Planning your personal finance is an exercise which is unique for every individual according to their monetary goals in life. Some like to safeguard their financial plans through traditional options, including PPF and EPF, while others may prefer to choose market-linked products that carry bigger risks, but also bring higher rewards.
Apart from how risky the investor’s behavior is, a lot of factors affect the personal investment scenario and contribute to the forthcoming trends in the near future. As the current year is reaching its middle, personal finance trends are likely to be shifted. Let’s see what the summer of 2019 has in store for us.
Look for slightly bigger mortgage rates as interest rates continue to go higher. Even with this in mind, though, home prices are probably going to slow down their growth. They were moving higher, because of tighter inventory and higher demand as millennials get ready for purchase. However, with home construction companies picking up the pace a bit, inventory will grow and that should ease some of the pain. In addition, as more people start dipping their toes into home buying, rent prices should halt their increase as well. It’s crucial to pay attention to regional trends, though. It might be more difficult to find houses in particular areas, and there are markets that always see higher prices than others. If you’re looking to purchase, look for low-cost areas, like the Midwest, the South or suburbs. You might even be able to discover a few good deals when you search for short-sales and foreclosures. A few of those are still working their way through the market.
Student loan payments are piling up
And Americans are cutting back. Total U.S. student loan debt has reached $1.58 trillion. 8 in 10 U.S. adults with student loans (81%) make financial or personal sacrifices to meet their monthly payment, according to an AICPA survey. When taking a student loan, don’t take more than you can reasonably expect to earn in your first year in the field as your major. Ensure you first have exhausted every other available source of “free” cash before getting any kind of student debt. Meet with a financial advisor at school to discuss available scholarships and also look for scholarships online. Ultimately, ensure you are aware of the difference in pay-off options between Federal and private student loans.
Another trend that is coming in this year’s summer is the rise of payday loans. Payday loans are usually small loans which are repaid in full, including the service fee, the next time the borrower receives their paycheck. The name should have made this obvious. You can borrow within the range of $300-$2000, based on your usual pay. Because the amount you can borrow is based on your paycheck, there are no worries about borrowing too much. Payday loans can help those looking to borrow only a small amount of money. Maybe there is an appliance that needs to be repaired or a small car repair bill. Any higher than normal bills are covered, and you get the money to take care of a problem.
Retirement saving goals in limbo
Less than half of non-retired American citizens (46%) are confident they will reach their financial objectives by retirement, also according to an AICPA survey. Remember that it is never too late to start saving. A 401(k) can be one of your best tools for creating a secure retirement. It provides two key benefits. Firstly, the amount you put into a 401(k) account lowers the taxable portion of your paycheck in the current year. This means all contributions to your 401(k) will be tax-free – you’ll only pay taxes when the money is withdrawn. Next, many employers provide matching 401(k) contributions. If your employer does this, try to at least contribute the amount that lets you have the maximum amount. Otherwise, you’re walking away from “free money” Even a small contribution from each paycheck can transform into a lot down the road.
While some of these trends are devastating, while others are positive, each and everyone can be utilized to your advantage. The key is to educate yourself, research them, and you will be well on your way to save and maintain the health of your personal finances.