💸 Fed Cuts Interest Rates in 4 Years: What It Means For You

Hey, Wicked Club fam!

Happy Friday!! Did anyone else feel like summer hit the fast-forward button this year? Rude, I know 🙄 If your Instagram feed wasn't exactly bursting with beach pics and festival shenanigans, don't worry – you're in good company! While I might not have racked up those frequent flyer miles, my bank account is probably thanking me. And let's be real, I’ve been enjoying my work. So, maybe being a homebody this summer wasn't such a bad gig after all?

But enough about the season that ghosted us –I’ve got a bunch of exciting topics lined up for you this week, so let’s dive right in!

🗒️ This week’s rundown:

• 💸 Fed Cuts Interest Rates in 4 Years: What It Means For You

• 🎤 "I See It, I Like It, But Do I Really Need It?" – How to Get Smart with Your Spending

💸 Fed Cuts Interest Rates in 4 Years: What It Means For You

Okay, so if you’ve been keeping up with the news lately, you might have heard about the recent interest rate cut and all the chatter and memes surrounding Papa Powell. The Federal Reserve has recently announced its first interest rate cut in over four years, marking a significant shift in monetary policy. If you’re wondering what this means for you and your finances, you’re in the right place!

🤔 So, What's the Deal with These Interest Rate Cuts?

For the last couple of years, the Fed has been hiking up interest rates to battle inflation, which peaked at a wild 9.1% in June 2022—seriously, that’s a 40-year high! (Thanks a lot, money printer go brrr! 🖨️💸) Inflation at that level was comparable to the late '70s and early ‘80s, when the Fed under Paul Volcker hiked rates to 20% and triggered a recession.

But now, inflation has cooled down to around 2.5%, which is much closer to the Fed's goal of 2%. With things looking more stable, they decided it was time to lower interest rates, especially the federal funds rate. This rate affects how much it costs for banks to borrow money from each other, and ultimately, it impacts what you pay when borrowing as a consumer.

🚀 What This Means for Your Stocks and Crypto

• Stocks: Historically, when the Fed cuts rates, stocks tend to pop off. According to Schwab, in the 12 months following a rate cut, the S&P 500 has shown positive returns in 86% of cases. For instance: After the 2019 rate cut, stocks rose over 15% in the following months. Following the emergency rate cut in 2020, the stock market surged by over 60%, reaching an all-time high.

• Bitcoin: Last time rates got slashed to near-zero in 2020, Bitcoin went from chilling at $7k to a wild $60k by April 2021. Lower rates usually mean more money sloshing around, which can be good news for crypto and long-term buyers and holders. But remember, Bitcoin's gonna Bitcoin – it's always a bit unpredictable.

🏦 Borrowing and Saving- What’s In It For You?

Here’s the good news: if you’ve got your eye on a new car, a house, or maybe even starting that dream business, borrowing just got cheaper. With interest rates going down, you could snag lower rates on loans for all of the above. But if you’ve been enjoying some nice interest on your savings account? Yeah, that’s probably about to take a nosedive. High-yield savings accounts were offering around 5.25% just last month, but as the Fed cuts rates, banks are trimming them, too. Back in 2019, savings rates dropped from 2.2% to 1% in, like, three months. So if you’re thinking about stashing cash, maybe lock in a longer-term CD now before rates drop lower.

For you borrowers out there, the skies are clearing up! Mortgage rates, which went as high as 8% last year, should start to drop. Right now, the average 30-year fixed mortgage rate is sitting at 6.2%, but we might see it dip by 0.25% to 0.5% soon if the Fed keeps slashing rates. In 2019, mortgage rates dropped by 0.75%, so if you’re dealing with high rates, refinancing could be in your future.

The same goes for auto loans, student loans, and even credit cards. Credit card rates are directly tied to the Fed’s moves. In 2019, they dropped from 17% to around 14% after some rate cuts. So if you’re paying high-interest debt on a credit card, you should feel some ease. And just a reminder if you’re paying high interest rates, you can buy yourself some more time by balance transferring to a 0% APR card. But regardless just remember: if there’s one rule in credit card life, it’s never carry a balance—trust me, your future self will thank you.

