5 Moves Of Money These Experts Think You Should Be Making Now When The Election Is Over

2020 was a year of great uncertainty, and 2021 could look the same.

Even with a possible vaccine on the horizon, no one knows exactly how and when the coronavirus outbreak will end. Millions remain unemployed as the effects of the pandemic recession linger. Several major pandemic relief programs are ending soon, and there are no guarantees that additional help is on the way.

At least the outcome of the US presidential election is no longer uncertain. But how will the new president’s policies affect people’s finances? Will they have any measurable impact at all, for example on taxes or student loans?

At least one expert says that people, President Joe Biden or not, should focus on the basic principles of sound personal finance no matter what.

“I don’t really think it’ll change the core concepts of everyone’s financial life,” said Jill Schlesinger, business analyst at CBS News and host of the Jill on Money podcast. “We blame presidents and governments too much for economic blame, guilt and glory.”

“This is a time when it really works to get back to basics,” says Schlesinger. “Have an emergency fund of six to twelve months of living expenses, reduce outstanding debt, and prepare for retirement.”

Is there something you should do to keep your personal finances ready for political change? We asked five experts for advice on how to take control of your finances under a new administration.

Larry Leap: Stick with your budget

Photo by Larry Sprung, founder and investment advisor at Mitlin Financial

You shouldn’t let the outcome of your election dictate your next cash move, says Larry jump, Founder and investment advisor at Mitlin Financial.

Rather than making decisions based on politicians’ promises, focus on what you can control and make adjustments to your financial plan as your life moves forward. This also includes maintaining a monthly budget to keep your expenses in check Debt settlement plan, Contributions to your emergency fund and retirement provision, and to the management of your investments.

Having a financial plan also means adjusting it accordingly changing priorities. For example, if you are investing for the long term, occasional reviews of your portfolio are important – and should lead to tweaks rather than major overhauls.

“You really need to break down your goals into short, medium, and long-term, then assign some financial metrics to them, and be able to create a schedule for how you are going to achieve those goals,” says Sprung.

Even though the markets can be volatile, don’t react. As long as you have long term goals, you can get through the ups and downs.

But don’t completely ignore what’s going on in politics either. When certain federal guidelines are passed under a Biden government – particularly those related to taxes or Student Loans for example forgiveness – then you can take these changes into account and possibly adjust your financial plan.

“If you did not have a joint financial plan, now is the time to understand the importance of one. Put one in place so that if the next recession or economic event hits you can mitigate some of the effects, ”says Sprung.

Farnoosh Torabi: Focus on saving and not paying off debts too aggressively

Photo by Farnoosh Torabi, a personal finance writer and host of the So Money podcast

“Nothing can be assumed, nothing will happen automatically. And even when laws are passed, it is still up to the individual to make sure they use them, ”says Farnoosh Torabi, personal finance writer and host of the So Money podcast.

One thing tells Torabi that you should do it not do now? Prioritize your debt over your savings.

That may sound unconventional, but 2020 changed a lot of things, including traditional financial advice. To keep your financial health right now, you may need to do a little differently. Saving should be your top priority, especially if you’ve lost your job or don’t have one Emergency reservesays Torabi.

If you have government student loan debt, you should avoid paying it off too aggressively over the next year just in case new relief comes in, Torabi says.

Part of Bidens $ 750 billion education plan is to cancel $ 10,000 student debt for all borrowers and the remainder of the debt for those who have attended public colleges or historically black colleges and universities and are making less than $ 125,000 a year.

“A lot has been suggested and given a lot of hope in terms of job creation, employment and student loan origination,” says Torabi. “But I think the smart money move still relies on the individual. By that I mean that we must continue to be accountable for our finances. ”

Torabi also recommends taking advantage of the federal student loan deferral program under the CARES Act until it expires at the end of the year. But be proactive, she says. Stay up to date on any student loan relief and contact your lender first to discuss what your options are if the relief does not extend into the next year.

