interest rates

The Fed’s decision to boost interest rates – when it finally happens – will not significantly impact your household budget, at least not immediately. Instead, take it as a signal to get your finances ready for the increases to come.

“It’s like the first snowfall,” said Greg McBride, chief financial analyst for Bankrate.com. “The first snowfall is not what closes roads and cancels school. But it’s a sign the seasons are changing.”

The U.S. Federal Reserve Bank typically changes the influential federal funds rate in a series of moves over time rather than all at once. The Fed’s last sequence of 17 quarter-point rate increases over two years ended in June 2006, while 10 subsequent cuts between September 2007 and December 2008 left the rate near 0 percent.

Future increases may well be more gradual given the challenges the economy faces, McBride said.

“This is going to be different than last time,” McBride said. One increase “doesn’t mean the second will be on its heels.”

In my latest for Reuters, a look at what an eventual boost in the rates will mean for your finances.