Though many of us have taken a considerable amount of time to plan our financial futures, Robert Burns once wrote, "the best laid plans of mice and men often go awry" – an especially popular quote in times of economic pressure and uncertainty. Rates, elections, and a recession – we’ve seen or heard of all three in 2024 and we’re only in February.
Even with positive savings habits, monitored spending, and established budgets amidst today’s current events, Americans continue to face difficulty achieving life’s big money milestones of education, homeownership, and retirement (popular cornerstones for the American Dream). Here's what’s impacting it all:
Interest rates influence our investment mix and other large purchases, which in turn affect our financial plan. According to the U.S. Bureau of Labor Statistics, the inflationary impact of COVID-19 has only recently begun to reflect in our Consumer Price Index (CPI). CPI is the most widely utilized measure for the nation's inflation rate and interest rate – these rates determine purchase affordability.
Election years have always been subject to candidates grabbing headlines. As debate ensues, it's important to stay our plan and not be swayed by daily news. The whole effort we have put into our financial plan has relied on the best information available at the time of planning, and even more so if you’ve worked with an expert – disrupting our plan could cause more harm than help in the long run. Stay strong!
And last, there’s talk of an economic recession – this happening would affect the measure of Gross Domestic Product (GDP). GDP is important because it gives information about the size and performance of the economy. Though professionals aren’t entirely certain about a recession in 2024, the importance of this possibility is heightened during these times.
What can you do with this information? Stay the course with your financial plan and discuss any uncertainty with your financial coach or advisor – make any adjustments warranted by the facts, not the headlines.
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