Smart Ways to Protect and Save Money in a Tough Economy
| Posted in Bank Blogs
Rising rates. Volatile markets. Record-level housing prices. Today, in the world of finance, it's tough out there. And with everything going on, it may seem like you don't have a whole lot of control of your money. But the truth is, you really do.
There are actually some pretty important and easy steps you can take right now to help reduce your risk and get more out of your money. These include:
- Reducing debt. Now, when interest rates are soaring, is a great time to work on shedding credit card and other high-interest debt. If you have extra money sitting in savings, consider using it to pay down your debt. Or, if that's not possible, find a balance transfer offer and consolidate your debt to a lower, fixed-rate loan.
- Locking in variable rates. If you have a home equity line of credit, now's a great time to convert it to a fixed rate. With a fixed rate, you'll have regular monthly payments that will stay the same even if interest rates continue to rise (something they're expected to do).
- Building your savings. The higher rate environment isn't all bad news. It's a great opportunity to earn more interest on your liquid savings. Consider opening a money market account or a CD. To make saving even easier, set up automatic transfers or direct deposit to savings. The money you save can be a safety net to help protect you from life's unplanned events, such as job loss or car repairs.
- Not being a reactive investor. We get it – the day-to-day volatility in the stock market can make even the calmest of investors anxious. The worst thing you can do, however, is make knee-jerk decisions. Before you buy or sell anything, do your research or talk to a professional to review your goals and risk tolerance.
- Avoiding unscrupulous lenders. Challenging financial times often bring out unscrupulous lenders and financial professionals who want to "help" you. Don't do business with any lender or professional without doing your research.
- Putting your home buying plans on hold. With rising mortgage rates, exorbitant home prices, and low inventory, now is not the best time to buy a home. Waiting until the market settles down may be a smart financial decision.
The most important thing you can do is to stay calm. Remember, nothing (not soaring rates or rising inflation or overpriced housing) lasts forever.