She Strengthens

Financial Forecast: 6 Expenses to Budget for in the Year Ahead

As we enter a new year, it’s essential to stay ahead of the curve when it comes to managing our finances. With interest rates on the rise, changes in the job market, and shifts in global trade policies, our wallets may take a hit. Here’s what you need to know to budget wisely.

Debt: The Interest Rate Hike Impact

The Federal Reserve’s decision to raise interest rates will have a ripple effect on variable-rate debt, such as credit cards, mortgages, and auto loans. This means borrowers will pay more in interest payments. On the bright side, savers can benefit from higher yields on savings accounts, CDs, and money market accounts.

Shipping Fees: The Cost of Convenience

If you’re an online shopper or regularly send care packages, get ready for a price hike. FedEx and the U.S. Postal Service are increasing shipping rates, with FedEx raising rates by nearly 5% in January. To minimize the impact, consider batching online purchases to qualify for free shipping.

Travel: Flight and Hotel Prices Take Off

According to the Global Travel Forecast, flight prices are expected to increase by 2.6%, while hotel stays will jump by nearly 4%. However, choosing the right airline and destination can make a significant difference in cost. For example, flights in North America are projected to see a more modest 2% increase.

Home Sweet Home: Rising Housing Costs

A strong labor market and modest wage growth have led to increased demand for homes, driving prices higher. The average cost of houses is forecast to rise by 4.3% in 2019, with mortgage interest rates also expected to spike. If you’re in the market for a new home, it may be wise to wait until 2020 or 2021 when the market is expected to shift in favor of buyers.

Health Insurance: A Mixed Bag

While those buying health insurance through the ACA marketplace will see a slight decrease in costs, others may face higher premiums and deductibles. Using tax-advantaged health accounts, such as FSAs and HSAs, can help offset these increased costs.

New Cars: Tariffs Drive Up Prices

Tariffs on steel and aluminum imports have already led to higher car prices, and potential tariffs on foreign-made vehicles could raise them even more. If enacted, these tariffs could add nearly $7,000 to the cost of imported cars and trucks.

The Tariff Effect: A Ripple in Consumer Prices

The ongoing trade policies may lead to higher prices for a range of imported goods, including groceries, furniture, and electronics. While the impact may not be drastic, it’s essential to stay mindful of these changes and adjust your spending habits accordingly.

By understanding these upcoming expenses, you can take control of your financial future and make informed decisions about your spending. Remember, every small change can add up over time, so stay vigilant and plan ahead.