With inflation at a 40-year high, the Federal Reserve is expected to announce another interest rate hike at the end of the month.
If you were planning to buy a new home, should you do it before rates rise again? What if you need to upgrade your car? And is it good to pay off your credit card completely, or should you carry a small balance to boost your credit score?
Financial columnist Terry Savage says the sensible thing to do during these times is to save as much as possible and if you can, it’s good to make some extra cash.
“If you can take advantage right now of the tight labor supply and perhaps work to make some extra money to have a savings cushion or pay down debt, that’s the right move to make,” Savage says.
The high interest rates also mean purchasing a home could be more difficult for some, but for first time home buyers it might be a good time to make that move.
“If you know you’re going to have a job, and if you have enough money to make a down payment, there are some great first-time home buyer programs, this would be a good time to lock in a home purchase,” Savage said.
With the possibility of a recession looming, Savage says the best thing to do is to be prepared.
“Prepare yourself now while you can. Get a job, make some extra money, pay down your debt because it looks like we should have six to eight months, maybe even a year of some tough times ahead,” Savage advises.