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4 simple steps to spending less in 2020

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Most people kick off the new year with a resolution to spend less and save more. Easier said than done.

Despite steady income growth over the last decade, household spending has risen more, recent research shows.

A CNBC survey found 21% of Americans say they’d increased their spending in the last year. The majority gave no reason why and just 22% of those who said they were spending more said it was because they had a new or better paying job.

As a result, families have perilously little slack in their budgets — just 40% of Americans are able to cover an unexpected $1,000 expense, such as an emergency room visit or car repair, with their cash cushion, according to a survey from personal finance website Bankrate.

But, fueled by a decade of economic expansion, the year 2020 can be different. Here’s how to make it happen:

Step 1: Rank your expenses

Most experts start by differentiating between discretionary and fixed expenses.

To do this, start by tracking what you spend money on and then rank that list of monthly, recurring and one-time expenses in order of importance.

Sample monthly budget

Alex Kuzoian

Put essential expenses you “need” at the top – that’s what you can’t live without, such as housing, food, transportation and child care.

Then rank savings for emergencies and your retirement followed by “wants,” or nonessential items, which may include eating out, vacations or streaming services like Netflix.

Step 2: Challenge every expense

Go back over your list and challenge every outlay. Consider how much are you paying, as well as whether you could pay less or cut it out all together.

That includes whether you really use all the subscription services that you’re paying for or that pricey gym membership. If you don’t use it, lose it.

Further, is it possible to negotiate a better rate on recurring expenses — often it is and the savings is significant.

For example, good drivers could be missing out on saving $416.52 a year, on average, by failing to compare car insurance, according to an analysis by NerdWallet.

Step 3: Cut out a few “wants”

Step 3: Rein in impulse purchases

Impulse shopping, or what Watts calls “Amazon spending,” is often the worst budget buster. One quick way to put that in check is to sign off of social media, at least to some extent.

Overall, 63% of millennials think social media has a negative influence on their financial well-being, according to a millennial money study by Fidelity, which polled more than 2,000 adults ages 22 to 27.

More than half of millennials have spent money they weren’t originally planning to on products they saw in their social media feeds, according to separate research from Allianz Life Insurance Company of North America.

Further, nearly 40% of young adults said they spent money they didn’t have, sending them into debt to keep up with their peers, according to another report by Credit Karma.

Christopher Tracy, president of budgeting app Mvelopes, also recommends taking your credit card information offline to help slow down impulse spending, limiting your daily time on social media and unfollowing people or stores that tend to trigger purchases.

Step 4: Go on a cash diet

Since it’s January, call it a cash diet and commit to these simple lifestyle changes that can help you save thousands of dollars over the course of the year.

For those who struggle to stick to a budget, switch to a debit card for the month.

Put your credit cards in a drawer and pledge to only spending the cash you have on hand for those few weeks.

If you have to put it on a credit card and won’t be able to pay the bill in full next month, then you shouldn’t buy it.

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FPIs pour in Rs 1,624 cr in Jan so far as US-China deal boosts sentiment

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Foreign portfolio investors (FPI) have infused a net sum of Rs 1,624 crore into the Indian capital markets in January so far, buoyed by the signing of the first phase of the US-China trade deal.


According to the latest depositories data, FPIs invested a net Rs 13,304 crore in equities and withdrew a net Rs 11,680 crore from the debt segment between January 1-24. This translates into a total net inflow of Rs 1,624 crore.



“After starting the year on a muted note, investments from FPIs has picked up pace and most of that flows came after US and China signed a trade deal putting the trade war between them on a pause,” said Himanshu Srivastava, senior analyst manager research at Morningstar Investment Adviser India.


The latest investments came despite challenges such as enhanced geopolitical tension between the US and Iran and dwindling domestic economic growth, Srivastava noted.


On the domestic front, “there are some signs of India shaking away the slowdown with business activity picking up and this is reflecting in the investments coming into equities. Besides, after the limit to which FPIs can invest in debt instruments has been increased, more inflows into the debt category can be expected,” said Harsh Jain, co-founder and COO at Groww.


The Reserve Bank of India on Thursday raised the investment limit for FPIs in government and corporate bonds, a move that is likely to bring in more foreign funds in the country.


According to the current norms, short-term investments by an FPI should not exceed 20 per cent of the total investment of that FPI in either central government securities (including treasury bills) or state development loans.


The same norms are applicable on investments in corporate bonds.


The short-term investment limit has now been increased from 20 per cent to 30 per cent in both the cases, the RBI said in a circular.


Additionally, the RBI has also made relaxation in the voluntary retention route (VRR) for FPI investments in debt. The investment cap through VRR has been doubled to Rs 1.5 trillion, the RBI said in another circular.


Going forward, “all eyes will now be on the upcoming Budget to get further cues. This will play major role in terms of shaping up the investment views of foreign investors and decision to invest in the Indian equity markets,” Srivastava added.



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The Pharmacist Is Out: Supermarkets Close Pharmacy Counters

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In some towns, it’s getting harder to pick up your blood-pressure pills with that gallon of milk and rotisserie chicken.

Hundreds of regional grocery stores in cities from Minneapolis to Seattle are closing or selling pharmacy counters, which have been struggling as consumers make fewer trips to fill prescriptions and big drugstore chains tighten their grip on the U.S. market.

