🚨What the US government shutdown means for you

Hello On The Money readers!

It will come as no surprise that the ripple effects of the U.S. government shutdown will be felt far and wide. Here is what the shutdown means for you.

The shutdown is expected to impact domestic as well as international travel, fraud reporting to the FTC and small business loans.

Experts say the shutdown will curtail the IPO market's momentum, too. And a key worry is how the closure will shut off the flow of key economic data – including the all-important September jobs report – at a moment of uncertainty among policymakers and investors about the health of the U.S. employment market, the trajectory of inflation and the strength of consumer spending and business investment.

It's a fast-moving story. Check out our live blog for the latest updates.

Have you used artificial intelligence to make any money decisions, big or small? I have not, but I am intrigued.

As ChatGPT nears its third birthday, at least one in 10 retail investors is using a chatbot to pick stocks, fueling growth in the robo-advisory market, reports broker eToro.

About half of retail investors say they would use AI tools such as ChatGPT or Google's Gemini to pick or alter investments in their portfolio. And 13% of them already use these tools, reports eToro, which polled 11,000 retail investors across the world.

Stock picking using ChatGPT requires some financial knowledge, and its adopters say there is a high risk of getting it wrong before getting it right.

That said, AI is extremely helpful for creating projections. I asked Microsoft Copilot how much money I need to save for college in a 529 College Savings plan per week for a baby born today to reach a $1 million goal by the time they are 18. (College is expensive, people!)

The answer: Assuming a 6% average annual return, I need to save approximately $604.63 per week.

Voila! Have you used AI for financial advice? If so, how? Share your thoughts or email me: onthemoney@thomsonreuters.com.

Here is what the U.S. government shutdown means for stocks, bonds and the U.S. dollar. Watch here.

Must. Drink. Coffee. REUTERS/Khaled Abdullah

Coffee is one of the key items keeping food prices in the U.S. persistently high. 

Prices for arabica coffee, the mild variety mostly used by chains such as Starbucks and Dunkin Donuts, have roughly doubled on the Intercontinental Exchange in New York since the Trump administration applied a 50% tariff on Brazilian imports at the end of July, including green coffee.

That stalled shipments from Brazil, a country that historically supplied a third of all coffee used in the U.S.

As a result, roasted coffee prices at grocery stores in the U.S. rose 20.9% in August from a year ago, according to Bureau of Labor Statistics data.

I am reconsidering my coffee purchases, although it is hard to resist popping into our local coffee shop. Are you altering your coffee habits, based on prices? Tell me how – or why at onthemoney@thomsonreuters.com.

College is expensive. REUTERS/Jonathan Drakd

Q. I want to help my goddaughter pay down some of her substantial student loans (and the interest that has accrued over more than a decade). I am guessing the Department of Education, like most lenders, would welcome the certainty of payment today of some fraction of the full amount, rather than wait years to get some or all of it paid – with the real risk of default.

Two questions:

1) Who would be in a position to establish a fair present value payback? Does the DoE have a repayment tsar?

2) Would the difference between the face amount of the loans and whatever they are settled for be considered income to her? There would be no point in saddling her with one debt to the federal government (payable next April) in order to satisfy a debt to a different branch of the government that is only required to be paid over many years.

 – Jon

A. This is such a generous and kind gesture. But, alas, the U.S. The Department of Education does not provide a discount for prepayment for borrowers who are current on their loans, says Mark Kantrowitz, a student loan expert and author of "How to Appeal for More College Financial Aid."

"The only option is to have the prepayment applied to the current balance (principal plus any accrued but unpaid interest) on the loans," Kantrowitz says. 

There is an exception if you settle debt that has been in default for a long time, Kantrowitz notes. 

"Strategic default is ineffective, as the settlement will always be more than the loan balance at the time the loan went into default," he adds.

Do you need to pay off a loan? Are you considering pet insurance? Send questions to onthemoney@thomsonreuters.com, and I'll tap my extensive source network and braintrust for expert advice.

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