If you’ve been following major headlines in the media recently, you sure have read about interest rates, inflation, the Federal Reserve, and a potential recession. As the Federal Reserve recently implemented its 10th interest rate hike in its effort to combat inflation, many individuals continue to discuss the possibility of a looming recession on the economy. So, in response to the state of the economy with rising interest rates and inflation data, many individuals are revisiting ideas on their budgets and cash, stashing away more cash and cutting out unnecessary items from their budgets.
Although this week we saw retail sales increase 0.4% in April, indicating shoppers are picking up spending, over the last few months many Americans have cut back on shopping. According to recent reports from Bank of America Institute and Deloitte, American consumers are cutting back on their spending and saving more. In fact, now “71% of Americans are likely to keep cash on hand,” and “to save more, about half of all adults are dining out less frequently and 42% have changed the way they shop for food”. Given higher prices to purchase goods yet also higher interest rates available on cash, many individuals are starting to take advantage of getting paid more to save.
Taking advantage of higher interest rates in this environment with your cash is extremely important and a great way to earn some extra cash. We’ve been talking about the best vehicles to park your cash in, including high yield savings accounts and CDs that are as high as the 5% range, earning well over the traditional bank account that’s still yielding around 0%. So, if you have adjusted your budget due to inflation and are finding yourself saving more cash, make sure you are maximizing the interest rate you can earn, making the smartest decision with your finances. If you have any questions about ways to best maximize your cash and your financial plan, email us at info@shermanwealth.com or schedule a complimentary intro call here. In an ever changing economic world, we believe that periodically revisiting your financial plan and strategies to align with the opportunities available to you is so important.
