Even with lower inflation rates, financial experts warn against overspending this holiday season

BIRMINGHAM, Ala. (WBRC) – While latest inflation numbers show a decrease, financial experts are still warning against overspending this holiday season.

The Federal Reserve raised interest rates by a half point Wednesday. Financial experts said the next big question is how much will they raise rates next year and for how long.

The Welch Group’s Marshall Clay said there is a disconnect in the market, because experts are assuming short term rates will be decreasing on the back end of 2023. But, Clay said the Feds are wanting those short term rates to stay higher for longer. While you may have a little more money in your pocket with the price of gas and goods going down, Clay said since there is uncertainty coming in the new year, now is not the time to overspend.

“I think the big uncertainty as we get into 2023 is what happens with these interest rate increases,” Clay said. “Does it start really causing the consumer to pull back, do companies start laying off workers in order to offset the negative effects of inflation or in anticipation of the economy deteriorating further. Now is time to really look at your finances. Make sure if you have too much debt on your credit cards and pay those down. Don’t spend too much money this holiday season and really try and get a handle on your financial situation, because the economic situation is likely to get a little bit worse in 2023.″

Clay said if you have any variable rate debt, you want to be paying those down, because…