Expert CPA & CFP Howard Hook Addresses the Topic
(Princeton, NJ, JAN 9, 2024) — Complex, hard-to-grasp news about foreign trade policy, currency issues, geopolitical concerns and other global and national economic matters may be difficult to process, much less connect to your own finances.
So, what issues on the national and world economic front should you as a consumer pay close attention to as they can very well impact your own financial well-being?
Clearly, inflation is one of them. Inflation is defined in a recent New York Times article as “a general increase in prices, which will cause a loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys.”
According to Howard Hook, a CPA and Certified Financial Planner with the fee-only financial planning firm of EKS Associates in Princeton, NJ, “We tell clients that inflation can be very personal. Someone who drives an electric car, or is retired, or does not commute to work may not be hit as hard by inflation as the price of gas does not affect them as much as someone who is still working or who drives a gas-powered auto. Similarly, someone who feeds a large family would be more dramatically impacted by the increase in the price of eggs or fruit juice than an empty nester or someone who lives alone.”
Taxes are another issue that people should pay attention, he says. “Again, tax law changes usually affect different people in differing ways so we tell our clients that it is important not just to read the headlines, but to understand just how the tax law will apply to them.”
Likewise, he adds, news on such developments as increases or cuts to social security or Medicare can have major impact on retirees.
