ICYMI #5 → The Fed Raises Interest Rates Again; Gen Z Uses BNPL for Holiday Shopping; and New Findings on Workplace Well-Being

Welcome back for another edition of ICYMI: A weekly-ish roundup of finance-related news that matters for you and your money.

⬆️ The Fed raises interest rates for the fourth time in a row

The Fed had a 2-day meeting this week which resulted in the highly anticipated announcement of a 0.75 percent rate hike. This is the fourth consecutive increase from the Fed this year, and the highest rate since early 2008. 

Pro tip: We don’t mean to sound like a broken record, but if you’re dealing with overwhelmingly expensive credit card interest rates – now is a great time to rethink your strategy for paying down your high-interest credit card debt. The increase in rates driven by the Fed will likely make your credit card debt more costly.

🎁 Holiday shopping: Excited or stressed?

A recent study by McKinsey & Company notes that, “after nearly three years of suppressed behavior resulting from the COVID-19 pandemic, people are primed to go all out to celebrate for the holidays. In the survey, 55 percent of US respondents say they are excited about holiday shopping, and most people have the savings to spend.” But that only represents a little over half of the people represented in that study. A lot of folks are struggling to make ends meet in this hyper-inflation era we’re currently experiencing. 

Pro tip: If upcoming holiday shopping expenses are stressing you out, we have three tips for you. 

1. Plan ahead now. Don’t wait until the last minute to refine your list of must buy items. Start your sinking fund now, so you can be ahead of the game. A little put aside each paycheck can make a big difference come December. 
2. Look for deals. Many retailers are hurting too, and they’ll be looking to dump merchandise quickly with sales and deep discounts. 
3. Choose experiences over physical gifts. We’ll have more on this in our upcoming 2022 Happy Money Giving Guide, but experiences provide a bigger happiness boost than tangible gifts. Plus, this can be a way to DIY a gift or create a memorable moment that won’t bust the bank.

💸 Gen Z is turning to buy now, pay later for holiday shopping

While some folks may have cushion in their budget to splurge this holiday season, others are looking for cash in other places. A survey by Bluedot found that 48% of Gen Z respondents said they planned to use buy now, pay later (also known as BNPL) services this holiday season. Millennials were close behind at 47%, Gen X at 40%, and baby boomers coming in at a much lower rate of 14%. Of the folks that are looking to use BNPL, they said it’s due to a lack of cash. 

Pro tip: Shop wisely. BNPL can be very tempting at the moment of purchase because it gives you a chance to delay payment. But be sure to read all the fine print. A few basic things to understand are: 1) how much the item will cost you in total, 2) when payments are due, 3) when any introductory promo rates expire, and 4) what happens if you return an item that you purchased using a BNPL service.

👩‍💻 How the intersection of work, money, and mental health are impacting US workers

The U.S. Surgeon General recently published a study along with new priorities for Workplace Well-Being. Your job often has a direct impact on the relationship you have with your money. Here are some stats that stood out:

• 81% of workers reported that they will be looking for workplaces that support mental health in the future.
• 71% of employees said they are worried that their compensation has not kept up with inflation. 
• 24% reported that they do not feel they receive adequate compensation.

Pro tip: As we all navigate a very bumpy economy, be sure to put guardrails in place to protect your mental and financial well-being. From understanding what financial stress is to finding ways to destress to putting together a budget to plan ahead, a little time invested into your wellness goals can have big impacts over the long run. 

Data featured as of November 2, 2022