ALBERT LEA, Minn.- For the first time in about a decade the Federal Reserve has raised its main interest rate by .25% to .75%. That’s still historically very low, but this hike rewards savers and hurts borrowers.
Interest on loans and credit cards will go up proportionally, but so will savings interest rates. You might not notice the change right away, but you will a few years from now.
With the rising interest rates and lots of holiday credit card charges, we have some tips to relieve your debt stress.
“I think every mom knows in their mind about what they’re comfortable spending and really smart moms set that a little less than what they might actually spend,” said Mariah Lynne of Hartland.
According to a new survey by Magnify Money, on average consumers are now $1,003 more in debt because of the holiday season.
Brian Hensley is a Financial Adviser with Intego Insurance Services and he says budgeting will help you stay out of debt trouble.
“The best thing to do is plan ahead with each family member and know what you’re going to spend on them and budget accordingly, but we get into that spirit and we spend too much,” said Hensley.
If you’re someone who swiped your card a little too much these past couple of months that’s okay, it just might be a little harder to pay off your bills at a reasonable time.
“The first thing you need to do is recognize if you did over spend that you’re going to have some larger bills than you expect and if you have to pay the minimum on some of them that’s okay,” said Hensley. “Just get through that time period, but then really think about why that happened and plan ahead so that next year it doesn’t occur.”
Lynne is someone who sticks to a budget, but she knows when to spend a little extra.
“The time that I do bend the budget though, is at Christmas,” said Lynne. “If you have a child that really wants something and it’s really special to them and it’s going to be $10 to $15 more for that one item you’re just going to do it,” said Lynne.
Another way to avoid over spending is using cash at the checkout line instead of credit cards.