Grocery pharmacies are getting hit on several fronts, analysts and the companies say. They are too small to wrest competitive reimbursement rates on drugs, they aren’t connected to big medical networks or insurers, and they generally lack walk-in clinics and other health services that draw many customers to CVS and Walgreens locations.

“Our establishment had a community feel, it wasn’t overly busy so we got to really care for our customers,” said

Phillip Breker,

who managed a now-closed pharmacy at Lunds & Byerlys, a Minneapolis-area grocery chain. “I also saw the numbers in the back end and how that soured in the last 10 years. The company made the right decision.”

Grocery pharmacies are the latest casualty of industry consolidation that has for years been forcing mom-and-pop drugstores to close. Even some big players have rethought the market.

Target Corp.


TGT -1.05%

sold off its pharmacy business to

CVS Health Corp.


CVS -2.86%

five years ago.

Supermarkets have viewed pharmacies as a tool to draw shoppers in. Fueled by easy profits and relatively low startup costs, legions of stores added pharmacy counters in the 1980s and 1990s. Grocery drugstores proliferated to account for roughly 14% of retail pharmacy prescriptions, according to the National Association of Drug Stores.

The number of grocery pharmacies declined for the first time in years in 2017, the latest year for which data is available, to 9,026, down from 9,344 in 2016.

Consumers are increasingly getting 90-day supplies of their medicines or getting prescriptions delivered in the mail. Those trends are resulting in a decline in foot traffic to supermarket pharmacies, which were typically located at the back of stores. Meantime, profits are ever harder to come by as the health-care industry consolidates.

CVS and

Walgreens Boots Alliance Inc.,

the nation’s biggest players, contributed more than 40% of U.S. prescription revenues in 2018, according to Drug Channels Institute, which provides research on the drug supply chain.

The chains, which now either own or have partnerships with the biggest insurers and pharmacy-benefit managers, are able to secure better deals on drug costs that largely shut out the industry’s smaller players. Pharmacy-benefit managers serve insurers and other clients by choosing which medicines to cover and pushing for lower prices from drugmakers and sellers.

CVS and

Walgreens


WBA -2.36%

also are working to transform drugstores into health-care hubs, offering services from blood testing to chronic-disease management.

“The biggest companies in health care now have pharmacists and doctors, they own medical practices, and they own urgent-care clinics,” Baird analyst

Eric Coldwell

said. Grocery pharmacies “have none of this. They have a store to go into to buy lemons and bread.”

Kroger, one of the supermarket chains that still see pharmacies as a key element of their business, says pharmacy customers tend to spend more on groceries.


Photo:

Rogelio V. Solis/Associated Press

The tougher conditions come as the entire drugstore industry copes with a shift to online shopping and shrinking profits in prescription medicines, which often disproportionately affect smaller players.

Walgreens and CVS have closed or are closing more than 300 underperforming stores, while

Rite Aid Corp.,

the No. 3 U.S. chain, is struggling to turn itself around after regulators blocked a merger with Walgreens in 2017.

Raley’s Supermarkets, a West Sacramento, Calif., chain of about 120 stores, last year shut down a third of its roughly 100 pharmacies and transferred prescriptions to nearby Walgreens, CVS and Rite Aid stores. Those grocery pharmacies had low prescription rates, were losing money and didn’t merit high operating and labor costs, according to Raley’s.

“There is the benefit of having a pharmacy relative to the grocery-sale lift and the convenience factor of having both in the store, but the economics do not work,” said

Keith Knopf,

chief executive of Raley’s.

Profitability for grocers has become harder to achieve in recent years, and pharmacies play a less important role today in attracting customers, Mr. Knopf said. Raley’s is cutting hours for the remaining pharmacies to improve profits and create efficiency. Pharmacies make up roughly 20% of Raley’s total sales.

Many grocers still view pharmacies as a key part of their business.

Kroger Co.,


KR -0.88%

the biggest U.S. supermarket chain, said its pharmacy business is expected to improve this year after lower-than-expected profits in 2019. Kroger has said pharmacy shoppers tend to be more loyal, spending three times as much as nonpharmacy customers.

“We’ve been able to connect the relationship with food and are starting to build out new revenue streams,” Kroger finance chief

Gary Millerchip

said at an investor meeting in November.

Lunds & Byerlys, the Minnesota chain, shut all 14 of its supermarket pharmacies last year. At each location, it posted a sign that has become increasingly common: “The pharmacy is now closed. Your prescription records have been transferred to Walgreens.”

Mr. Breker, the pharmacy manager, now works for Walgreens at a location in a nearby town. “I literally cried at the counter with dozens of people,” he said. “They felt a loss here.”

Write to Sharon Terlep at sharon.terlep@wsj.com and Jaewon Kang at jaewon.kang@wsj.com

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Iraqi security forces clash with hundreds of protesters in central Baghdad By Reuters

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BAGHDAD (Reuters) – Iraqi security forces firing teargas and live bullets clashed with hundreds of protesters in central Baghdad on Sunday, a Reuters witness and security sources said, following a push to clear out a sit-in camp in the heart of the capital.

At least 14 protesters were injured, the security and medical sources said.

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