Hi friend,

Last Week, the Federal Reserve did something it hadn't done in three years. It raised interest rates.

Only a quarter of a point. It is the kind of headline that is easy to scroll past. Please don't.

Suze Orman made the point on her podcast this week, and I could not agree more: higher rates can work for you or against you. Which one depends entirely on what you are doing with your money right now. So let's make sure they are working for you.

The Fed raised its benchmark rate to a range of 3.75% to 4%. The vote was unanimous. The reason is inflation, which is still running higher than the Fed wants, largely pushed up by energy and oil prices.

And they are signaling they may not be done. Their own projections point to one more increase before the end of the year.

Here is why that matters to you. The Fed does not set your credit card rate or your savings rate directly. But almost everything takes its cue from this number. When it moves, your bank, your credit card company, and your lender move too. Some quickly. Some slowly. And some only when it benefits them.

That last group is where I want to start.

Pull up your savings account. Not later. Now.

If your money sits at a big traditional bank, you're probably earning a tiny fraction of a percent. Meanwhile, high-yield savings accounts, money market funds, and Treasury bills are paying dramatically more, and that gap just got wider.

Let's make it real. Say you have $30,000 in your emergency fund. At 0.01%, that money earns you $3 a year. Three dollars. At around 4%, the same money earns you roughly $1,200. Same money. Same safety, as long as the account is FDIC insured. One decision.

Your bank is counting on you being too busy to notice. I want you to notice.

This week, move your emergency savings into an FDIC-insured high-yield savings account or money market account. If you have cash you know you will not touch for six months to a year, look at CDs or Treasury bills. And since another rate hike may be coming, consider keeping those terms shorter or spreading your money across a few maturity dates so you can take advantage if rates climb again.

Here is the side of higher rates nobody enjoys talking about.

Most credit cards have variable rates tied to the prime rate, which moves right along with the Fed. That means when the Fed raised rates last week, your credit card company likely raised yours too, usually within a billing cycle or two. Nobody called to ask your permission. The same goes for home equity lines of credit and other variable rate loans.

If you are carrying $8,000 on a card at 24%, you are paying about $160 a month in interest alone. That is $160 that is not going toward your future, your freedom, or your peace of mind. And every increase makes that number a little bigger.

So here is your assignment. Write down every debt you have, the balance, the interest rate, and whether that rate is fixed or variable. Seeing it on paper changes things. Then go after the highest variable rate first with everything extra you have.

Call your credit card company and ask for a lower rate. It is a five minute call, and it works more often than you think. If you are considering a 0% balance transfer, only do it if you have a real plan to pay it off before the promotional period ends and you will not run the old card back up.

Markets tend to swing around Fed decisions. If you have been watching your accounts bounce up and down and feeling your stomach drop, I understand. But let's separate emotion from strategy.

If your money is in retirement accounts and you will not need it for ten years or more, short term swings are noise. Selling out of fear turns temporary losses into permanent ones. Keep contributing. Stay the course.

If you need money in the next three to five years, for a home, tuition, or a business launch, that money should not be riding the stock market in the first place. Remember the Hold On Fund we talked about? This is exactly why it exists. When your near term money is protected, market headlines lose their power over you.

So many of the women I work with are excellent savers. You hold cash because it feels safe, and I respect that instinct. But safe in the wrong account is not safe. It is slowly losing ground to inflation while someone else earns on your money.

And those of you carrying debt are often doing everything right everywhere else. You are just letting one expensive balance quietly drain you month after month.

Neither of these is a character flaw. They are simply decisions that have not been made yet. And as I always say, later is the most expensive word in personal finance. In a rising rate environment, later costs you on both sides. Less earned on your savings. More paid on your debt.

Set a timer and do these four things.

First, look up the interest rate on every savings and checking account you have. If it is not competitive, open a high yield account and move your emergency fund.

Second, list every debt with its rate, and circle the variable ones. That is your target list.

Third, look at your retirement accounts and do nothing except confirm you are still contributing. Seriously. Look, breathe, and close the app.

Fourth, put a reminder on your calendar for the next Fed meeting later this fall, so you are ready instead of reactive.

That is it. Twenty minutes to make sure higher rates are working for you, not against you.

You do not need to predict what the Fed will do next. You just need to be positioned well no matter what they do. That is what financial freedom looks like in real life. Not guessing. Preparing.

I am proud of you for reading this far. Now go take one step.

With you every step,

Talk soon,
Najma Zanelli
Explore Offerings
Founder, NAZ Global Consultancy
Follow me on IG: @najma_zanelli
Email: [email protected]

P.S. Reply with the word RATES and tell me which of the four steps you are tackling first. I read every reply. And if you want help building a plan around your savings, your debt, and your next move, that same reply is how we start the conversation.

This newsletter is for educational purposes and is not personalized financial advice.