Five key economic topics right now – and how they affect you

1. International events and their impact on the Swedish economy

Recent events in the U.S., including the political turmoil surrounding Trump and relations with Ukraine, may have consequences for Sweden as well. Uncertainty in global markets affects currency exchange rates and interest rates, which in turn influence Swedish mortgages, investments, and purchasing power.

To stay financially stable in an uncertain economy, it’s wise to follow global developments, review your personal finances, and consider securing parts of your loans or further diversifying your investments. Diversification is not just about asset types but also about geography and industries. To stay up to date with international trends, you can subscribe to financial newsletters, use news apps on your phone, and listen to podcasts focused on the economy. These steps will help you make more informed financial decisions.

2. Rising food prices – and it could get worse

Food prices have increased, and the trend is expected to continue. This is due to multiple factors, including rising raw material costs, more expensive transportation, and poor harvests. Since it takes time for producers’ costs to be reflected on store shelves, we can expect prices to keep rising at least until after summer.

As food is the second-largest expense for Swedish households after housing, it’s worth planning your grocery shopping carefully. Creating weekly meal plans, comparing prices between stores, and taking advantage of discounts can help keep costs down. Shopping seasonally and reducing food waste by freezing leftovers and using whole ingredients are also effective strategies. Additionally, trying out store-brand products, which often match the quality of more expensive brands, can result in noticeable savings.

3. Climate change impacts insurance and the housing market

The wildfires in California have significantly affected the insurance industry and the housing market in the western U.S. Similarly, climate-related events such as floods and storms could have financial implications in Sweden.

To protect yourself, it’s important to review your home insurance policy and understand exactly what it covers. Check whether your insurance includes natural disasters such as floods and storms – if not, it may be worth switching or adding extra coverage. Additionally, you can reduce risks by ensuring proper drainage around your property and having an emergency plan in place should an unexpected event occur.

4. Tax changes and deductions – how they affect your finances

Every year, tax regulations and deductions change, potentially impacting your personal finances. These changes may involve income tax adjustments, increased deduction limits, or new taxes on specific goods and services. In 2024, for example, the maximum threshold for ROT and RUT deductions has increased, benefiting those planning home renovations or purchasing household services. However, it’s important to remember that deductions function as tax reductions – meaning you must have paid enough tax to fully utilize them.

To avoid missing out on benefits or facing unexpected costs, it’s a good idea to review your tax return in advance and ensure you are claiming all eligible deductions. Use the Swedish Tax Agency’s online services to simulate your tax situation or consult a financial advisor to optimize your tax return. Another useful tip is to stay updated on tax changes throughout the year, allowing you to adjust your financial plans accordingly.

5. Savings and emergency funds – the key to financial security

Financial experts unanimously agree on one thing: having an emergency fund is always beneficial. The best way to build a personal financial buffer is to save consistently. Even small monthly savings can gradually create security against unexpected expenses.

Setting up an automatic savings plan makes it easier to stay consistent, and over time, your savings can grow through returns. Thanks to the compound interest effect – where both your contributions and previous earnings continue to generate returns – even modest savings can make a significant difference in the long run. This approach not only provides financial security in emergencies but also allows you to build a more stable economic future

Summary

Economic changes affect us all, and while challenges exist, there are also opportunities to prepare and strengthen your personal finances. By staying aware of international trends, food prices, insurance adjustments, tax changes, and savings strategies, you can build a solid foundation and reduce the risk of financial surprises. Having a plan and making conscious financial choices today can provide greater security and flexibility in the future.