2024 Finance Triple Threat: How Inflation, Interest Rates, & Student Loans Hold You Back

One of these is trouble enough, but all three together can derail your financial goals. Find out how to navigate these challenges below

Learning the effects of inflation on borrowers and mortgage holders

Inflation, interest rates, and student loans. Individually, they can each put their fair share of financial pressure on you. But together, their combined impact can create a perfect storm that not only holds you back, but also affects your quality of life. Of course, this is totally natural. With so many businesses out there, some are bound to look or sound alike, especially if they’re in the same field.

In 2024, various economic factors have made this financial triple threat even more dangerous, and in the article below, we’ll dive into each one before exploring their collective effect.

Inflation

Inflation is like a hole in your financial boat, gradually weakening the value of your money over time. As inflation increases, your purchasing power decreases, making it harder to stay afloat and maintain your standard of living.

Luckily, the US inflation rate has dropped from its peak of 9.1% in 2022. However, we’re still sitting at 3.5% as of March 2024, and you may have noticed how the prices at the grocery store or the pump haven’t budged despite the drop in inflation. In many cases, they’ve continued to rise.

What used to be a two-hundred-dollar grocery run is now three hundred or more. Rent has skyrocketed with no signs of slowing down. And essential services like healthcare are only getting more expensive.

At the end of the day, this leaves you with less money to save, invest, or spend on life’s little pleasures, like family trips or dining out. No other segment of the population feels this effect more than low-income households, who can be pushed to the brink by spikes in inflation.

Interest Rates

Interest rates play a massive role in our economy, affecting everything from mortgages to credit cards and more. When rates rise, borrowing money becomes more expensive, making it easier to rack up large amounts of debt.

If you’re already in debt, say due to student loans, this can make the financial mountain seem even more insurmountable. For example, rising interest rates directly affect variable-rate student loans. Hikes can lead to higher monthly payments, adding more weight to your financial burden.

Of course, higher interest rates also discourage would-be borrowers from taking out loans for things like owning a home, going to school, or opening businesses—all major life goals for many Americans.

And these days, interest rates are higher than they’ve been in decades. Since 2022, mortgage rates climbed from lower than 3% during the covid pandemic all the way up to over 7% near the end of 2023. Currently, they’re sitting just below 7%, and experts predict mortgage rates will drop closer to 6% or even lower by the end of the year, but only time will tell.

Student Loans

Inflation and interest rates aren’t the only things that have shot up in recent years. The rising cost of education has led to a massive surge in student loan debt.

And now that the government-mandated moratorium on payments has ended, many Americans are once again faced with the financial pressure of monthly payments.

If you’re currently paying off student loan debt, you don’t need us to tell you how long it can linger over you like a financial storm cloud. For many, it severely disrupts their long-term goals.

Unlike mortgages and car loans, student loans are infamous for their wildly unfavorable terms and characteristically high-interest rates. With repayment periods often lasting well into adulthood, these loans cripple many borrowers’ chances of saving to buy a home, start a family or business, or retire.

The Financial Triple Threat

As we’ve seen, inflation is still fairly high, driving up the cost of living.

Although they’ve dropped slightly compared to last year, interest rates are still quite high, causing friction for borrowers and raising monthly payments for those with variable-rate student loans.

And as of September last year, lenders have resumed collecting monthly student loan payments.

These three factors together—especially when combined with stagnant wages—can put you in a financial vice grip, leaving you to grapple with ever-increasing expenses with no additional income to provide relief.

As a result, you may have to put your financial future on hold or, in the worst-case scenario, change your plans entirely.

How to Endure

The financial triple threat may create what looks like a David vs. Goliath situation, but with the right strategies and a proactive approach, you can help mitigate the impact, build yourself a financial safety net, and even pay down your debts.

Create a comprehensive, long-term financial plan

This step may seem pointless if you’re already in the throes of the financial triple threat, but it’s never too late to plan for your financial future.

Set aside some time to write down your short and long-term goals. Account for the essentials and your current financial situation, and build out as clear a roadmap as possible to guide you to milestones like owning a home, saving for retirement, etc. You could also enlist the help of a professional and meet with a financial advisor to create your plan.

Be meticulous about budgeting & expenses

If you don’t know your cash flow like the back of your hand, getting out of debt will be an even bigger challenge—especially if you’re juggling multiple debts.

With the financial triple threat bearing down on you, a measured, thorough approach to monitoring your spending habits can help you keep excess spending in check and withstand periods of high inflation.

Invest in a debt elimination system

If you’re dealing with the nagging stress and anxiety that comes with financial strain, debt elimination software that does all the budgeting and debt pay-off analysis for you can be a huge source of relief. In some cases, it can even help you avoid refinancing.

For example, United Financial Freedom’s award-winning Money Max Account is a proven system that can help you pay off all your debts—including your mortgage, student loans, credit card debt, and more—in as little as seven to ten years. Without refinancing, modifying your loan, or drastically changing how you spend your money.

In that time, you can save tens, even hundreds of thousands of dollars in interest payments and use that money to realize your financial dreams, like going on family vacations, investing, securing your kids’ college funds, and more.

It may sound hard to believe, but the results speak for themselves:

The Money Max Account has helped over 70,000 people eliminate 2.6 billion dollars in debt and counting.

If you’d like to find out how it works and read customer success stories, visit the Money Max Account to learn more. Or, you can fill out the form below to contact one of our debt elimination experts directly and discover how much time and money the Money Max Account can save you.

With the Money Max Account, your debt-free future is a lot closer than you think!

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Kevin Foster Independent Agent Phone: 405-210-4379 Email: kevin@trwfinancial.com
Kevin Foster
Independent Agent