During inflationary times, the value of money decreases, affecting your buying power. At the same time, the Federal Reserve raises rates to keep inflation in check, making it more expensive to borrow.
If higher interest rates and inflation have put a strain on your finances, here are some ways to manage spending and debt, and boost your savings.
Revise Your Budget
Track your spending and cut extras like streaming services or eating out by 5%. You might be able to lower the cost of services by switching to a different plan or bundling products. Contact each biller to explore ways to reduce future bills or look for special offers from other providers. There are also secure apps to help you save on gas and food, and manage a realistic budget.
Pay Down Debt
Eliminating debt as quickly as possible reduces the total interest you pay on borrowed funds. Paying off the highest-interest rate accounts first could save you the most cash as the costs of living increase. Consider selling unwanted items or working a second job until you pay your debts in full.
Transfer High-Interest Credit Card Balances
The national average interest rate on credit cards is 23.39%.* High-interest rates can put a strain on your finances, especially if you’re carrying balances. Consider transferring your debts to a credit card with a promotional 0% interest rate and no balance transfer fees.
As an alternative, you may want to consider a low-interest rate personal loan1.
Refinance Student Loans
If you left college with debt, monthly payments may account for a significant portion of your monthly expenses. Like credit cards, private student loans typically have variable rates that increase as the Fed raises rates. Eligible borrowers should consider refinancing this debt to save money each month.
If you have a federal loan and are struggling to make payments, read Understanding Student Loan Forgiveness to see if you qualify for loan forgiveness.
Review Your Insurance Coverage
If you haven’t reviewed your insurance in a while, a comprehensive review is designed to help you identify potential savings opportunities such as bundling your auto and home policies and taking advantage of all discounts available. For instance, the Credit Union has experts who will help you compare options, even if that means staying with your current provider.
Ways to Boost Savings:
- Share Certificates
As inflation rises, share certificates,2 provide a low-risk way to capture a higher rate of return. In exchange for a commitment to leave your money untouched for a preset time, you receive a guaranteed rate of return. With a SchoolsFirst FCU share certificate, you can choose to park your money for a minimum of 30 days, up to 60 months.
- Money Market Accounts
A money market account2 typically offers higher rates than standard savings accounts rates and features usually includes debit cards and check-writing abilities. Most accounts require a minimum deposit to open, but they’re a great way to build savings, especially for short-term goals like buying a new car or a down payment on a home.
Get Help When You Need It
If you’re having trouble paying your SchoolsFirst FCU bills, please talk to a Member Recovery Representative who can discuss your options and offers solutions, putting your best interests first.
And to work on an action plan to manage your money better and reduce debt our financial partner,
GreenPath Financial Wellness3 offers complimentary one-on-one coaching.
*Source: Lending Tree. 1. All loans subject to approval. 2. Insured by NCUA. 3. When you click on external links, you are linking to alternate websites not operated by SchoolsFirst FCU, and SchoolsFirst FCU is not responsible for the content of the alternate websites. The fact that there is a link from SchoolsFirst FCU’s website to an alternate website does not constitute endorsement of any product, service, or organization. SchoolsFirst FCU does not represent either you or the website operator if you enter into a transaction. Privacy and security policies may differ from those practiced by SchoolsFirst FCU, and you should review the alternate website’s policies.