Welcome to 2022 — the year of uncertainty. There is so much going on in the world as we turn the page on 2021 that could impact your money. I think of what we are facing as the 5 I’s. So here they are for your consideration.
There is no doubt we are experiencing the first real inflation we have seen in many decades. How you make your spending decisions and budget your household’s needs will become increasingly important.
2. Interest Rates
What will happen to interest rates in the new year? Will the Federal Reserve increase rates faster than expected to attack inflation? We hope you have taken steps to refinance your debts to take advantage of the low rates in effect as we begin the new year. If not, you still have time to act to save money.
What will happen with COVID-19? What new variants will we see? Will we solve the problem of vaccinating the vast majority of our populations? Infections are our wild card as the new year begins. As we have seen, the pandemic has dramatically changed our lives and continues to impact almost all aspects of the quality of our lives.
What will happen to your income in 2022? It does not matter if you are young or old. Will your incoming cash be enough to cover the inflation impacted costs of life? For those still working, taking actions to increase your inflow will be important. For those retired, carefully managing the returns on your accumulated savings will be paramount. Regardless of your stage of life, increasing after-tax income will be critical to financial success in the new year.
I could not prepare of list of uncertainties for 2022 without highlighting what will happen in our political system. We will have a federal mid-term election where the balance of political power and legislative direction will be at stake. At the same time our country will absorb the impact of expected Supreme Court decisions, student loan debt repayments starting again and the need for reform of our weakening Social Security and Medicare programs. What happens in 2022 will likely shape our lives for the near future.
Despite all that we face in 2022, I am optimistic about money matters. Why? Because I know that if you have a financial plan and your personal financial safety net in place you can withstand the challenges you will face. Preparation and planning are the keys to dealing with uncertainty. The FinancialVerse team will look to provide you with ideas and insights on how you can weather what will definitely be an interesting environment for your money.
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