How Interest Rate Hikes Will Affect You in 2022

It may seem like we have all been inside a big protective bubble for the past few years now. One that has made interest rates we get charged almost a non-issue when it comes to many things in our lives. If you bought a home or refinanced one, or if you wanted a car loan, you’ve paid a lot less on those loans than ever in memory. That’s because the Federal Reserve (a.k.a. the Fed) had strategically lowered rates to zero at the beginning of the COVID-19 crisis in March 2020 in an attempt to soften the blow of the sharp recession that began that month as the U.S. went into lockdown.

The front of the Federal Reserve building representing how interest rate hikes will affect you

But now, the Fed has signaled plans to begin raising interest rates “soon” in a bid to tamp down inflation before it poses a serious risk to the U.S. economy. These interest rate hikes would be the first time the central bank has increased its benchmark lending rate in over three years. So by March 2022, you will be facing a new issue: Higher interest rates! How will it affect you?

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Get Rid of Credit Card Debt by the End of 2022

For today’s guest post on getting rid of credit card debt, please welcome Camron Hoorfar from DebtConsolidationCare.

While all loans weigh heavily on your financial health, credit card debts are the hardest to deal with. This is because your interest rates increase over time, and you get into more debt. For these reasons, it’s best to consider debt management plans such as credit card debt consolidation to avoid wasting your money on interest rates.

Money and a stopwatch representing the time to pay off your debt with credit card consolidation

Work on Your APR

High-interest rate credit cards can negatively impact your financial standing. Luckily, you can use some methods to lower your APR and save money. Typically, experts suggest that you simply call the bank and request a lower interest rate. They will review your track record to decide to approve your request.

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Debt Versus Investing: A Simple Solution!

For today’s guest post on debt versus investing, please welcome Jeff from Have Your Dollars Make Sense.

So I have often thought about and read about the idea of which is better when it comes to debt versus investing. Pay down debt or invest. This comes up a lot in forums, blog posts, etc. It seems to be a perpetual question and I get it. Who wants to be sitting in debt!? Being a slave to the man! That’s a big no for me. Debt flat out sucks and it can definitely limit all future choices… but on the other hand, we all want to build our net worth. We all want to build wealth. We don’t want to funnel all our cash into debt when it could potentially be earning more in capital gains in the market or elsewhere. So what to do… what to do?

Money gradually growing into more, as it does when paying down debt or investing

Debt Versus Investing

Max out all 401(k)s if there is a company match available

First off, max out all 401(k)s if there is a company match available. Free money is free money, right? Consider maxing out IRA accounts too due to the tax savings (if you make less than $117,000 as a single filer or less than $184,000 if married) and the beauty of the backdoor IRA otherwise. Okay, now that we have that out of the way, what about debt versus after-tax investments accounts?

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Avoid Debt, the Enemy That Can Drag Down Your Finances

Personal finance blogs are filled with stories about people who have overcome big personal debt over the years and then write about it to try to help you defeat your own debt. Debt is such a major problem! I get messages from regular folks who need help dealing with debt all the time. Of course the best way to deal with it is to avoid debt in the first place, but that’s easier said than done.

Cartoon of man trying to avoid debt with debt weight falling down on him

About 15 years ago, after my divorce, I too had racked up thousands of dollars in debt and when I remarried, my wife and I had a combination of over $25,000 in debt on our books (not including my mortgage). That isn’t a real good way to begin a new relationship and frankly, much of it was divorce-related expense, so that there wasn’t really even any shiny, fun stuff to look at and play with despite that debt.

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Paying Off Your High Interest Credit Card Debt Takes a Real Plan

I have always been a good manager of credit. A big part of that was learning from my mom and pop about spending within my income, but another part of that was that back when I was a kid, credit cards were not the way people paid for what they bought. Today it’s a totally different world and using your credit card is not only popular, it’s almost a requirement and the result is credit card debt.

Hand holding credit card, ready to get out of credit card debt

While Visa and MasterCard didn’t even exist until the 1960s and 1970s, everyone today seems to have one, two, or even more of them, and uses them constantly. That has led to massive overuse and huge debt run up for many people.

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How to Decide Which Debts to Pay Off First

Today’s guest post on paying off debts is sponsored by Credello.

If you have multiple debts you’re trying to pay off, you might feel overwhelmed. Which debt should you pay off first? Does it require high-level math (gulp) or a debt consolidation calculator?

Answers: It depends on your unique financial situation, you don’t need to be a mathematician (fear not, there are no riddles or word problems), and a debt consolidation calculator is very helpful but not absolutely necessary.

If you have multiple debts, you may be confused about which one to pay off first.  Here's how to pay off debt in the best order.

If you’re looking to find out which of your debts you should prioritize and how to pay them off, keep reading.

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Will Relationship Debt Destroy You as a Couple?

I was just discussing with my wife how these days we have planning resources for just about everything in life. We have health plans, retirement plans, wedding planners, and estate planning. You can plan a vacation with experts and plan where to go to college with sage advice when you need it. But despite the fact that we have marriage counseling and credit counseling available, they always come after the problems arise. And for unmarried couples, well, it may not even exist. “Couple planning” is left to the couples themselves and it can be a huge task to get it right. If there’s relationship debt, it gets even more complicated.

Relationship debt puts a serious strain on married and cohabiting couples. Here's how couples can plan to avoid big debt.

Debt can quickly and easily become a source of contention between a couple. That’s why it’s important to deal with relationship debt proactively, before it becomes a destructive force.

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Credit Card Debt, Stimulus Checks, and Spending

Do you often wonder how other people seem to make ends meet and you struggle with them? I have to reluctantly admit that over the years, I would look around and ask myself questions like, “How the hell can they afford that car?“ or “Where did they get the money for those three weeks in Europe?”

The U.S. is mired in credit card debt, and government stimulus checks aren't going to save us. We need to control our spending.

I seemed to work my rear end off and yet somehow I was never quite there—where they were. I realize now what a waste of time beating myself up about that was, but I did it and I’m sure I wasn’t alone. In my older, wiser years, I now know that big debt often is the way it was accomplished.

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