5 Ways To Election-Proof Your Finances
The man who sits in the White House can change your financial situation for better or for worse. It’s better to be prepared than surprised.
The 2016 presidential election results surprised many – maybe even the winner, Donald Trump.
As the tide shifts from one president to another – especially toward one who has no political experience – many people are wondering just what will happen with the economy, jobs, and taxes.
Will he repeal the Affordable Care Act (ACA) which proponents point out provides health insurance for those with pre-existing conditions and offers free birth control? Will the stock market tank and economy plummet? And will he successfully lower taxes? How will his administration affect your personal tax situation and employment opportunities?
The answer? We don’t really know.
Nonetheless, there are ways to election-proof your finances (no matter who’s the president).
With any shift in administration, there’s always fear of the unknown. Regardless of your political allegiance, there’s always uncertainty when it comes to what newly-elected presidents will do and what the results will ultimately be.
NATURALLY, MILLENNIALS ARE A BIT RISK-AVERSE – AND WHO COULD BLAME THEM?
One thing that can help is to save. Sure, money can’t solve all your problems, but having a good cushion helps you weather the storm in uncertain times.
If the economy tanks and you lose your job or your business suffers, it won’t be the end of you. If public programs get cut, you’ll have something to fall back on. Strive to save at least one year’s worth of expenses in a high-yield savings account to help you rest easy.
(Need help saving? Track your money through Personal Capital to find where you can cut)
Play the Long Game
Many millennials saw their parents’ retirement portfolios and investments tank after the Great Recession of 2008. Naturally, millennials are a bit risk-averse – and who could blame them?
In the past few weeks, I’ve gotten notices from friends, frantic for an answer. “Should I get all of my retirement accounts and investments out of the stock market?” they ask.
No. Though it may seem tempting, you want to play the long game when it comes to investing. When you’re in your 20s and 30s, you have lots of time on your hands to make up for any losses – you literally have decades.
Even low-end estimates of returns are still better than the paltry earned interest on any savings accounts. Don’t be swayed by emotion when it comes to investing. Have a strategy regardless of how things seem in the short-term.
Open an HSA
No one really knows what a new administration might mean for healthcare. When there are more questions than answers, it’s time to prepare for any possibility. One way to prepare for healthcare costs is to open a health savings account (HSA). If you have an eligible high-deductible health plan, you could benefit from an HSA.
According to money magazine Kiplinger, “An HSA gives you a triple tax break: Your contributions are sheltered from income taxes, the money grows tax-deferred, and the funds can be withdrawn tax-free for medical expenses.”
Have Multiple Streams of Income
As the saying goes, don’t put all your eggs in one basket. This is especially true when it comes to your income. If the economy worsens and you lose your job when unemployment benefits don’t cover enough, it could hurt. Really hurt.
Now is the time to innovate and create multiple streams of income. It can seem daunting to make more money, but with the sharing economy, it’s easier than ever. Consider these various side hustles (like driving for Uber or Selling on eBay) to get started and don’t rely on your J-O-B to be your one-stop shop for money.
Put your Money Where Your Mouth Is
Many non-profits and organizations are facing an uncertain future. Now is the time to put your money where your mouth is and start giving to things you believe in. Bonus: you can probably write some of it off on your taxes, too.
When it comes to politics and personal finance, so much is unclear. Rather than getting caught up worrying about the unknown, commit to taking action.
Only you can take care of yourself. The best advice is to prepare for the worst and hope for the best when it comes to your money. Regardless of what happens, you’ll be ready.
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