With 2021 in the books amid rising inflation, low interest rates, and unprecedented economic times, it is time to take a look at what is in store for 2022. Last year saw some incredible gains in both the housing and stock market in addition to a massive rise in crypto currency valuations as the nation continued to recover from the recession of the second quarter of 2020. Let’s take a look at 5 things you should know as we kick off the new year.
- Your base pay has increased, but not at the rate of inflation: As 2022 rolls around, military base pay has increased by 2.7%. While this is a substantial pay raise, it falls short of the hot rate of inflation, which is currently 6.8%. What exactly does this mean for you? It means that you may have effectively taken a pay cut depending on what you spend your money on. Things at the grocery store, gas pump, and auto dealership have increased in price substantially over the last year. Consider that expense bump when budgeting or calculating your personal expenses in 2022. They may have increased significantly.
- BAH has increased by 5.1% amid a red hot housing market: This year’s BAH rates are out and can be calculated here. It’s worth taking a look at what your BAH rate is as you look to make financial decisions in the new year. BAH rates impact the housing market, rental market, and local economy in your area and are essential when deciding to rent or purchase a home. With 2022’s incredibly hot housing market, housing expenses are also on the rise.
- Speaking of Housing, the Fed will likely raise rates this year multiple times: What exactly does this mean? It means that the Federal Reserve will likely increase the cost of borrowing money in 2022 to curb inflation. As far as impact on the housing market, this may mean higher interest rates as you look to refinance or purchase a home. With higher rates, that means higher mortgages, which could cool off the red hot housing market.
- If you are transitioning, there are plenty of Jobs: The job market has been a hot topic for most of 2021 with what many are terming the “great resignation” as skills mismatches and other opportunities are leading people to leave their jobs in droves. Currently, there are over 10 million job openings in the United States with unemployment in December coming in at 3.9%. If you’re looking to transition and find a job after your time in the military, there are plenty of jobs available.
- Cryptocurrencies have fallen hard from their peaks of 2021: If anyone follows the crypto currency market, they’re aware of the recent 20+% downturn of cryptocurrencies such as Bitcoin and Ethereum. While many have differing opinions on the future of crypto, this could either be a buying opportunity or a good time to leave the market altogether. Prior to jumping in, definitely do your due diligence. $
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