Zinger Key Points
- Despite high inflation, the Federal Reserve's interest rate hike makes saving more lucrative.
- Experts advise reviewing past spending and communicating about gift expectations to manage holiday budgets.
- Discover Fast-Growing Stocks Every Month
With the festive season on the horizon, consumers are grappling with the dual realities of persistently high prices and the allure of increased savings.
What Happened: The recent uptick in inflation has not eased the cost of goods significantly, while the Federal Reserve's decision to hike interest rates to a level unseen in two decades has made saving more appealing than ever.
Every dollar spent today could potentially miss out on returns as high as 5% from savings avenues like savings accounts, certificates of deposit and bonds.
Moreover, the elevated interest rates have made borrowing more expensive, with credit card rates sometimes nearing 30%.
According to The Wall Street Journal's report, given all of this and the fact that consumer spending is expected to rise during the holidays, experts in finance and behavioral economics are strongly encouraging the public to save while they can.
Also Read: One-Third of Consumers Willing to Spend $10 or More on Shipping This Holiday Season
Financial experts suggest a comprehensive review of past holiday expenditures and planning for the entire range of holiday expenses in one go to combat overspending. According to The Wall Street Journal, Matt Fizell from Harmony Wealth advises a detailed analysis of bank and credit card statements to identify and cut unnecessary costs.
Open communication about spending limits with friends and family is another effective strategy. Lauren Mathews Fairey, a financial educator at WealthWave, emphasized to the publication the importance of these discussions.
Related stocks and ETFs to watch in this context include Visa Inc. V, Mastercard Inc. MA, SPDR S&P Retail ETF XRT, and Vanguard Consumer Discretionary ETF VCR, as they are closely tied to consumer spending trends and credit card usage.
Now Read: Americans Face Historic Lack Of Affordability In Housing Market, Data Shows
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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