By Rachel Puryear
With interest rates rising in order to cool inflation, many people are feeling the pinch. It’s harder and more expensive to get loans, and the economy may also be slowing.
However, the good news is that it’s not all doom and gloom – rising interest rates can also present good financial opportunities that aren’t as good when interest rates are lower.
Here are a few ways you can make higher interest rates work a little in your favor:
It’s a Great Time to Be a Saver
If you’ve got money in a savings account/emergency fund, this is an opportunity to start earning more interest on that account. You might want to shop around to different banks for better rates – and of course, don’t forget to look at great offerings from your local credit unions, too!
Invest in Bonds
Bonds can give you a higher payout when interest rates are higher. Investing in bonds can be a great way to help diversify your portfolio.
It May Be a Good Time to Invest in Stocks, Too
If you’re in a position to invest money in the stock market and leave it there for the long term, doing so while economic conditions are slower and stock prices are down is a great time to do that. Buying low, leaving it there a while, and then selling high later on is a great way to build long term wealth.
Vanguard is an investor-owned company that makes it easy to invest in a diversified portfolio, even for beginners with no background whatsoever in finances. Plus, your hard-earned investments won’t be eaten up with fees and costs here.
Calling Cash Home Buyers
If you have the savings and the desire to purchase a home in cash and have been waiting for cooler market conditions to do so, now could be a great opportunity.
With mortgage interest rates increasing, buyer pools for homes are shrinking. But if you want to buy in cash, that’s not a problem for you.
Therefore, it could be a good time to make a cash offer on a house, as you won’t be competing with nearly as many prospective buyers are you were several months ago.
It Might Be a Good Time to Refinance, Depending on Your Circumstances
Ideally, people want to take out loans and refinance them during periods of low interest rates, not higher ones.
Recent years saw lots of historically low interest rates.
But if you missed that boat and still want to refinance debt that carries high interest rates, now might be a good time to do so, before interest rates go over higher than they are now.
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Thank you, dear readers, for reading, following, and sharing. Here’s to making the most of the situation.
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Check out my other blog, too – World Class Hugs, at https://worldclasshugs.com. It’s about better navigating relationships and life as a highly empathic person, and traveling and nature photos.
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