Brexit: A primer for Americans.
Voters in Britain singlehandedly ignited an international crisis with their historic decision to leave the European Union last week.
The British exit, or “Brexit” for short, continues to dominate the news, spawning talk of regret, a re-vote and recovery from what The New York Times described as a massive Brexit “hangover.”
It’s easy to think the June 23rd vote won’t have an impact on family finances over on this side of the pond, but experts say it already has. We’ve pulled together three ways in which the vote hit your wallet and what you need to know in each case.
Cheaper Travel. It doesn’t feel great to mention this when Britain is still reeling from the historic vote, but for anyone planning a vacation to Britain in the near term, your cash will go further. As of this morning, the exchange rate had $1.32 (USD) equaling one British pound, representing a 30-year low. If you have existing plans to travel to Britain, exchange some of your currency now, says Mike Stitt, the North American president of Travelzoo, to take advantage of the post-vote slump. Stitt also advised prospective U.S. travelers to look for special deals since the industry response in times of crisis is to entice travel.
Depressed 401(k). Immediately following the Brexit vote, the S&P 500 index had its worst opening since 1986. These globally fueled losses affect everyone’s stock portfolio in some way. The main advice here is to stay put. If anything, use this time to review if you are making the most of any employer matching and consider increasing your contributions. Fidelity research from the 2008 crash found that investors who stayed the course and continued contributions in workplace savings saw a “29.3% leap in their average account balances for the 18 months through March 2010 thanks to market gains, contributions and other plan activity. Meanwhile, plan participants who stopped contributing in late 2008 or early 2009 experienced an average gain of just 15.3% on average.” Traditional deposit accounts will be less effective due to continued low interest rates, but finding the highest savings account yield is possible if you shop around. Our bank rates are monitored and updated.
GRS is committed to helping our readers save and achieve their financial goals. Savings interest rates may be low, but that is all the more reason to shop for the best rate. Find the highest savings interest rates and CD rates from Synchrony Bank, Ally Bank, and more.