -Tanya Agrawal and Abhiram Nandakumar contributed reporting.

    What to watch Monday:
    • The Commerce Department releases personal income and spending for August at 8:30 a.m. Eastern time.
    • The National Association of Realtors releases pending home sales index for August at 10 a.m.
    • The Federal Reserve Bank of Dallas releases its survey of manufacturing conditions in Texas at 10:30 a.m.

     

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    Happy people
    Getty ImagesYou can take a whack at your budget without chopping the purchases you enjoy.
    By Deacon Hayes

    When you are in debt, it can be very overwhelming. Often the pressures of debt can motivate you to make a plan to pay it off sooner than if you just made the minimum payments required by your lender. I know this from firsthand experience when my wife and I had $52,000 in debt when we got married in 2008. We were just starting off in life, and we had a negative net worth that was very discouraging.

    There's a happy ending to our story though. We were able to pay off all $52,000 of debt in only 18 months! It was a liberating feeling, and it's something that motivated me to teach others to get out of debt in a short period of time.

    Two Ways to Pay Off Your Debt Quickly

    The first way is to increase your income. Traditionally, people will take on a second job, but that could cause a significant change in the way they are currently living. So the best way to earn some extra cash fast is to sell items around the house that you rarely use or just don't need any more. You may be surprised to find there are power tools in your garage that could be worth hundreds of dollars. Perhaps you are into designer clothes, and there are outfits you haven't worn in ages. Consider selling these items online or in a garage sale to earn some additional money to throw toward your debt.

    The other way to demolish your debt is to reduce your expenses. You may be thinking, "Isn't this supposed to be about helping me get out of debt without affecting my lifestyle?" The answer is still "yes."

    Before getting into what expenses you should cut, you need to make a list of all your expenses on a piece of paper. If you are into spreadsheets, then that might be an easier solution. You can adjust the sheet so it automatically totals all your expenses so you know exactly how much money you are spending each month. Once you determine which method of tracking you want to use, collect all of your statements for from the last month and begin writing down each expense.

    There are some expenses that aren't "fixed" and need to be addressed differently. Categories such as groceries, eating out or entertainment tend to include expenses that fluctuate from month to month, which makes them variable expenses. The best way to see what you spend in these areas is to take the last three months of your bank statements, and total up how much you spent in each category. Divide that number by three, and you will get your average spending for each category over the past 90 days.

    Expenses to Consider Cutting

    Now that you have a clear understanding of what your expenses are, go through your sheet line by line and ask yourself, "Is this category necessary?" If the answer is "no," eliminate it. If it is still something you want to spend money on, it is now your mission to see if you can get that item or service cheaper somewhere else. Here are a few categories in your budget that are easy to trim (or cut completely):

    Cable. Nowadays, there are so many options to watch TV shows and movies, including Redbox, Netflix and Hulu. Many of these options are significantly cheaper then premium cable. There is even an option to get major cable channels such as ESPN, AMC and others through Sling TV, which only costs about $20 a month.

    Groceries. With the average family spending around $4,000 a year for groceries, according to the Bureau of Labor Statistics, this can be one of the biggest budget busters. However, if you plan ahead and write a shopping list before going to the grocery store, it will help you avoid buying unnecessary items and stay within your budget.

    Entertainment. Perhaps you love to go to the movies, and you don't want to give that up. You don't have to. Most movie theaters give a discounted rate if you go before 5 p.m., and some will offer even lower ticket prices if you see a movie before noon.

    Cellphone. It's common to pay over $100 a month for a cellphone plan, but there are several companies making cellphone plans more affordable. For example, at Republic Wireless, you can get an unlimited talk and text plan with 2 GB of data for only $40 a month.

    There are several ways you can eliminate your expenses. If you take the time to create a budget, you may be amazed by areas you can trim that won't affect your lifestyle.

    Deacon Hayes is a financial expert and founder of Well Kept Wallet, a financial education company that provides personal finance curriculum for people across the world.

     

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