Every presidential election brings big changes, but with Donald Trump back in the mix and Republicans holding power in both the Senate and House, we’re looking at some significant financial changes.
According to a survey by the National Endowment for Financial Education, nearly half of Americans—about 47%—expect their financial situations to change over the next four years. So, what exactly does this mean for you? Well, get ready for some drama.
If you remember the Tax Cuts and Jobs Act of 2017, Trump’s signature legislation, you’ll know it made tax life a lot easier for many people. It reduced tax rates, nearly doubled the standard deduction, and removed the requirement to itemize deductions for most people. But that tax break was set to expire in 2025—until now. With Trump’s return and strong support in Congress, expect him to keep the tax cuts rolling. He’s even throwing around ideas like making tip income and overtime pay untaxed. Sounds great, right? Well, there’s a catch. This could open the door for people to claim just about everything as “tips” or “overtime,” and we all know how that could end.
Oh, and if you’ve been eyeing a shiny new electric vehicle, Trump’s proposal might end those sweet tax credits that offer up to $7,500 off the price. So, keep that in mind before you go car shopping.
Then there’s the issue of tariffs. Trump has long supported imposing tariffs on foreign goods, believing it will lower inflation and make life easier for American families. It sounds good in theory, but the reality is different: raising tariffs can lead to higher prices, not lower ones. Increased costs for goods may be passed on to consumers. Additionally, foreign countries are unlikely to accept these changes without taking action. Retaliation is guaranteed, which could further slow down the economy. Some economists even think this could shave nearly 2% off the country’s GDP. So, no, this is not the inflation cure Trump’s selling. And if you think tariffs are just a negotiation tactic, well, I wouldn’t bet on it.
After Trump won, the S&P 500 jumped by 2.5%, which people say is the best post-election rally in decades. Sounds great, right? Well, hold on a second before you start celebrating. Just because the market shot up doesn’t mean it’s going to stay that way. This could be one of those quick spikes that look good for a minute and then crash back down, as we’ve seen before. Experts are warning people to be cautious because these stocks may not be as valuable as they appear.
Tax changes, tariffs, and stock market swings will obviously mess with your money. So, pay attention to your finances and be ready for anything.
