How the debt ceiling negotiations could affect your money

Plus, two tips for building wealth through real estate.

VIEW IN BROWSER | SUBSCRIBE Wednesday, May 24, 2023 CNBC Make It Money helps you be smarter as you earn, spend, save and invest. By Ryan Ermey The debt ceiling 'deadline' is June 1 — here's how the standoff could affect your money President Joe Biden and House Speaker Kevin McCarthy met Monday evening in an attempt to resolve a monthslong political standoff over raising the U.S. debt ceiling.    They don't have much time to spare to reach a deal. The government hit the limit on what it was allowed to borrow – currently $31.4 trillion — in January. Since then, the Treasury has been taking so-called extraordinary measures to make sure the U.S. can pay its bills.    Treasury Secretary Janet Yellen estimates that the emergency funding will last until June 1. After that, there's a "significant risk" that the government could default if politicians can't agree on a deal to raise the limit, according to the Congressional Budget Office.    A default could have huge ramifications, from missing payments to Social Security recipients and Medicare providers to failing to pay interest on U.S. government bonds.    The U.S. has never fully defaulted before, but this isn't the first time it's come close thanks to a political stalemate. Back in July 2011, political leaders reached an agreement two days before the Treasury's estimated deadline.    Standard & Poor's wasn't impressed and in August 2011 issued the first-ever downgrade of the United States' credit rating, sowing panic among investors who drove an 18% skid in the S&P 500.    Most financial pros don't think the U.S. will default, but getting close to the deadline can still have consequences for investors. As was the case in 2011, the longer this drags out, the more you should be bracing for volatility in your portfolio. Read More Money Tip of the Week: 2 tips for investing in real estate from a millennial millionaire   Todd Baldwin knows a thing or two about investing in real estate. From converting his basement into a rentable apartment to buying homes to rent out on Airbnb, he's used real estate deals to boost his income on the way to a net worth of more than $4 million.    Here are Baldwin's top two pieces of advice for building wealth through real estate.    Get your finances in order before buying. For Baldwin, that means stashing away cash by cutting your living expenses. To this end, consider roughing it for a bit when you're young, says Baldwin. "You can get roommates when you're 22; you won't want them when you're 42."   While you're piling up the extra cash, work on polishing your credit score, he says. Putting everyday purchases on a credit card and immediately paying it off can help.    When you're ready to buy, be picky. Baldwin has never lost money on a real estate deal, and credits this success to his selectivity in choosing investments. He won't buy a property unless it meets five criteria:    1. A bedroom-to-bathroom ratio of 2-to-1 or less 2. Enough parking spots for the expected number of tenants 3. A location going through a transition, such as an uptick in new businesses opening or a new grocery store going in nearby 4. No homeowners association fees 5. Close proximity to public transportation Read More Next Gen Investing: How 3 companies plan to incorporate A.I. Artificial intelligence chatbots such as OpenAI's ChatGPT are being heralded as the technology of the future. But AI is likely already present – or soon will be – at a store, restaurant or supermarket near you. Here are three companies that are already using it.    Microsoft. In March, Microsoft announced a new set of AI features, dubbed Copilot, will be added to its Microsoft 365 software, which includes Excel, PowerPoint and Word. When using Word, for example, Copilot will be able to produce a "first draft to edit and iterate on — saving hours in writing, sourcing, and editing time," Microsoft says.   Walmart. The retailer is using its fleet of automatic floor scrubbers to help keep shelves stocked. As the scrubbers clean, they also capture images of every item in the story to monitor inventory levels. The company's algorithms can discern the difference between brands and determine how much product is on the shelves.    Wendy's. Next time you order a square burger at a drive-thru, you may be talking to an AI chatbot. The result of a partnership with Google, Wendy's plans to launch its "Wendy's FreshAI" pilot program in June at a company-operated restaurant in Ohio. Read More Pitch your business Want to take your small business to the next level? CNBC's Small Business Playbook is teaming up with TODAY's Steals & Deals franchise to search for new products. Learn more and submit your brand's pitch by June 2, 2023. Learn More Worth the Money: Bodum Bean cold brew coffee maker — $14.79 I've had my Bodum Bean cold brew coffee maker ($14.79 at Target) for well over a year, and it has saved me countless dollars on coffee. I started brewing my own (hot) coffee at home during the height of quarantine and have continued despite returning to in-office work (where there is free coffee) because I like the routine of preparing and having a cup in the morning before I leave home.    But I do prefer to drink iced coffee throughout the warm summer months, so I was excited to try this low-cost, low-effort cold brew maker. I love it because I make several days' worth of coffee in less than five minutes, and I'm not nearly as tempted to spend at least $5 on an iced coffee on my way to the office. I make my cold brew at home with regular packaged coffee grounds for probably less than $1 a cup.   —Kamaron McNair, Money Reporter Chart of the Week: Enjoying this newsletter? Forward to a friend and subscribe. Unsubscribe Manage Newsletters Digital Products   Feedback Terms of Service Privacy Policy   © 2021 CNBC LLC. All rights reserved. A property of NBC Universal. 900 Sylvan Avenue, Englewood Cliffs, NJ 07632 Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes and Market Data and Analysis. Data also provided by THOMSON REUTERS