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Interest rates are rising: what can you do?
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Interest rates are rising: what can you do?

Money tips for women during economic uncertainty and surging inflation

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.

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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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