💭 Final Thoughts

The Fed’s decision to cut interest rates could open up new doors for young adults like you and me —whether it’s borrowing money at lower rates or investing in the stock market. Just remember to stay informed and think strategically about your financial choices. So go ahead and take advantage of these changes! Whether you're looking to invest wisely or secure a better loan deal, being proactive can help you make the most of this new economic landscape. Happy financial planning!

🎤 "I See It, I Like It, But Do I Really Need It?" – How to Get Smart with Your Spending

At Wicked Club, we’re all about being credit card pros—whether that means cashing in on rewards, building your credit score, or just staying on top of your finances. But here’s the thing: none of that matters if you don’t manage your spending right. Let’s face it, good personal finance is the foundation of healthy credit. Without that, you’re headed straight for credit card debt, swimming in interest, and stuck in a financial mess. We live in a world where buying things is as easy as one click. And trust me, it’s way too easy to fall into the trap of swiping that card and feeding into the “I want it, I got it” lifestyle. So, how do we get better at controlling our spending? Let’s talk about it.

First off, guilty as charged—I’m totally in this boat. Amazon is my partner in crime. I love how easy it is to shop, but also hate it because it’s too easy. I’d find myself doomscrolling, adding random stuff to my cart out of boredom, and before I knew it, my bank account would take the hit. Sound familiar? I made a conscious effort to slow down my Amazon habits once I realized how bad it was. And today, I’m sharing some steps that helped me—and will help you—get that spending under control.

🧘‍♀️ Step 1: Wait It Out (Trust Me)

Don’t hit “Buy Now” just because it’s there. Let those items chill in your cart for a minute, and come back later to see if you still really want them. Honestly, this one trick has saved me so much money. Our brains love to justify impulse buys. “But it’s on sale!” or “It’s trending right now!” or “It’s gonna go out of stock tomorrow” or “I deserve it!” Slow those thoughts down. You don’t need to make the purchase right away—give it some breathing room, and you might realize you don’t want it at all.

❓️ Step 2: Ask Yourself the 4 Magic Questions

I watched this Netflix doc called “Get Smart with Money”, and Tiffany Aliche, a money expert, dropped some serious wisdom. Before buying anything, ask yourself these four questions:

1. Do I need it? (Like, really need it?)

2. Do I love it? (Not just like, but L-O-V-E it?)

3. Do I like it? (Or am I just bored?)

4. Do I want it? (Or is it FOMO talking?)

Let’s break it down: Needs are the essentials—you gotta have these for health and safety. Loves are those things that give you long-term joy (like traveling or hobbies). Likes are cool but more short-term—think six months of happiness max. And Wants? Yeah, those are the quick dopamine hits that fade faster than a TikTok trend. The key? Focus more on your needs and loves. Ariana Grande might sing, “I like it, I want it, I got it,” but reality check, you’re not Ariana Grande (yet). Unless you've got a black card as your biz card, you can't just buy everything you see. But guess what? You're cooler than Ariana because by being more mindful you're on your way to building real wealth.

Step 3: Face Your Spending

This might be tough, but it’s time to face the numbers. Start by listing all your expenses. Yep, all of them—even the little stuff. Once it’s all on paper (or a spreadsheet), you’ll see the bigger picture. That $5 latte might not seem like much, but add it up over the month, and yikes—it’s a lot. Now ask yourself: is that daily “I deserve it” treat really worth how much space it’s taking up in your budget? Probably not. So let’s be mindful about where our money goes.

At the end of the day, it’s all about being intentional. Sure, you can still treat yourself—just make sure you’re spending on things that matter to you in the long run. We can all live our best lives without the impulse buys and still come out on top. 💪💸

And here’s a little sneak peek: we’re developing a feature in our Wicked Pay mobile app to help you keep track of your spending effortlessly. Our hope is that you’re able to keep your personal finances in check so that you can focus on bigger things like building and managing credit. We can’t wait for you to check it out soon!

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