CHARLOTTE, N.C. — Inflation is creeping back down from its highest level in 40 years, but according to finance site Wallet Hub, it's still hovering around 3.7%.
The Federal Reserve may still hike interest rates to continue cooling down inflation.
"When the Fed raises the rates, the banks are raising the rates," Brian Li, co-founder of Three Coins Consulting, explained. "So it's getting more expensive to borrow. So if it's more expensive to borrow money. That's going to affect our mortgages. That's going to affect our car loans. That's going to affect credit card interest rates."
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Li teaches personal finance at Providence Day School in Charlotte. He offered some tips on what to do with your money now before those high interest rates trickle down to all consumers.
Pay down your debt
"When rates are higher, it's really a good time to pay off that credit card debt," Li said.
Save, save, save if you can
"If banks are charging more to borrow money, the flip side is that savings rates are up, so this is a great time to bolster a savings account in a high yield savings account," Li said. "A lot of them are offering 4% right now."
Remain patient with your portfolio
When it comes to investments, Li said if you're years out from being in a position to retire, the name of the game is patience.
"It's not really about timing the market, but time in the market," Li said. "Long term, steady investments in a well-diversified, low-cost, broad-based group of index funds that cover various sectors. That's going to be their best bet because timing the market typically is not going to lead to good results."
Contact Jane Monreal at jmonreal@wcnc.com and follow her on Facebook, X and Instagram.
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