We have stepped into a new year. And, we have our new president. So, will 2017 mean something different for our personal finances?
Let’s find it out!
A Price of gas
Gas prices will be low in 2017 though it won’t be as low as 2016. According to Tom Kloza, the global head of energy analysis at the Oil Price Information Service, gas price was cheapest in 2016 since 2004. The average gas price was $2.265 a gallon.
According to Tom Kloza, gas prices will range between $2.10 - $2.75 a gallon in 2017. However, there might be regional and seasonal fluctuations.
It has been found that a person drives 15,000 miles a year on an average. So, on an average, a person driving a normal passenger vehicle is supposed to pay about $120 more on gas this year as compared to 2016.
B Rate of interest on loans
From last year itself, it was a speculation that the Federal Reserve would raise the interest rates in 2017. It is likely that the rate of interest will first increase on home equity loans, credit cards, and adjustable-rate mortgages. So, it is better if you go for fixed-rate loans.
However, you need not worry much about the interest rate hike. This rate increase won’t affect your auto loans much. And, mortgage rates will still be low; so, you should be able to take out suitable mortgage loans if your credit score is good.
C Job market scenario
Jon market is supposed to get better in 2017. Experts are of the view that there will be job opportunities across all pay scales this year. So, if you’re looking for a new job or a job change, then this can be the right time to do it.
You can also expect pay hikes in the coming months. However, automation is on the rise. So, your job role may change.
There is a great news! Andrew Chamberlain, the chief economist at Glassdoor, has said that there will be pay transparency and actions will be taken to level gender pay gap.
D Paying taxes
Trump’s presidency wants to reduce the number of tax brackets from 7 to 3. Trump wants to simplify the tax system and reduce the tax burden of people, especially the middle class.
According to David Prokupek, the CEO of Jackson Hewitt, an average family may expect 3% - 5% reduction in tax bill. So, you might expect this while filing your taxes in 2018. This year, you can expect to pay your taxes as per the existing law.
Here’s some tips to do so:
1 Automate your savings
It is always not possible to set aside a certain percent of your paycheck every month. But, you can do so if you automate your savings. The banks also often offer free services to transfer a fixed amount to your savings account every month.
This way, you can also start depositing a certain portion of your paycheck to your emergency savings account. It can take care of your rainy days.
2 Choose a suitable savings account
The interest and fees may not be the same for all savings accounts. Also, the minimum balance you need to keep may not be the same. So, do your part of research while selecting a suitable savings account.
Make sure you check out online banks too; they may offer higher interest rates.
3 Open a flexible spending account
If your employer is offering you a FSA (Flexible Spending Account or Flexible Spending Arrangement), as a part of your benefits package, then sign up for it. It can help you save dollars on your health care cost (including deductibles and copays), which are not covered by your insurance policy.
After you sign up, you have to select how much you want to contribute in a year. You get discount when you withdraw from this account for the eligible medical expenses, and you don’t have to pay any tax on it. However, you have to use all funds within the designated benefits year.
4 Plan a budget and monitor your expenses
Budget - Without which no financial planning is possible. Not only planning your budget, but also you’ll have to monitor your expenses carefully.
Even if you haven't planned any budget till date, formulate one this year.
You may have to go through the trial-and-error process for 2-3 months, but you’ll realize how it’s helping you to improve your financial condition.
And, another important thing - try to save more than what you did in the last year. There’s no alternative to planning a suitable budget and saving; your personal financial situation is bound to improve!