Impact of the Trump Administration on Your Finances

It’s been a hell of a ride the first 24 hours of the Trump Administration. With the Executive Orders signed by President Trump, this continues to result, as I have stated before, in chaos which creates political instability, which in turn creates financial instability, affecting your pocket at the end of the day.

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Day One of the President Trump Administration

In President Trump’s first 24 hours, via Executive Orders, the United States withdrew from the World Health Organization, promised a 25% tariff on Mexico and Canada, and stopped all foreign aid. How does this affect you financially?

Everything I’ve been saying for a while now, there is a snowball effect to consider, meaning the financial chaos will likely affect you one way or another. For example, immigration raids are supposed to take place this week on a massive scale, starting with Chicago. How would that affect you as a business owner or maybe where you are employed?

• Your Debt-Free Journey Takes Time

If someone is picked up in an immigration raid or has to leave the country, you’ll have one less customer. Even if you don’t have customers in that position, your current customer might be in a relationship with someone who is. If that person has to leave the country or has been picked up, they might have to spend money on attorney fees, leaving less money available for your product or service. Those financial issues go down the line from housing to utility bills, meaning less money enters the household while bills continue to pile up.

It’s all tied together somehow, the snowball effect. We cannot hide from this reality, and the examples are endless, but the result isn’t.

The Trump Tariff- Not Yet

Regardless of how President Trump phrases it, tariffs are taxes passed on to consumers. This will affect you somehow, whether it means reducing expenses or increasing your income. Otherwise, your debt total will increase.

For example, even though Hurricane Helene hit in mid-September, an auto body shop couldn’t accept my wife’s car until the first week of January. After two weeks, the insurance company confirmed the car would be a total loss. So now, car shopping begins, which I do not desire to do because this means more debt.

When I received the call from the insurance company, I was leaving for the golf course. I told my wife we could discuss this later. I’m going to my safe place, where I like to relax and forget about everything. I had to take that approach because, in reviewing my finances, I calculated that getting rid of the car loan in a couple of years would free up money to pay down the principal on my mortgage or invest in a retirement account. Now, I’m getting into more debt and extending the time I will remain in debt. This goes against everything I planned for, so I wasn’t in the mood to think about it.

But I don’t have a choice. I do have to face this issue. Luckily, there is some equity in the car, approximately $5,500, so that will help pay down the new car loan. But thinking about the Trump Tax came at the wrong time.

I was on hole #3, and in the middle of my backswing, I started thinking about how the Trump tariffs would affect my car purchase. As you can imagine, it was a horrible shot. I admit to taking a mulligan. But I asked myself, “When do these tariffs take effect?” Because that will be the question, many of you are asking yourselves.

President Trump said the tariffs will likely begin on February 1st at a press conference in the Oval Office. He stated that the tax might be 25%. So, does that mean the tariffs will affect you starting February 1st? Not necessarily. But let’s do some quick math to show the effect this has.

Now that I’m stuck getting another car, the same car would cost me $4,000 more with a Trump tax. There’s nothing different about the vehicle. No new upgrades, just $4,000 on a $20,000 purchase. That’s how you get into more debt and did nothing different or wrong, for that matter.

Without calculating interest over time, purchasing this car will result in increasing my debt by approximately $7,000 to $8,000. This will also affect my credit score. If the Trump Tariffs were in effect now, that’s $11,000 more than I got into debt overnight. That’s why many people are buying cars or specific products, such as washing machines and electronics, out of fear that the tariffs will increase the overall price.

As I told my wife, the car we will buy is already here, so the import tax won’t apply. The car that might be affected is still in the beginning stages of being built and won’t be built for several months. When that car finally makes it to the US, it gets taxed and guess who is paying for that tax?

So likewise, if you go to Walmart right now and buy a big-screen TV, you won’t feel the effects. But once imported into the United States, you will feel the financial pinch. Maybe even a financial punch. So keep that in mind. The products already here won’t be taxed; only those imported after the Executive Order takes place.

This means if there is going to be a significant purchase coming up, then maybe now is the time to go ahead and buy that product. But that has to be compared to other household expenses that will likely increase. So, your game plan should factor that in as well, especially as it relates to long-term debt.

Because of my situation, I realize the luck factor. The hurricane was in September of 2024. Instead, if Hurricane Helene happened in September of this year, a new car purchase would most likely have been subject to the Trump tariffs. The workaround would be to buy a used car to avoid the tax. That’s assuming we can call getting into more debt lucky. But it just goes to show how quickly finances can change, and we need to be prepared as best as possible.

Now, I’ve written about liberal preppers buying certain products to avoid the Trump tax. However, what can be afforded now may not be affordable tomorrow. You need to give yourself a financial audit. If medications, the cost of living, and student loans go up, can you still go forward with that purchase? Only you know and are in a position to make that decision.

• I Guess We Are Liberal Preppers?

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