Watching the presidential elections always makes me think about my money. While there are a ton of important issues, I always relate it back to how is this going to impact me? And many of their positions and policies are focused around money or could impact my money in ways that I cannot control.
Regardless of which side you relate to most, regardless of who becomes President, their policies could impact your future. The presidential election could impact your money.
Their economic policies could cost you money. If you are working towards earning more, you could move up a tax bracket, causing you to pay more in taxes. One way to circumvent this is to put your money in as many retirement vehicles as possible that will tax you in a lower income bracket today versus when you get closer to retirement.
Recommendation: Max out your 401k, max out a Roth IRA
Increase in interest rates
With interest rates so low, there is nowhere for them to go but up. What does that mean if you are looking to buy a home, car, or even student loans? Basically, with the historical all-time low rates, there could be a chance that the Federal Reserve will raise them in December. For a big purchase, every time that interest rate increases, you can feel the sting.
While their decisions will impact foreign policy, and the outlook on foreign affairs, it could trickle down to the travel that you make.
Take for example, the Brexit vote a few months ago, not only did it affect foreign policy, but the pound is worth much less compared to the USD. In this example, if you are from the US and have any interest in traveling to England specifically, within the next year or so you might start to plan your trip. With the pound being down, our USD can go much further over there. Translation: it will be cheaper to travel and stay in England.
Not to get too deep into the interconnectedness of the oil industry, but as of today, oil prices are relatively low compared to a few years ago. But that does not mean that they wonâ€™t fluctuate when a new President comes into term.
While your econ class might seem a distant memory, supply and demand does affect price, so you could see gas prices go up in the future. While prices at the pump might not seem like they change that much, a major jump like a $1/gallon could mean an extra $40 every time you fill up. And within a month, that can be close to $100 depending on your driving.
Recommendation: Evaluate your budget and if gas prices go up, can you budget support an equivalent to an extra tank of gas each month. If it canâ€™t, look into cutting one thing out of your budget or look into how you can increase what you are making.
When it comes time to vote in November, make sure you look at how the policies could impact you and your wallet not just today but in the future.