PORTLAND, Ore., July 20, 2021 – The U.S. Bureau of Labor Statistics (BLS) reported in June that prices increased by 5% between May 2020 and May 2021, the largest increase since September 2008. Economists have taken notice, and are warning inflation could be on the horizon. Meanwhile, Treasury Secretary Janet Yellen has signaled a willingness to increase interest rates to support the economy. To help the community prepare for the impacts of inflation and the possibility of increased interest rates, OnPoint Community Credit Union today offered guidance to help people in Oregon and Southwest Washington keep their finances on track.
“Increasing costs and interest rates have created a lot of uncertainty in our community, but the good news is there are steps you can take to prepare yourself financially,” said Tory McVay, Senior Vice President/Chief Retail Officer, OnPoint Community Credit Union. “OnPoint sees firsthand the impact that national economic issues like inflation have on family budgets. Even a fraction of a percentage point can increase monthly payments on an auto or home loan by hundreds of dollars. However, there are ways to keep from getting caught offguard by these shifts.”
Below are four proactive steps OnPoint recommends to prepare for the potential impacts of inflation and rising interest rates:
1. Stay up-to-date on the latest shifts in consumer prices by following the Bureau of Labor Statistics (BLS) on Twitter, and follow current interest rates on the U.S. Department of the Treasury’s website. By staying informed, you can be prepared to adjust their budget when prices hit a certain threshold.
2. Update your monthly budget to account for a continued increase in prices and possibly higher interest rates. Start by calculating your monthly income and subtracting your expenses. Be sure to add the percentage that prices have increased in the last year, as reported by the BLS. For example, you would add 5% to all expenses if you started today. The Federal Trade Commission (FTC) offers a helpful worksheet to help you determine how much you make and spend each month. If you’re like most people, you’ll need to make adjustments. Consider spending less on gifts, limiting the number of days you eat out, cutting back on subscriptions, adjusting your cell phone plan or exploring less expensive housing.
3. Take advantage of today’s low interest rates before possible increases. Begin with listing your debts, starting with the highest interest rate. Then, contact each creditor to proactively explore options to refinance your debt into a lower fixed rate or transfer your balance to a lower-rate credit card and try to pay it off before the promotional rate expires. If refinancing or balance transfers are not an option, prioritize paying down larger balance accounts first. For more information, check out the FTC’s website, which provides practical information and resources to help you get out of debt.
4. If you are a homeowner, your home value has likely increased in the last few years. If your budget needs more cushion to prepare for inflation, look into a fixed home equity line of credit (HELOC) as a more efficient way of paying off high-interest debt or a cash-out refinance to lock in a low rate with a manageable monthly payment. Check with your financial institution to see if it offers a home equity calculator, which can provide you with an idea of the cashback and loan options available to you.
From budgeting worksheets and home loan calculators to Enrich, a personalized and interactive financial education platform, OnPoint offers many tools and resources free of charge to help individuals achieve financial wellness amid uncertainty. In addition, OnPoint will soon operate 55 branches across Oregon and Southwest Washington and encourages community members to visit their local branch to discuss how shifts in the economy may impact their budget and how best to prepare.
ABOUT ONPOINT COMMUNITY CREDIT UNION
OnPoint Community Credit Union is the largest credit union in Oregon, serving over 440,000 members and with assets of $8.4 billion. Founded in 1932, OnPoint Community Credit Union’s membership is available to anyone who lives or works in one of 28 Oregon counties (Benton, Clackamas, Clatsop, Columbia, Coos, Crook, Curry, Deschutes, Douglas, Gilliam, Hood River, Jackson, Jefferson, Josephine, Klamath, Lane, Lincoln, Linn, Marion, Morrow, Multnomah, Polk, Sherman, Tillamook, Wasco, Washington, Wheeler and Yamhill) and two Washington counties (Skamania and Clark) and their immediate family members. More information is available at www.onpointcu.com or 503-228-7077 or 800-527-3932.