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Preparing our finances for a fascist regime (webinar replay)
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Preparing our finances for a fascist regime (webinar replay)

What you can do now to protect peace and stability in your finances over the next four years

Welcome to the Healthy Rich podcast, a show about money for misfits!

I’m Dana Miranda, a financial educator and author of You Don’t Need a Budget.

In this episode, I discuss:

🥑 What we might expect for consumer prices, taxes, student loans and retirement plans under the final Trump term.

🥑 What you can do now to protect peace and stability in your finances.

🥑 The challenge of setting yourself up for financial independence from estranged loved ones.

🥑 How to rethink and expand your resources to find comfort in times of uncertainty.


You can always follow the podcast right here via email or Substack, or you can subscribe in your favorite podcast app. The transcript is below. Enjoy!


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Transcript:

Welcome to the Healthy Rich podcast, a show about money for misfits. I'm Dana Miranda, a Certified Educator in Personal Finance and author of You Don't Need a Budget: Stop Worrying about Debt, Spend without Shame and Manage Money with Ease.

Today, I'm sharing a replay of yesterday's live session on preparing our finances for a fascist regime. In the session, I talked about what we might expect for consumer prices, taxes, student loans and retirement plans under the final Trump term, plus what you can do now to protect some peace and stability in your finances over the next four years. I also discussed the challenge of setting yourself up for financial independence from your family of origin, in case you need to distance yourself from folks who don't share your values. And we talked about ways to expand your resources to find comfort no matter what happens in the political sphere.

The full live session was free and open to anyone who registered. I'll share some of the recording here, but you'll have to be a paid subscriber to get the full 60-minute session. You can subscribe at healthyrich.co and find the full recording with a video under Classes, or you can listen to the audio in the Substack app or through your private feed in any podcast player.

I know many people are worried about what this administration might mean for your money, and I know this session can’t address all of your fears, but I hope it gives you some comfort and a few steps to take to prepare as we begin this new challenge in our country.

So today, since we've just transitioned into Trump's final term here in the United States, we're talking about how to prepare our finances for a fascist regime. We're going to talk about some things that you've probably been hearing about in the news, and how that could affect your money and what you might be able to do about it. We're going to focus as much as possible on personal finance, but we'll have to touch on some policy stuff for context. In some cases, I know that this stuff can bring up a lot of anxiety for people, so I ask that you just please take care of yourself and feel free to drop out at any time if you have to, and you can follow up afterwards if you have any questions.

So here's what we're going to cover today.

  • I'm going to get into the state of things. So what experts are expecting based on campaign promises and some recent actions that we've seen and what that could possibly mean for your money.

  • I'll talk about what we can do next to protect peace and stability in our finances over the coming years.

  • And we'll also discuss the challenge of setting yourself up for financial independence from your family of origin, or others that you might currently count on for support in case you need to distance yourself from them.

  • And finally, we'll talk about ways to take action and also shift your mindset, to expand your access to resources so you can stay comfortable among all of this uncertainty.

What we won't cover today is:

  • Specific investment advice. Like I said, I'm not an advisor, and I don't know your individual circumstances, so please don't take anything that I'm saying as personalized investment advice or financial planning advice. Work with an actual financial advisor or planner to make any investment decisions.

  • I also won't get much into what experts are predicting for the stock market, because that's always speculative. And as a general rule, the best advice for most savers is usually to not make any big moves based on current events. So I'm not going to get very deep into the details on that.

  • I'm not going to discuss the nitty gritty of potential tax implications for high earners, either or those with a lot of wealth, and that's looking at, generally, people who earn more than $450,000 a year. I'm not a tax expert, so I don't have the best information for you there. And I'm also kind of operating on the assumption that if you have that kind of wealth where you're making tax moves to hold on to it, that you have access to a financial planner and an accountant to help with tax planning. If that's not the case for you, feel free to get in touch afterwards, and I can point you towards some ethical financial planners that could help you out.

The state of things

So let's start with the current and expected state of things that might impact your finances in the coming months and years.

The first thing to know is that almost everything that we're trying to prepare for is speculative because it's so early. We can base our guesses off of campaign promises and some already attempted executive actions, but Trump has proved to be mostly ineffective at actual policy change in his first term, and the new administration is already showing itself to be pretty disorganized, and it's raising a lot of questions about just how effective it might be. So I won't get into the political or legal weeds on how likely any of these actions are to go through, or the challenges that they might face. Just know that anything having to do with Trump comes with huge caveats and a lot of question marks. So we'll talk about some specifics that you have probably been seeing in headlines, but really the main theme of dealing with money under this regime is going to be uncertainty. So that's the major thing that we have to prepare for — as much as that might be possible.

So here are some of the big things that you might already be hearing about.

Consumer prices

Consumer prices is probably one of the big ones. We know that Trump is prioritizing setting high tariffs on imported goods and attempting mass deportation of immigrants, any movement on those would mean higher prices across a lot of consumer categories. And just a reminder, a tariff is a tax that the US charges to companies here when they import goods from other countries, so companies typically pass those higher costs onto customers by raising their prices and attempts at mass deportation would mean, among of course, a lot of other things, pulling a ton of people out of the workforce. So at the personal finance level, this kind of action would mean disrupting tons of industries and probably creating supply chain issues, especially in construction and healthcare and agriculture, which employ a lot of immigrants, and so for consumers, that disruption would mean higher prices in those categories.

