Interest Rates, Savings & Debt is an area of planning that should be priority for both individuals and businesses, especially in current times.
Since the beginning of the year and with all that has transpired, interest rates that were already low have moved even lower and are expected to remain low for some time. This creates both opportunities and concerns that can be addressed with some planning and diligence.
OPPORTUNITY: What if you could find an extra $100, $200 or more each month to keep in your pocket? Interest rates have continued to test historical lows and continue to move lower. If you are carrying ANY debt, such as a mortgage, auto loan, personal loan, etc., it is highly recommended that you review these types of debts. Find out if you can reduce your interest rates and create more of what we call “positive” cash flow. Your newly discovered “positive” cash could even be significantly higher, making a substantial difference that you could then plan either to boost up savings or use it towards accelerating the paydown of the debt.
CONCERN: With savings and other interest earning accounts, low rates are reflective of what is being offered for your money that you need to keep safe and available (such as emergency funds). You do want to keep your money working for you and again we highly recommend reviewing those accounts. If you do not currently have an emergency fund account, you may want to consider setting one up and finding the best option to get you the highest available rates. These accounts are earning in a range of .01% up to 1%, which may not seem earth shattering, but that extra in your pocket is always an advantage to you.
Combining your positive cash flow from debt and making your savings work for you, is a powerful combination! It can add up and help you to be in a better position with your planning and more prepared for times like these.
As always, please reach out to us with questions or guidance with the topics and resources, we are here to help.