American consumers have seen two years of record-low interest rates, but the Federal Reserve says a strong labor market and high inflation warrant a rate hike "soon." 

While this is the first rate hike since the beginning of the COVID-19 pandemic, it may not be the only increase Americans will see. In fact, some banks on Wall Street are anticipating a total of five hikes over the next couple of years. Objectively, this is good because it means the economy is expanding and unemployment is falling, leading to greater corporate profits.   

However, it also means consumers have some money moves to make sooner than later. This leaves a little time for consumers to prepare their finances, but don't panic. Here are a few considerations: 

Refinance your mortgage 

The current interest rate on a 30-year fixed mortgage is 3.55%, so if your mortgage rate is higher than this, you should start shopping around for an option to refinance your mortgage. While one or two rate hikes likely won't break the bank, even a 0.25 percentage point difference can add up for someone who has a higher mortgage balance. And, as home prices also surged over the past two years, borrowing rates will only get more expensive.  

Refinancing your mortgage can help you save hundreds each month, and thousands over the life of the loan. The higher your credit score and the more equity you have in your home, the better your options.  

Pay off debt quickly  

If you have any outstanding debt with high or adjustable interest rates, such as credit cards, now is the time to buckle down to pay them off. Because borrowing rates will increase, having outstanding debt can put you further behind since less of your monthly payments will go toward the principal balance, and more will go toward interest. 

This could also include refinancing student loan debt if you're able to get lower rates, even though there is a forbearance on payments until May.  

Plan for large purchases 

If you've considered making a large purchase, such as a car or home, but have been putting it off, you may want to consider taking the leap. Higher borrowing costs and rates is just one factor to consider, but take some time to look at where financing is today and where it could be in three, six, nine, and 12 months to understand if now is the time to make the purchase or if it still makes sense to wait.  

Adjust your investments 

Don't tap into your emergency fund or make any drastic decisions, but now is a great time to review your investment portfolio and potentially make some adjustments. For example, consider bonds with shorter durations so you don't lock in at low rates for a long period of time. Or, look into investing in shares of financial companies because the rate hike will benefit the industry overall. 

Also consider the opportunity to buy stocks at lower prices now, as they are more likely to increase over the next year.  

Switch to a high-yield savings account 

Higher interest rates can allow savings accounts to earn more money on deposits. These interest rates still won't be super impactful and you won't get rich, but it is a good time to move your emergency fund or savings to a high-yield account to take advantage of the interest hike.