S&P 500 on track for a record August: What today's news means for your money

S&P records and consumer spending are making news today. Here's how the headlines could affect your money:

After a run last week that wiped out pandemic losses and officially heralded a new bull market, the S&P has continued its record-breaking streak. The benchmark closed Thursday at a new all-time high for the fifth day in a row. So far, the index is up 6.5% for the month — which puts it on track for its best August since 1986.

Americans spent 1.9% more on goods and services in July, according to Bureau of Economic Analysis data released Friday. It's the third month in a row that spending has increased, although the pace has slowed. 

Part of the reason people feel more comfortable spending: After two months of declines, personal income also increased last month by 0.4% with more businesses reopening. Disposable personal income was up 0.2%. 

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The Education Department recently announced it would suspend federal student loan payments and set the federal student loan interest rate to 0% through the end of 2020. President Donald Trump signed an executive order earlier this month to extend the reprieve, originally put into place by the CARES Act.

Take advantage of the pause if you're struggling financially, experts suggest. But if you're comfortable, keeping up with payments while rates are at 0% could help you get ahead and pay less in interest overall. 

Just check that your debt qualifies: Private student loans aren't covered.  

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Disposable personal income, or DPI, is another way of saying after-tax income. The calculation is typically:

Personal income - current tax liability = DPI

Don't confuse it with discretionary income, which is what you have left to invest, save, and spend after you cover taxes and necessary expenses like housing, utilities, and groceries.

Although the daily news can have an impact on your wallet, remember to take a long-term outlook when it comes to decisions on spending, saving, and investing.

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