Taxes

Just a quick look at taxes. So Congress is expected to extend and possibly to expand the tax cuts that were passed in 2017 under the Tax Cuts and Jobs Act, and those are set to expire later this year, but Congress is expected to extend them and maybe add add more cuts to that. Most of the benefits of the existing cuts and the proposed new ones go to corporations and to people earning, again, more than $450,000 a year. But some of the notable aspects that are currently in effect and that are expected to continue that would affect a broader swath of people are:

  • That you would have lower individual income tax rates on most tax brackets.

  • A higher standard deduction, which is about double what it was in before 2017 and that's in place of several individual tax deductions that were eliminated to make it easier.

  • A $2,000 Child Tax Credit. (Before 2017 that credit was $1,000.

  • There was some mention of eliminating the income tax on Social Security benefits, but that wasn't part of the official Republican Party platform, and a lot of questions have been raised about how that could happen and and the program would continue to be funded. So the plan for that is unclear, but it has kind of been floating out there.

  • Another thing that's been floated is that both Trump and the Republican Party platform promised to eliminate the income tax on tips. So that plan, again, is unclear, and we're not sure how much of a priority it is, but you might see that change on your paychecks if you're a service worker.

Student loans

So student loans — around 8 million federal student loan borrowers were able to enroll in the new SAVE repayment plan under Biden before it was blocked last fall by some court action, and that plan would have lowered monthly payments and almost eliminated interest for a lot of people. So if that's you, your loans are kind of in limbo right now, but what's happening is that they are in an interest-free forbearance while courts decide whether to stop SAVE completely, or let it continue or make some changes. So you don't owe payments and your loans are not accruing interest. But if you're in any other repayment plan for federal loans, whether it's the standard repayment or any other income driven repayment, your payments would have resumed after the pandemic pause and and probably look as normal now.

We don't know what the courts are going to say about SAVE, but no one expects that the Trump DOJ is going to continue to defend the plan the way that it was being defended in court under Biden. So the Republican-led states that have been challenging it will probably be able to stop it eventually. And when that happens, what would happen is your loans would be put back into one of the other income based repayment plans to resume payments in the same way that they were before SAVE was rolled out in August of 2023.

The Department of Education did recently send out an update just before the inauguration, to say that the earliest that they would expect payments to restart would be December of this year, of 2025. So you can kind of plan for that, and we'll talk a little bit about how to plan ahead for that later.

We can assume that any other plans for broad forgiveness won't be pursued. So anything you heard discussed or possibly planned under the Biden administration are not likely to continue. But existing forgiveness options, like the Public Service Loan Forgiveness, which is a big one, and any forgiveness that comes with income driven repayment plans, is expected to remain intact. But we do know that reduced resources and general disorganization at federal agencies under this administration would mean that navigating those options is going to look like it did under the first Trump term, if you had any experience with that. So a lot of reporting errors, maybe long waits. Even if you've earned forgiveness and you remain eligible for that, it might just get harder to administer. So we'll talk in a minute about what some experts have recommended to do to prepare yourself for that too.

Retirement planning

Some more things to expect. A lot of questions that I've gotten have been about retirement planning. So, what to do with your retirement savings to protect against a potentially volatile stock market. And the standard advice from experts here is not to make any major moves right now. Retirement accounts are for long term saving, so you shouldn't make major investment decisions based on current news. Investments are meant to be able to ride out market changes over the years. There is probably good news for most people who are saving for retirement, though the overall market forecast was largely unchanged by Trump's election, and experts are expecting the market to continue to grow as normal. The election didn't change that forecast.

Reports do expect volatility in some sectors, mostly because of tariffs and potential mass deportation, but overall, they're saying that you can continue to bolster your investments for the long term by keeping your portfolio diversified, as it should always be for long term savings.

The biggest change we might see for retirement planning is reduced funding for Social Security. Trump has walked back some of the campaign promises that he made to cut Social Security benefits after realizing that they were really unpopular, and the Republican Party platform explicitly promised to keep Social Security and Medicare intact. But that's another place where analysts don't know how the program might survive any tax cuts that have been promised. So it's kind of a wait and see situation there again that just falls under the theme of uncertainty.

And again, Social Security and disability recipients will probably also be affected by disorganization at the Social Security Administration, just like with the Department of Education and student loans, under staffing and just general disorganization will make it harder for the agency to serve benefit recipients. So that doesn't mean that you'll actually lose eligibility for benefits, but if you have questions or issues that need to be addressed that just might be more difficult than it might have been in different circumstances.

Real Estate

And a note on real estate investment. So I asked a few experts in the real estate space what they're expecting under Trump, and they're mostly optimistic. They're hoping that deregulation under Republicans will mean that it'll be easier to borrow money to invest in property. It's not clear that that benefits everyday people looking to buy or remodel homes in the coming years. But just a note that if you've been worried about potential volatility in the value of your home, it sounds like experts aren't expecting that to be an issue any more than it would have been under another administration.

There could be a problem with the cost of construction, though, again, because of tariffs on building materials and deportation of construction workers or threats of deportation keeping people from work, so that would impact the cost of any new construction, expansion or remodeling that you would be doing on your home or a new property.

So in light of all of this, what can you do now to look after your money?

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