In the sea of opinions, you have probably heard everything from, the economy is in a little slump and on its way back to, we are on the eve of destruction and it’s going to be a blood bath.
Just for review, we are experiencing the federal step in with the FED raising the interest rate of what they sell funds to the banks for, as a result of the massive dollars distributed in 2020, 2021 and 2022. Government give aways are not paid for by those making the distribution they are paid for by the American people.
I have lived through three recessions and although I have no predictions on the final impact or when it will actually take place, I do know three key points for you to focus on to help you maneuver through.
1- Watch inflation, not where it is but the difference between where it is and the goal of the FED which is 2%. This will give you and indication of their rate adjustments yet to come which again impacts the cost to banks who are borrowing money which is then in turn passed on to the consumer in their cost of borrowing to buy a car, a tv, or a house.
2- Have a household debt evaluation to make adjustments on the nice but not necessary. This will allow you to keep the budget in an achievable mode.
3- Have cash reserves. This will buffer you should you experience a job set back, or if you have rental property and a tenant doesn’t pay on time or moves out. Hand in hand with having reserves …don’t distribute it all out, don’t spend it all.
In A Nutshell . . .
Check in to get a comparison of payments in March and payments now to see your advantage in locking in your purchase now before the next rate increase.