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Certain financial planning rules apply no matter the year or economic environment, but others are reflective of the times. In 2024, these rules mirror trends that range from inflation and interest rates to artificial intelligence. Some of them took root in the COVID-19 economy and continue to resonate today.
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If you’re making a financial plan for the remaining months of 2024, here are four emerging trends to keep an eye on.
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Stock Market Volatility
Anyone who has paid attention to the stock markets this month knows that there have been some very bumpy rides. As The Wall Street Journal reported this week, there has been a “once-in-a-generation rout” in Japanese stocks as well as wild swings in the values of the “Magnificent 7” tech giants (Alphabet, Amazon.com, Apple, Meta Platforms, Microsoft, Nvidia and Tesla).
The question is if (and how long) the volatility will continue.
“When you’re low for so long, you’re bound to have a pickup,” Eric Metz, chief investment officer at SpiderRock Advisors, told The Wall Street Journal. “When it changes, it changes fast.”
What this means for the rest of 2024 is that investors will take an even closer look at job reports and corporate earnings to determine where the economy is headed and how that will impact equities.
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Expansion of AI in Personal Finance
Artificial intelligence isn’t exactly new in personal finance — it’s been used in this capacity for years. But AI has evolved into different areas and will continue to do so in the months and years to come.
For example, AI-powered financial tools have become accessible to a much wider range of investors in 2024, thanks to a rise in user-friendly interfaces and automated services that simplify the investment process. These tools are useful to both novices and seasoned investors because they provide insights and guidance that are easy to understand and implement.
Leveraging the power of AI helps enhance your financial decision making, maintain emotional discipline and grow your wealth more effectively. The integration of AI in personal finance is not merely a trend, however. It’s a fundamental shift in helping consumers reach their financial goals with greater precision and confidence.
Interest Rate Are Still High
For much of 2024, many economists have predicted that the Federal Reserve will finally begin easing interest rates as inflation becomes more manageable. But that hasn’t happened. As Experian noted in a recent blog, credit card interest rates remain close to the record highs they hit last year, and mortgage rates remain high as well. These trends continue to impact everything from consumer spending to home ownership rates.
Escalating Household Debt
Recent data from Experian found that Americans owe more than $17 trillion in total consumer debt — a record high. The biggest increases are tied to home equity loans, credit cards and personal loans.
Consumers with poor credit have seen their debt balances grow the most in recent years. “Gen Z and millennials have been hit the hardest, while baby boomers and the Silent Generation saw decreases in their average balances,” Experian wrote.
These trends indicate that younger consumers are relying more on debt to manage their expenses to help deal with high inflation and high interest rates.
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This article originally appeared on GOBankingRates.com: 4 Emerging Financial Planning Trends for the Rest of 2024
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