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February 14, 2017

5 Ways the Trump Presidency May Affect Your Family’s Finances

No matter who you voted for back in November, everyone would agree that a new era in American politics and policy is here. With Donald Trump heading the country and a Congress controlled solely by Republicans, expect to see big changes in law making. Despite Trump and his team warning the public about sweeping changes that are coming, for most middle-class American families, it’s safe to say that their lifestyle may not be dramatically different under the Trump administration. Based on some of his campaign promises, you can expect to see some of these differences for your family’s finances.

1. Tax Savings on Childcare 

One of the more popular proposals that Trump may implement during his first few weeks in office is a series of tax credits for families who need childcare. Currently, families are able to claim tax credits for childcare expenses. Trump wants to expand these credits and give Americans the ability to create a childcare savings account that additionally reduces your tax responsibility.

2. Higher Interest Rates 

Another possible scenario with Trump as president is that lending interest rates may start to rise. Ever since the housing market crash of 2008 and the recession that followed, interest rates for mortgages and other loans have been attractively low to entice more borrowing and a healthier economy. Now that jobs are starting to return in larger numbers and the real estate industry has bounced back, the interest rates may start to go up again, costing borrowers much more.

3. More Affordable College 

There’s no doubt about it. College tuition costs have skyrocketed in the past few decades, making higher education unattainable for many. Many professionals of today are burdened by heavy student loan debt, and the problem may not get better. While on the campaign trail, Trump outlined a plan to help reduce the impact that hefty student loans have on people, which would give them relief after making regular payments for 15 years.

4. Looser Lending 

 Another possibility with the new era of Donald Trump is looser lending regulations. Trump may decide to pursue abolishing banking regulations put in place by President Obama. Eliminating federal financial regulatory guidelines may open the banking industry up to its former unregulated windfall. This may mean consumers could have an easier time of obtaining loans, like mortgages and car loans. The process of buying a new car may be as simple as picking an attractive loan, consulting local insurance agents, and driving off the lot that day.

5. More Medical Costs 

One problem that could be a result of a Republican majority and a Republican president is the repeal of the Affordable Care Act. For some families, this may mean an increase in medical costs. Those who receive insurance from the health care marketplace may have to scramble to find adequate health insurance. Many predict that Congress could eliminate clauses that protect against lifetime coverage caps, making a serious illness a financial worry for some families.

Now that a new administration is taking office in the nation’s capital, it’s important to see how your family’s finances could be impacted. Many average American families may not see too many big changes at first, but it’s not as clear what could happen later down the road.

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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