Protecting Your Money Amidst Rising Inflation & Interest Rates
I heard someone very smart recently say that if you aren't already working to cut expenses or increase your income, you're already behind in today's economy.
It seems like every morning we wake up to another story about out-of-control inflation. We're talking 40-year record highs. What does that mean for you and how can you protect your money?
If you're like me, you want to protect your money, even if you don't have much.
We're not known for being the most fiscally responsible here in Louisiana and in the last few months, I've taken an active interest in preserving the money I have and trying to build upon that for retirement. Of course, the ultimate goal is financial freedom. I want to be able to replace a faulty hot water heater without stressing about it if the need arises and winning the lottery isn't a sound plan for retirement. Many of us are just one missed paycheck away from financial ruin and I don't want to live like that anymore. So, I've been doing a lot of reading and studying, and while I'm no expert, here's what I've found.
Inflation means we're paying more for products because the cost of doing business is higher... and your dollar simply doesn't go as far. I think we're all experiencing this at the moment.
How does this affect you? Open your wallet. How many credit cards are in there? Are you carrying a balance? Interest is the 'fee' you pay for borrowing money. That lunch with the girls last month that you put on your credit card? Yep, it's fixing to cost you way more than you thought if you don't pay that card off.
3. You'll need more money to make ends meet if inflation and interest rates continue to rise
Can you count on a raise at your job? If not, can you cut expenses elsewhere?
I'm not a financial advisor, but I'm considering getting one. A few of the moves I've made to combat rising inflation and interest rates is to take out a debt consolidation loan from Barksdale Federal Credit Union. I'll be able to pay off my credit card debt in five years at a locked 9.886% interest rate for less than what it would cost me to continue making the minimum monthly payments I have been indefinitely on the individual cards I have at 11.9% and 14.9% interest. I'll be saving THOUSANDS!
I've also reworked the loan I already had against my 401K. I was able to get a few thousand out as a security net AND lower my monthly payment, which puts more money in my pocket each pay period.
I'm also considering refinancing my mortgage. I'd like to potentially get rid of the PMI (Private Mortgage Insurance) I'm currently paying. That means more of my payment will be going to paying down the principal, lowering the length of my loan.
Once again, I'm not a financial advisor, these are just small steps I've taken to take control of my finances, free up cash and pay down debt. My next goal is to start creating passive income. If you're on the quest for financial freedom as well, I wish you luck!