As part of the new announcement of the fedwhich has been raising interest rates for several months to combat inflation, which is influenced by factors such as shortages in supply chains, the health crisis caused by the pandemic, and political, economic, and social conflicts from the invasion of Russia in Ukraine, it is important, as consumers, to know the best ways to take care of income.
Although the economy shows signs of recovery, as is the increase in job offers, it is important to maintain a spent moderate, in order to continue saving, especially now that interest rates offer better returns.
5 tips to take care and grow your money
- The time to move is now: if you are looking for a better job offer, the market is active and will allow you to move or find a position with good conditions, however, this scenario can change from one moment to another if the economy takes a downturn. It’s important to keep your resume up-to-date and stay on top of trends in areas of greatest interest.
- Build an emergency fund: it is about having liquidity in the face of an unexpected event, that is, having cash available to cover your fixed expenses for at least three months. For those who are close to retirement age, this fund must provide more or less one year of fixed expenses, so that the pension or retirement instruments are sufficient and there is the opportunity to invest a fraction to obtain extra income.
- Invest: having savings is the first part of a strategy, however, moving on to the second part, which is investment, is what really gives you the possibility of having extra income. For many people, the idea that it is an activity for professionals still persists, however, there are different digital tools to invest in portfolios of different types of risk. A good way of looking at investment is that when you have savings in a checking account, its value decreases as inflation increases, that is, you lose money constantly, which is different from when you have it invested, which, although you may have losses, you are likely to have gains as well.
- Avoid credits: the tendency of monetary policy will be to keep interest rates rising, and this means that credits will be increasingly expensive, especially consumer credits, such as your card. Therefore, it is extremely important not to have outstanding balances and to make the payment in full, to prevent interest from making you pay more.
- Constancy: one of the most frequent mistakes when building financial stability are the “permissions” that start as something occasional to cover an expense, a gift, a dinner or something similar, but that eventually become something constant that affects the ability to save and invest.
“Don’t let your feelings about the economy or the markets sabotage your long-term growth. Keep investing, be disciplined. History shows that what people, or even experts, think about the market is often wrong. The best way to reaching your long-term goals is simply to keep investing and stick to your investment,” ensures Mari Adam, a certified financial planner based in Florida.
George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.