Private student loans are a slightly different story. If you are having trouble paying private student loans, speak to your lender right away and try to avoid financial problems by asking Refinance or modify your loan.

“Whatever a government promises, we should look at it like the icing on the cake,” says Torabi. “We have to hope for the best, but plan for the same old, the same old. That means we’re doing the same things that we’ve always done to protect our finances. “

Jill Schlesinger: Look at a Roth IRA

Photo by Jill Schlesinger, certified financial planner and host of the

Opening of a Roth IRA or converting from a traditional to a Roth could be the next best step, says Schlesinger. It’s a tax-privileged investment account that is free to open and that allows you to deposit up to $ 6,000 per year if you are under 50 or $ 7,000 for those over 50.

The reason, according to Schlesinger, is that the US deficit widened even further during the pandemic-induced recession. There will be pressure on the government to raise taxes on Everyone Americans, not just the richest, she says.

“For example, with social security, you could imagine a scenario in which people who earn more money have to pay more into the system,” says Schlesinger.

Whether it’s Biden’s government raising it or someone else on the street, this is where a Roth IRA can come in handy.

“Tax rates are historically low. The better assumption would be, “I make a certain amount of money today. It is very likely that the tax bracket I am currently in could change and it could be higher than I imagine, ‘”says Schlesinger.

With a Roth IRA, you pay taxes at today’s lower rates and your dollars will grow completely tax-free forever. That means the Internal Revenue Service won’t knock on your door when you retire, even if tax rates are higher in the future.

“If you have experienced a loss of income this year, it is better to pay taxes in the lowest possible tax bracket, which would speak in favor of using a Roth instead of a conventional pension account,” says Schlesinger.

Katia Chesnok: Investing for the long term

Photo by Katia Chesnok, founder of the personal finance blog and Instagram platform Economikat and a CNBC employee

If you have extra savings, it’s a good time to invest that money in the stock market for the long term, says Katia Chesnok, founder of the personal finance blog and Instagram platform Economikat and a CNBC employee.

Everyone has different long-term investment goals. Maybe you focus on retirement or paying for your kids or college education Structure of a home down payment. The important thing is to develop a strategy that suits your risk tolerance, schedule, and investment goals, and stay on course, says Chesnok.

“I would not act every day now. I would only focus on longer term investments, ”says Chesnok. “Over time, compound interest will amortize your investment. In this way you increase your money. “

Spread your portfolio across a wide variety of assets to hedge your bets and increase the chances of higher returns over a long period of time. For example, index funds or target-date funds are a good place to start for most investors as they allow you to build a portfolio with broad exposure to many individual stocks and bonds.

You can tweak your asset allocation to suit your preferences and make adjustments over time, but it is wise to avoid knee-jerk reactions to market dips and election news. Historically, the stock market in general has trendingregardless of which party controls the White House or Congress.

Nikki Dunn: Expect more incentives, but put away extra money

Photo by Nikki Dunn, a certified financial planner who founded the online community She Talks Finance

Hopes for another round of COVID-19 aid have been resurrected since the Democrats’ victory. Many experts, including Nikki Dunn, a certified financial planner who founded the online community She Talks Finance, are awaiting another round of government aid.

President-elect Joe Biden has proposed a stimulus plan that includes funding direct stimulus payments, but Congress has not yet started that discussion. So rely on your own savings in the first place, says Dunn.

Whether and when a new stimulus check arrives, and what you should do with it, depends on your financial situation. First of all, you need to evaluate your budget. If you still have income and have covered your necessary expenses, but have not yet started building an emergency fund, stow away the extra money. A second stimulus check could also be a good opportunity to repay high-interest debt, if that’s your priority.

“I think the general perception is that with incentives, Biden will be more generous and (that) could help the House and Senate work a little bit more together,” says Dunn. “So we can get what everyone is hoping for, namely more money in our pockets, more money in our savings accounts, more money to pay off debts.”