Dad Joke
I’m very afraid of negative numbers.
I’ll stop at nothing to avoid them.
Now Let’s Make Your Money Smile
Everybody’s explaining the quarter point this morning. It’s the least interesting number on your statement.
I read four of them before breakfast — the “what the Fed hike means for your mortgage, car loan and credit cards” explainers that arrive the morning after every meeting, as reliable as the meeting itself. The Washington Post’s opens by reassuring you the mortgage rate you’ve been eyeing won’t suddenly shoot up. All of them are accurate. And I noticed, reading them, that they’re all about the same number, and it’s the number that matters least.
Here’s what the Fed did: a quarter point, to 3.75–4.00 percent, the first increase since 2023, on a 12–0 vote. Here’s what that costs a person with $6,000 on a card: about $15 a year. I’ve watched people lose sleep over that $15 while the rate they already had — 22 percent, which is the average on accounts carrying a balance according to the Federal Reserve’s own data — was quietly costing them about $1,329 a year. The hike is the headline. The 22 percent is the story, and it was set the day the account was opened, in a number called the margin that nobody I’ve ever met has asked about. The card company doesn’t have to warn you when the index moves, and it doesn’t have to tell you the margin is negotiable, and in the years since 1994 that I’ve been doing this the people who got a lower rate got it by asking about the margin, not by waiting for the Fed. The whole mechanism, with the regulation and the arithmetic, is in the longer version I put up yesterday afternoon.
The mortgage half of those explainers has it backwards in the other direction. Forbes has the 30-year at 7.08% this morning, a one-year high — but it was already at a one-year high two weeks ago, while the Fed was still sitting on its hands. Mortgages follow the ten-year Treasury, not the Fed’s overnight rate, which is why they went up before the hike and why “the Fed raised my mortgage rate” is a sentence that feels true and isn’t. What I make of the whole morning: the number the news can see is the one the Fed sets, and the numbers that actually run your life were set somewhere else, earlier, by somebody who was hoping you wouldn’t look.
Somebody you know is carrying a balance and waiting for the Fed to fix it. Yesterday made that plan take longer, and the part of their rate they can actually move was never the Fed’s to begin with. The $15-versus-$1,329 arithmetic is the thing I’d want in front of them, and if that’s somebody you know, I’d forward it to them before they wait another year.
The number: $107,269
That is the median 401(k) balance for people aged 55 to 64 in Vanguard’s How America Saves 2026, the biggest look anyone gets inside real retirement accounts. The average for the same age group is $305,006. I keep both numbers on the desk because the headlines only ever use one of them, and it’s never the one that describes the person reading. Half of the people in those plans at that age have less than $107,269 in them. At the 4 percent withdrawal rule that people quote — my arithmetic, not Vanguard’s — that’s about $358 a month, for life.
A story going around yesterday put the median at $89,400 and attributed it to Vanguard. I went and read the report; Vanguard doesn’t publish that bracket, and its figure is the one above. I mention it because the same thing happens to the average-versus-median gap every day: a number gets passed hand to hand until it means what somebody needed it to mean. After all the years I’ve spent reading other people’s statements, what strikes me is not how little the median is. It’s how many people I’ve sat across from who measured themselves against the average and concluded they were the failure in the room, when they were the room.
Three things I noticed
I noticed the gap between two numbers before I noticed either number. The electric bill is outrunning the inflation figure: Bank of America’s card data, reported this morning, has the average utility bill up 5.3 percent from a year ago in August, against a 4 percent rise in the government’s electricity-and-gas index — and up 10 percent in Detroit, Baltimore and Washington, while bills fell in Orlando and Tampa. The bank blames the hottest summer on record, grid rebuilding and the data-center build-out, and says the pressure stays. What I noticed is the gap between the two numbers: the index is the country, the bill is your house, and the bill is the one you pay.
The “claim Social Security late” math assumes a millionaire. A piece this week walks a 64-year-old couple through delaying to 70 for a benefit up to 76 percent larger — and the worked example has a $1.4 million 401(k) to live on in the meantime. I took mine at 62. Not because I couldn’t do the arithmetic, but because the arithmetic is written for the couple with $1.4 million, and the median couple above has $107,269 and a job that may not last to 70. A bigger check at 70 is real. So are the eight years of checks the 62-year-old already cashed, and so is the possibility of not making it to the break-even. The right answer depends on which couple you are, and the articles only ever seem to write about one of them.
One claims desk item, and only one. If you bought a digital PlayStation game from Sony’s store between 2019 and now, a $7.85 million antitrust settlement is scheduled for a final hearing October 15; the suit alleges Sony forced digital games through its own store at inflated prices, Sony denies it, and no court has ruled. There’s no form for most people — eligible accounts get store credit added automatically after the hearing; deactivated accounts have to email the settlement administrator for cash. It’s small money. I include it because it’s the rare one that pays you for doing nothing, which is my favorite kind.
What I published yesterday
Two that haven’t reached the email list yet, besides the Fed piece above:
If one of these was news to you, it’s news to somebody you know — that’s the whole reason this exists. It’s free at yourmoneyactually.com, and I don’t sell the list. The places I actually use for my own money, and what I get out of telling you, are on one page where they’ll always be.
Nothing here is advice for your specific situation. It’s what I’d say across the kitchen table, and across the kitchen table I’d also say the details of your own life outrank anything I’ve written here.
One more thing. The people I’ve watched get out of a hole never did it on a day the Fed moved. They did it on an ordinary Tuesday, by looking at one statement they’d been avoiding and asking one question they’d been afraid to ask. The number came down a little. Then it came down more. That’s available to you tomorrow, and it doesn’t need Washington’s permission.
— Steve