2022 was not a super pretty year when it came to the economy. Interest rates skyrocketed. Hiring freezes came into effect.
Yet despite all of this, we are currently seeing low unemployment rates and a high demand for workers. This is a good sign for the economy.
Though this doesn’t change the stress and concern that Americans have about how inflation will continue to cause a scene into 2023.
Interest rate increases
The Fed raised the fed funds rate by 50bps to 4.25%-4.5% during its last monetary policy meeting of 2022, pushing borrowing costs to the highest level since 2007, and in line with market expectations. This is the seventh consecutive rate hike, following four straight three-quarter point increases.
Many think that interest rates will continue to increase in the beginning of the New Year and then taper off as we get closer to the end of 2023.
“Inflation will be far stickier than most anticipate, as the economy continues to absorb the massive surge in the M2 measure of money the Fed injected into the system in 2020 and 2021,” says Daniel Milan, managing partner and investment advisor representative at Cornerstone Financial Services.
It’s a fine line here as if we push too hard in one direction, that’s when a recession scare becomes that much more apparent.
Expecting inflation to remain where it is, or increase slightly, what can Americans do to prepare for more financial stress?
Some easy tips to save money
- Record your spending to hold yourself accountable to your purchases
- Avoid social media if not for mental clarity but to avoid targeted ads
- Schedule a home energy audit (you can usually save some money here)
- Cancel unnecessary subscriptions
- Plan fun, unique staycations instead of distant vacations
- If you need something specific, pop over to the nearest dollar store
- Read more via the library
- Take time outside to walk to closer destinations rather than drive
The list here can be endless on smaller things you can do at home and nearby without even spending a penny.
This time is a good chance to pause and reflect on upcoming budgets and where you want to be financially in the next year, 5 years or 10 years. More about financial goal-setting here.
Benefits can be a huge help to employees in these economic times as well. To read more about some benefits that employees could benefit greatly from, click here.
TrueConnect’s Financial Wellness Platform is a no cost program that takes little effort to implement and manage. Want to learn more about TrueConnect’s Financial Wellness Platform? Click here