Quantcast
Published On: Thu, Sep 8th, 2022

What are the expected changes in the global economy and what does it mean for your personal finances?

One of the biggest benefits of the prosperity of the digital age is emerging. With relevant information accessible at our fingertips, it’s increasingly easy to make decisions that support our priorities and aspirations. 

This can apply to many challenges in personal finance – such as risk management, responsive budgeting, planning out payout dates for investments, structural changes to how we use our bank accounts, and even how we build capital, to begin with.

photo/ Gerd Altmann via pixabay

What are the variables affecting global inflation and why does it matter? 

There are several factors that influence global inflation. These include economic growth, monetary policy, and commodity prices.

The global economy is on an upswing, and that’s good news for your wallet. Between 2007 and 2022, the world’s economies grew by an average of 3.9%. That means more money in your pocket! Increased economic activity has also led to rising prices for goods and services, which is called inflation. Inflation refers to a sustained rise in prices over a period of time, typically measured as a percentage increase over the previous period. On average, consumer prices have increased by 5% since 2007.

Inflation affects everybody differently based on their spending habits and financial needs. For some people, inflation means they can afford to buy more goods and services without having to worry about their budget bursting. For others, inflation can quickly erode their savings and lead to a loss of value in their investments. In any case, it’s important to be aware of the different factors that affect global inflation so you can make smart financial decisions.

One of the most important factors influencing global inflation is economic growth. Higher GDP means more money flowing into commercial banks and into our economy as a whole – this is good news for consumers as a larger economy typically has fewer restrictions and allows for cheaper borrowing costs. 

Looking at the past economic trends of the US stock market and commodities

Crude oil prices are on the rise, gold and silver prices are slowly recovering from their dips, and global markets are opening at a more optimistic pace. Markets have been fluctuating for quite some time now, but there is a general consensus that we will see an expansion in the next few years even though some financial bodies predict a short-term setback. 

Some of the potential changes in the global economy could mean an increase in your personal income. For instance, if wage growth picks up then you may see an uptick in your take-home pay. Additionally, if asset prices (like stocks or real estate) continue to go up then your lifetime wealth could be increased as well. 

However, it’s important to remember that this is just an estimate and nothing is guaranteed. There could also be global economic turmoil which would have a negative impact not just on your personal finances but also on the world economy as a whole. 

So while it’s important to stay invested and have positive outlooks on future market movements, don’t forget to account for unforeseen risks along the way!   

When the economy grows it comes with a slew of problems down the line

The global economy is growing and evolving, with certain parts of the world doing better than others. However, that doesn’t mean your personal finances are exempt from change.

 

Changes in the global economy can be unpredictable and often they’re difficult to predict. This means that it’s important to be prepared for whatever happens.

One of the most common changes related to the global economy is inflation. This can affect your wallet in a number of ways. For example, it can make it harder to save money because inflated prices make basic items more expensive.

Another consequence of inflation is that it can make it harder to get fixed-income investments such as bonds or mortgages fixed at a fair price. When inflation rises over time, the value of these investments decreases. This can cause a lot of financial pain for people who rely on them for their retirement or other long-term financial plans.

The emergence of cryptocurrencies has shown the world a new investment vehicle

Cryptocurrencies have captured the attention of many investors because of the returns they have generated. 

“Cryptocurrencies have emerged as a new investment vehicle and there are expectations that their value will continue to increase due to a massive influx of new capital driven by retail demand through the launch of several new cryptocurrency exchanges” 

This is because cryptocurrencies are not subject to the whims of politics, economies, or central bankers. However, there are some risks associated with investing in cryptocurrencies and it is important to be aware of these before making an investment. 

Bitcoin has been the biggest and best-known cryptocurrency, but there are others such as Ethereum and Litecoin. The main advantage of cryptocurrencies is that they are not subject to government or central bank control like traditional currencies. This means that they can be used for transactions without interference. In addition, because they are not subject to any national regulations, cryptocurrencies can be used nearly anywhere in the world. 

 

Despite these advantages, there are also some risks associated with investing in cryptocurrencies. One of the most significant risks is that there is no guarantee that the value of a cryptocurrency will continue to increase. 

Additionally, since cryptocurrencies are not regulated, they may be used for illegal activities such as money laundering or financing terrorism. It is also important to be aware of the fact that cryptocurrencies are not FDIC-insured.

Discussion of how an economic downturn affects our personal finances

There have been many articles discussing the potential global economic downturn and what it could mean for our personal finances. Overall, the trends seem to be that the global economy is contracting, meaning there is going to be a decrease in overall spending. This could lead to decreases in your income and assets, as well as possible job loss and reduced access to credit. Here are a few things you should keep in mind if you’re concerned about your personal finances during an economic downturn: 

-Make sure you have an emergency fund ready – This can cover unexpected costs like car repairs or a new roof. 

-Practice financial planning – Make sure you know how to save and budget for your needs, both short-term (like reducing your monthly expenses) and long-term (planning for retirement). 

-Be aware of warning signs – If you’re feeling particularly anxious about your financial future, start tracking things like your spending habits, credit score, unemployment rates, stock prices, etc. so that you can get an idea of whether there are any trends that stand out to you.

Author: Anton Palovaara

On the DISPATCH: Headlines  Local  Opinion

Subscribe to Weekly Newsletter

* indicates required
/ ( mm / dd ) [ALL INFO CONFIDENTIAL]

About the Author

- Outside contributors to the Dispatch are always welcome to offer their unique voices, contradictory opinions or presentation of information not included on the site.

Tags

Sign up for our Weekly Newsletter



Recent Posts

The Perfect Boracay Vacation: What To Look For In Your Stay

September 21, 2022, Comments Off on The Perfect Boracay Vacation: What To Look For In Your Stay

Five Tips For Experiencing Iceland On A Budget

September 16, 2022, Comments Off on Five Tips For Experiencing Iceland On A Budget

Learn How to Treat These Common Skin Concerns

September 16, 2022, Comments Off on Learn How to Treat These Common Skin Concerns

What’s The Process To Become A U.S. Citizen?

September 16, 2022, Comments Off on What’s The Process To Become A U.S. Citizen?

The Trucking Industry is Ready for a Comeback

September 16, 2022, Comments Off on The Trucking Industry is Ready for a Comeback

5 Reasons Why You Need Multiple Bank Accounts

September 14, 2022, Comments Off on 5 Reasons Why You Need Multiple Bank Accounts

The 3 best areas to target when using business consultants

September 14, 2022, Comments Off on The 3 best areas to target when using business consultants

Plant-Derived Recombinant Proteins

September 14, 2022, Comments Off on Plant-Derived Recombinant Proteins

Categories

Archives

At the Movies

Pin It