The Trump Tariff Plan, Tax Reform, and More: How It Will Affect Your Finances

President Trump wasted no time moving on his agenda. Within hours of taking the oath, the reinstated commander-in-chief signed a laundry list of executive actions on immigration, tariffs, national security, and energy policy.

While some of these actions don’t affect Americans’ daily lives (like renaming the Gulf of Mexico to the Gulf of America), a few will likely impact consumers’ wallets. From firing the head of the Consumer Financial Protection Bureau to potentially tacking on tariffs, