By now, you know that the Federal Reserve made a decision to raise interest rates by 0.25 percentage points. If you hadn’t heard the news, catch up in a previous post. Now you may be asking, what does this mean for me and my finances? For our inaugural “Tip of the Month” blog post, I’d like to highlight what investors should take away from this news event.
Tip: Relax. Historically, we’re still at low levels. Just because we haven’t seen these levels in the last eight years doesn’t mean we’re in trouble. This is still a low interest rate environment and there’s plenty of time to take advantage of that.
However, if you have been on the fence about making a big purchase, like buying a car or a house, now may be a good time to act. In addition, if you’ve been on the sidelines and haven’t gotten into bonds, now may be a good time to do so because now you’ll be getting paid for saving as opposed to prior years.
If you have student loans, don’t worry, you should be locked into your rate and the higher interest rates should not affect current loans.
What’s the main takeaway? Although we’ve seen a big movement in the last month, rates are historically still extremely low.