All of us have been affected by the last few years with the economy trending downwards. Whether you have seen your income reduced, your rent go up, your grocery prices rising, it is hitting each and every one of us. Now, there is an end in sight, however, it is not in the immediate future. Below is a 2023 financial forecast summary and some tips on what to do.
2023 Financial Forecast
We are starting to see unemployment rates fall, which is good. Due to interest rate hikes by the federal government, slow global economic growth, and global political instability, the Federal government is only expecting our GDP growth to finish 2022 at 0.2%. While inflation has been cooling, it is still rising in some areas. Gas prices have fallen recently, but food and housing prices are still rising, driving up the inflation rate. Barclays economists have cut their projections for global economic growth in 2023, as inflation does not seem to be slowing down anytime in the near future. They also say that advanced economies are likely headed into a recession, and 2023 is set to be one of the weakest years in 40 years.
What Should We Be Doing?
Due to inflation and these financial forecasts, we should all examine our financial situation and make sure we have a plan to combat rising prices. First off, sit down and take a hard look at your spending over the past several months. Make a budget with monthly averages of purchases, and you will find areas that you can categorize as unnecessary spending. For the next several months, if you feel like things are very tight, then it is time to cut back on that spending.
Here is a checklist of things to do:
- Save up an emergency fund
- Pay down your debts
- Stay calm, but informed
- Keep investing and saving for your retirement
- See if there are opportunities to add income
- Check LinkedIn and local listings for part time work in your field
- Make sure your budget is up to date
- Schedule a Financial Health Plan appointment with one of our experts to help whip your finances into shape in 2023.
While housing, energy, and food costs rise, we need to cut back in other areas where possible. This might mean less entertainment spending, and less dining out. With the housing market being volatile, and interest rates rising, it might not be the best time to purchase a home either. We need to be ready for things to get a little worse, before things turn around – which they are expected to in 2024.