How Confident Are You About Your Financial Situation in 2022?

A new year brings with it the promise of rebirth, of starting afresh. We jettison our old bad habits and take up new ones. Or at least so we hope. But at the very least, the beginning of each new year is a time to take stock of our situation and see where we can improve ourselves.

After the upheaval of 2020, many people had hoped that 2021 would bring with it some return to normalcy. They were bitterly disappointed. And so far 2022 doesn’t look like it’s getting off to that great a start either. But that doesn’t mean we have to despair.

What we all need to do is take stock of ourselves and our individual situations and assess where we can make improvements. We need to determine what’s going right in our lives, what’s going wrong, and make concrete plans for improvement.

That’s just as much the case for our financial well-being as it is for our physical and emotional well-being. And with the economy potentially facing some headwinds this year, your financial well-being could end up playing an increasingly important role in your physical and emotional well-being too.

If you’re not confident about your financial situation this year, you’re not alone. More than a quarter of Americans expect their financial situation to deteriorate this year, while more than 40% expect no real change in their financial well-being. Only about a third of Americans expect things to improve, and here’s why.

Inflation a Major Concern

By far the major concern with most Americans today is inflation. That’s particularly true for older age cohorts such as Baby Boomers and Gen-Xers. But overall about 70% of Americans who expect their financial situation to deteriorate believe that inflation is the most likely reason why.

Inflation has hit 40-year highs, and it could very well continue pushing higher. That will put a lot of pressure on a great many households, perhaps yours included. No one in Washington seems to be taking the threat of inflation seriously, and in fact it seems that many in Washington are trying to downplay or minimize the threat of inflation.

You’ve probably already seen prices at the grocery store inching up gradually over the past few months. A few cents here and there may not seem like much, but it can add up to a significantly higher grocery bill.

You’ve probably also felt the pain at the pump, as gasoline prices are far higher today than they were a year ago. Could they continue to rise even further?

And if you’ve been in the market for a car or a house, you’ve definitely been in for a shock. It seems like more and more people are going to be priced out of car ownership or home ownership because things have gotten so expensive. When will this madness end?

Rising Debt Complicates Matters

One pernicious effect of inflation is that households that were already having difficulty making ends meet are having to go into debt just to continue living their lives. And that increased debt is going to hang over them for quite a while.

That’s not the only area debt is piling up either, as both corporations and governments continue to issue massive amounts of debt, taking advantage of ultra-low interest rates as long as they’ll last. But this massive pile of debt that is saturating the economy is a ticking time bomb. Once interest rates rise again in the future, many of these debt instruments could default, as their issuers won’t be able to roll them over as they’ve been used to doing.

The economy is sitting on a massive pile of tens of trillions of dollars worth of debt, with everyone hoping that the game of musical chairs that is going on continues for a long time. But if the music stops suddenly, those holding that debt, such as investors holding US Treasury debt or high-yielding corporate bonds, could end up suffering financially.

Are Your Savings and Investments Safe?

As if these weren’t bad enough, it seems like there are constantly new ways the government is trying to get at your money. Retirement accounts have recently attracted the government’s attention, and while the focus is supposedly only on the ultra-rich, it could only be a matter of time before many investors’ retirement accounts are in the government’s crosshairs.

After all, tax rules have changed this year so that money you receive through services such as PayPal, Zelle, and Venmo are now reported to the IRS, with the threshold set at the low bar of only $600. That’s hardly a policy designed to soak the rich, and makes it clear that Congress and the Biden administration are digging deeper than ever to try to bring in as much government revenue as possible. Will your savings and investments be targeted next?

Protecting Your Savings Is Paramount

It’s probably more important than ever that you protect your investments, and part of doing that is having a plan for how to protect them. For many investors, that includes looking to alternative assets such as precious metals.

Precious metals such as gold and silver have long played a role in many investors’ financial portfolios. They often gain value during times of economic turmoil, act as hedges against inflation, and provide the reassurance of a tangible, physical asset that won’t just disappear into thin air.

With inflation threatening not only the value of cash holdings but also even of retirement savings invested in stocks and bonds, the potential for gold and silver to gain value could provide some people with the necessary ability to protect themselves against that inflation. After all, gold and silver’s annualized gains throughout the inflationary 1970s were over 30%. A repeat of that type of performance in the 2020s would make precious metals investors very happy.

While those numbers may seem unreal today, a year ago no one was expecting 6.8% annual inflation rates. Yet here we are, confronted by the reality of rising inflation, and we have no choice but to react to it. Failing to protect your assets against inflation means losing money each year as the purchasing power of your dollars declines. So what will you do?

If you want to join the many thousands of people who have benefited from gold and silver over the years, contact Goldco today to learn more about how gold and silver can help you. Goldco’s precious metals experts have years of experience helping thousands of customers just like you benefit from precious metals, and can answer any questions you may have.

Don’t let your hard-earned savings and investments fall victim to rising inflation. Call Goldco today and start safeguarding your savings.