Boost Your Personal Finances in 2024 by Using These 3 Money Tips From an Economist
By Jessel Renolayan
Nov 12, 2023 11:50 PM EST
Nov 12, 2023 11:50 PM EST
As the financial landscape braces for potential economic challenges in 2024, consumers are encouraged to adopt a strategic approach to their finances.
Dana Peterson, chief economist at The Conference Board, recently shared invaluable insights at CNBC's Your Money event, emphasizing the importance of budgeting, debt reduction, and saving amid rising interest rates.
According to CNBC, Peterson said this "three-point action plan" is important for households since there is "a high risk of recession" in 2024, probably in the year's first half. However, she added that the recession would not likely last long, estimating it would end in the second half of 2024.
Dana Peterson advised consumers to monitor their weekly budgets. According to her, consumers can "economize" by looking at their weekly budgets and trimming expenses where possible.
"Economizing" involves identifying areas where expenses can be trimmed without sacrificing essential needs. That may include opting for store-branded items over brand-name products and choosing cost-effective entertainment options, such as streaming services at home.
Peterson also acknowledged the lingering effects of pandemic-era inflation, which rapidly ate household budgets. According to CNBC, the pandemic-era inflation scoffed household budgets at the fastest pace in 40 years.
While it has dropped significantly from its peak in the summer of 2022, Peterson noted that inflation likely won't fully retreat to its target level of around 2% until sometime next year.
The Federal Reserve's aggressive interest rate hikes to combat inflation have resulted in increased borrowing costs across the board. From mortgages to auto loans and credit card debt, households are feeling the financial strain.
Peterson recommended allocating extra funds to pay down debt, prioritizing the highest-interest debt first. According to CNBC, financial experts suggest prioritizing the highest-interest debt first and paying bills on time and in full each month.
In an era of economic uncertainty, Peterson underscored the significance of saving, even if disposable income is limited. She highlighted the mantra that "every dollar counts" as she urged consumers to allocate any available funds towards savings.
For those with a 401(k) plan at work, the advice is to prioritize saving enough to secure the full company match, effectively capitalizing on a valuable opportunity for financial growth.
As households navigate potential challenges in the coming year, Peterson's three-point action plan will serve as a proactive strategy to fortify personal finances and weather economic uncertainties. By implementing these tips, consumers can position themselves to not only survive but thrive in the evolving financial landscape of 2024.
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