American Borrowers Need Careful Planning Especially During Difficult Times
Right now, everyone in the United States has one thing in common: we are all dealing with escalating living costs. The cost of food is growing, prices at fuel pumps are rising. The American people are feeling the heat of soaring energy bills and bigger mortgage payments. Watching inflation climbs towards double digits and interest rates soar out the park.
We all have that in common. But the degree to which our bank balances are dented, and our day-to-day lives are affected varies greatly. The impact that COVID19, placed on the American people financially moving out of the pandemic in wildly different. Bolstered Balance Sheets reports that American households accumulated $2.5 trillion in excess savings (inflation-adjusted to 2020 dollars) between March 2020 and January 2022, much of which appears to have been deposited in checking and savings accounts; as we couldn’t commute, eat out, go on vacation or shop, saving money was by no means a broad experience.
Many Americans have suffered economic hardship since the first lock-down. Everyone who lost their job did not qualify for furlough pay or a government loan, for example. Many self-employed people simply had no income for extended periods of time. The American divorce rate rose during the pandemic, causing not only split incomes but divided homes. Which usually results in added financial strain. Some of those who did qualify for loans or forbearance with mortgage payments have struggled to catch up. Add to that toxic concoction a high rate of inflation, and you have a whole lot of suffering going on.
American people need to start getting their finances in order now, rather than later. Fortunately, many American homeowners are savvy enough to be doing this right now. I image there are a huge number of people steadily contacting their financial institutions. Discuss options that are available to help eliminate debt. Especially them when it comes to your biggest monthly expense, your mortgage.
Deciding if they should refinance their mortgage before rates increase, consolidate other unsecured debt; or should they sell and pay off debt using the last few years of equity growth. Either would help with the increased current cost of living and mitigate against future financial pressure.