Welcome to our #127 weekly newsletter.
“For women taking control of their financial future”
-Jana Hlistova
From The Purse
In this week’s newsletter, we focus on rising interest rates and what this means for your money.
We know that women have been adversely affected by the pandemic, so what can they do to ensure they are outpacing the surge in inflation and protecting, if not growing, their net worth?
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And you can review the news in brief so you stay on top of global financial, economic and investing trends.
I hope you enjoy this week’s newsletter.
Until next week,
Jana
Interest rates are rising: what can you do?
Money tips for women during economic uncertainty and surging inflation.
Interest rates are rising, as central banks try to control surging inflation (well above the target 2%).
In the UK, inflation has risen to 9.4% (and could rise to 15%+ in early 2023). Whilst US inflation is almost as high at 9.1%.
Last week, the US Federal Reserve raised interest rates for the fourth time this year. And the Bank of England (BoE) introduced the biggest hike in 27 years to 1.75%.
Sharp rises in energy costs is pushing up the cost of living.
But according to Resolution Foundation (UK thinktank), price pressures were likely to be stronger and last longer than the BoE had previously forecast.
So what does this mean for women who have been hit hardest during the pandemic? And what can women do to protect, if not grow their money and net worth?
Take advantage of the labour market
Now is the time to return to the labour market or make moves. The labour market is hot as employers are hiring but struggle to find and retain talent.
As more roles remain open for longer, the balance has shifted in favour of the employee. Employers are having to work harder to retain employees and are more likely to agree to a salary increase.
Moreover, employers who are hiring are willing to offer more money plus benefits to attract the right talent.
Consider applying for roles with the aim of receiving more than one offer and at least a 20%+ increase on your current salary.
If you wish to stay with your employer, you will have leverage when you are ready to ask for more money and negotiate. If they refuse, you can decide to take up one of your job offers.
If you are a freelancer or a sole trader, consider raising your rates by 20%+. And look for new clients who can afford your rates and are comfortable paying them.
Remember to increase your savings rate and invest more of your money, on a monthly basis.
Cut down on expenses and pay off your debt
Now is a good time to review your spending habits. Identify expenditure which you can cut immediately.
Are you eating out or spending too much on your monthly gym subscription?
Try replacing an expensive spending habit and start tracking how much money you save a month. Better yet, direct the money saved towards paying off your (credit card) debt.
Check your progress every week or every month. And don’t forget to celebrate your new money habits.
Explore other options
Consider a balance transfer card with zero percent interest, depending on your situation. And search for savings accounts offering higher interest rates.
However, given the surge in inflation, remember it is costing you more ‘just to keep up.’ And a 1.25% interest rate on your savings account will not make up for rise in the cost of living.
Unless your salary goes up by 9.4%+ this year or you are generating at least 9.4%+ more income from your other sources or investments, you are losing ground.
Speak to a financial adviser for advice on how to ensure you can make up for the financial shortfall (if you have one).
For example, investing more of your monthly income into your pension can help. There may also be tax incentives you can take advantage of.
Consider investing a small percentage of your overall net worth into alternative investments on a regular basis. This can generate a higher return over a longer time period (within a balanced and diversified investment portfolio).
For example, consider investing in bitcoin via a crypto exchange.
Keep learning
Learning about how to manage your money and grow your net worth is a lifelong habit.
Start by reading about the economy and how this affects you and your money.
Commit to spending one hour a week to learning, reviewing your spending and checking in on your investments, including your pension.
Make changes as needed. And connect to other women and financial experts who can support you in your journey.
Know your worth, negotiate more money and grow your net worth.
What next? (Re) listen to The Purse Podcast:
#37: Marriage and divorce: how to manage your money with Mary Waring
#44: How women can build a healthy relationship with money with Dr. Kate Levinson
#63: Inflation, stagflation and are we heading for a recession with Vicky Pryce
News in Brief
Financial news
The markets see a 2-in-3 chance of a 75 basis points Fed hike in September after booming US jobs data.
US 2 year yields jump after US jobs report showed a booming labour market that might prompt the Fed to raise rates more sharply.
The Bank of England (BoE) launches biggest rate hike (+0.5ppts) in 27 years as inflation soars to 9.4%. The base rate is now 1.75%.
UK inflation could reach 15% by start of 2023, experts say. Resolution Foundation says BoE likely to forecast higher and later peak. Energy bills across Great Britain are expected to soar to more than £3,000 a year in the final quarter of this year.
Revenge of the ‘old world economy’: Exxon generated more free cash than Alphabet for the first time since 2018. Exxon is number 3 in the S&P 500 behind Apple & Microsoft. Chevron jumped up in the ranks with cash inflow to number 5.
Crypto: bitcoin, ethereum, DeFi & NFTs
Bitcoin reverses course, pushes higher, $21k is ‘point of control’. Bitcoin rebounded on Wednesday, advancing 1.7% to above $23,300, ending a streak of five consecutive negative days. (See the current bitcoin price).
Citi report: Ethereum will be both yield-bearing and deflationary, therefore less likely to be the blockchain with the highest throughput. Given its ‘enhanced store-of-value properties,’ it is more likely to be where a growing amount of total value locked is secured and transacted, the note said. (See current ether price).
Solana's SOL token holds price support despite hack: early Wednesday, an unknown attacker drained at least $5m of SOL and other tokens from Solana digital wallets. However, SOL held on to a critical support level.
Susan Miller breaks into NFTs: The astrologer’s zodiac-themed non-fungible token (NFT) collection and token-gated Discord channel is her first venture into Web3. The collection of 12,000 digital profile picture (PFP) collectibles will be released on the Polygon blockchain on Wednesday.
Coinbase selected by BlackRock; provide Aladdin clients access to crypto trading and custody via Coinbase Prime.
Coffee Break? Read This
We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.
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The Purse provides content for informational purposes only, we do not recommend products or services or provide investment advice. Please do your own research or speak to a financial adviser.
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