All eyes are on the Federal Reserve as it kicks off its interest rate easing cycle at its September meeting. But what do lower rates mean for your finances? Bankrate senior economic analyst Mark Hamrick joins Wealth! to break down how an interest rate cut could impact everything from your savings to your credit card.

"Americans traditionally fail to achieve their savings goals. That's true of retirement savings. A Bankrate survey about a year ago found that most Americans felt they were not on track with respect to their retirement savings... We know from Bankrate surveys over the years that the majority of Americans cannot pay an emergency expense of $1,000 or more from savings," Hamrick explains.

He notes that the higher interest rate environment is a "tremendous opportunity to prioritize savings." As the Fed will likely initiate a 25-basis-point cut, he believes this is good news since bond yields (^TYX, ^TNX, ^FVX) will come down at a slower pace than if the Fed were to move forward with a 50-basis-point cut. Hamrick also encourages Americans to take advantage of a high-yield savings account to take advantage of a 5% annual yield.

Credit card debt has reached new highs as Americans grapple with inflationary pressures. Hamrick explains that interest on credit cards will likely fall alongside the Fed's cuts, and stresses the importance of prioritizing debt with the highest interest charges. "I think that's the way to go because that's where you get essentially the best return on your money, paying off that high-cost interest right away," he argues.

He adds that it is "wise to forestall borrowing" at this moment in time. He encourages Americans to put off taking out car loans, for instance, and instead using the money to build up savings and avoid further credit card debt.

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This post was written by Melanie Riehl