Wealth and Wisdom: Week of December 19, 2022

Here’s how to understand what’s going on right now with inflation and interest rates.

Inflation is now running at a rate of 7.1% year-over-year. That number has fallen for five months in a row, but it’s still too high for anyone’s liking. In response, the Federal Reserve pushed interest rates another half-percentage point higher last week, bringing the fed funds rate to a range of 4.25% and 4.5%.

The Fed’s goal is to get those two numbers – inflation and the base interest rate – to meet in the middle, perhaps somewhere in the neighborhood of 5%. And the less it has to raise rates to coax down inflation, the less chance we’ll see a severe recession next year. If inflation keeps coming down on its own, we might even escape an economic downturn altogether, though most economists now consider a “soft landing” unlikely.

When will inflation return to normal?

Economists say the worst may be behind us – but the return to inflation’s historical average could take a while. (Reading time: 5 minutes)

The double-squeeze of inflation and debt

Inflation is driving up costs, which is driving up credit card balances – just in time for the Fed’s latest interest rate hike. Ouch. (Reading time: 5 minutes)

An investment approach for volatile times

If you’re trying to build wealth, dollar-cost averaging can help turn uncertainty and volatility into opportunity. (Reading time: 2 minutes)

Year-end tax moves to consider

You may have until next April to file your taxes – but if you’re trying to lower them, time is running out. (Reading time: 5 minutes)

Smart Ways to Gift Money to Children

Being generous is one thing – doing it for the benefit of you and your children at the same time is another. (Reading time: 4 minutes)

How safe are online budget trackers?

Here’s a comprehensive review of seven ways to use technology to control your spending – and how they safeguard your information. (Reading time: 10 minutes)

Are you retiring in 2023?

Follow this 6-step process to help make your transition a smooth one. (Reading time: 4 minutes)

IRAs come in many forms

All of them promise tax-deferral, but the one you choose should be based on your goals, eligibility, and personal situation. (Reading time: 5 minutes)

Managing money with your spouse

This baby boomer can’t understand why spouses would ever separate their finances. Do you agree? (Reading time: 2 minutes)

A fresh start for 2023

Here are some key dates to remember for the first three months of the year – and some items to put on your financial to-do list in 2023. (Reading time: 2 minutes)

Words to the Wise

“I’m always fully invested. It’s a great feeling to be caught with your pants up.”
Peter Lynch

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