The past few years have been financially exhausting for many. Things like layoffs, foreclosures, and bankruptcy have become common.
But, as things slowly return to normal, what about finances? Market trends are improving, but continually changing; shedding light on areas to pay attention to. These fluxes matter because they could impact you. For example, influencing investment choices, warning of potential losses, and ultimately, altering long-term financial goals.
Given how impactful trends can be, we’ve decided to list the top four financial trends to look out for this tax year.
1. Prepare for Inflation
It’s no secret that the cost of everyday essentials is on the rise thanks (in part) to inflation. If you were hoping to catch a break on this rise, you will be sadly disappointed as it is predicted to continue its way into 2023.
For investors, this means that any investments made should go into things that will do well despite the hard economic times. For example, things like health care, utilities, energy, and banking have remained stable in past downturns. But, for those not willing to risk anything at all, simply hold off until the risk subsides.
Instead opt for more ‘stable’ investment choices like short-term fixed instruments; high-yield savings accounts, Treasury’s, money market mutual funds, etc.
2. Educate on Crypto
Many investors are starting to get involved in the world of cryptocurrency. Although it’s still a relatively new form of investing, it’s showing no signs of slowing into 2023. Rules too are tricky for investors to understand, and they constantly change which makes it hard to keep up with, and even harder to make a good investment decision.
That’s why we’re suggesting that any investor wanting to get in on the trend in the new year become educated in the subject prior to putting money into it.
3. Consider Experiences Over Savings
We’re seeing an increasing number of clients wanting to allocate more money to the present. This doesn’t mean they’re completely foregoing a savings (or other retirement savings) account. Instead, it looks to encourage people to live in the present and stop being so restrictive with their funds.
Whether this is to travel more, have more spending cash, or the desire to retire early we are seeing more people putting money towards these experiences. This does not mean that people should stop planning for the future. Rather, it means taking current goals and developing a more strategic plan that gives room in the budget to fund it.
4. Reevaluate Retirement
Health and healthcare costs are top of mind for many in this post-pandemic world. People are now realizing that they will need to be prepared for a major shift in their living situations. This has caused many to rethink their original retirement plan.
Oftentimes this looks like a scaled-back version of what they originally thought. Things like holding off on long-term care by living in their home as long as possible, delaying leaving work, possibly picking up a part-time job, and reducing spending to be able to comfortably enjoy their golden years.
Although retirement can be a sensitive topic, those reaching the age of retirement should do some serious thinking as to whether or not they currently like where they are living, how they plan to maintain their physical and mental health as they age, and of course, how much all of this will cost.
Ultimately, we understand that taxes and financial planning can be stressful. But this process can be easier with our help. A.P Accounting & Tax Services believes that smart financial planning is critical to success. So, instead of struggling with your books, see how we can help you this tax season. Contact us today.
Image: Unsplash
