Interest rates, as the tv hucksters constantly remind us, are near historic lows. So now is an excellent time to refinance your mortgage–maybe take out some equity to upgrade the bathrooms, take a little vacation, or purchase a home entertainment center.
Or maybe it’s time to buy a new vehicle–perhaps a premium class crew-cab pickup, an Audi, or a BMW. At today’s interest rates, the monthly car note won’t be that high–especially if you finance your new set of wheels over six, seven, eight, or even nine years!
How about those student loans? You don’t make enough money to pay off your college debt under a standard 10-year repayment plan because you have other bills to pay. But that’s no problem. You can sign up for an income-based repayment plan that will stretch out your monthly payments over 25 years.
Twenty-five years is a long time, but maybe the federal government will forgive all that student debt–including yours. After all, what’s $2 trillion among friends?
So is everybody happy with their new homes, fancy cars, and impressive college credentials? If so, enjoy the feeling because it won’t last much longer.
Inflation is on the move, and who believes it is transitory as our Treasury Secretary tries to reassure us. Wages will probably rise to cover inflation for some employees but not for others. And if you a retired person on a fixed income, inflation will soon erode your standard of living.
That vacation cruise to Greece that you’ve always dreamed of? Maybe you’ll just go to Oklahoma’s Boiling Springs State Park this year–a lot cheaper.
Of course, you can’t fly to Boiling Spings because airfares are way up, and car rental rates are just short of obscene. So you will have to drive. But you should do it soon because gas prices are on the rise. Oil is already back up to $75 a barrel.
So maybe you’ll skip a vacation this year and enjoy your backyard–grill a few steaks or hamburgers. But that’s becoming more expensive too. A premium steak at the grocery store can cost you $25 a pound. But hot dogs are cheaper–especially the ones that aren’t all beef.
There’s nothing the people living in flyover country or modest urban neighborhoods can do about the scary shifts in the national economy. We will have to tighten our belts, pay off our debts, and cut back on our lifestyles.
It won’t be fun, but we will probably all be OK if we don’t do something stupid like refinance our home over 40 years, buy a car on a 9-year note, or borrow $100,000 to go to college. But most of us are too smart to do something reckless like that. Right?
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