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How the Federal Reserve interest rate hike will impact you

Posted at 11:20 PM, Jul 27, 2022
and last updated 2022-07-27 23:20:38-04

TAMPA, Fla. — Rent, groceries, cars and gas, it’s expensive these days. Some relief might be in the way, at least the federal reserve hope so.

“In our household I would say the biggest challenge is the cost of food,” said Melissa Carl.

Aside from being a wife and a mother, she’s also a Hillsborough County school teacher. And just like millions of hardworking middle class families —across Florida — the economy is crippling her family too.

“Just buying even a gallon of milk now is like four or five bucks. Gas has been a challenge,” she said. “The basic necessities are extremely expensive for our family. And eats into the budget allocation towards other things. “

The skyrocketing costs are due to inflation, which is up 9.1%, according to the federal reserve.

“Ever since covid everything has been out of control. This is another thing that’s out of control,” said Carl.

In order to turn things around before the country ends up in another recession, the federal reserve is raising interest rates for the fourth time this year.

The rate has gone up .75%. For example, if you have a credit card balance totaling $5,010 it will cost you another $283 in interest before it’s paid off.

“The interest rate hike is stressful,” said Carl.

Car notes, mortgages, and some student loans will cost more also.

Carl said she’s “worried about how this will impact teachers” especially the younger ones. They’re already underpaid. Florida ranks 48th when it comes to teacher pay.

“It’s really going to be hard. A lot of them have student loans,” Carl said. “I’ve known of some teachers who can’t afford dental work because they don’t have the income to pay for it.”

The federal reserve believes making borrowing more expensive will slow the economy down. This is also supposed to help with the supply chain issues.

“You don’t want to start panicking,” said Amanda Vilardi.

She’s a branch manager for Achieva credit union.

“The only thing we can really do is prepare,” Vilardi said.

“Evaluate your budget see if that’s something you can control if an increase does happen.” Vardi said. “Get with your banker and make sure you are cutting off those expenses you don’t need.”

Achieva also offers free classes to help you learn how to better manage your finances. You do not have to be a member to take part in one of their classes.

For more information visit Achieva Credit Union here.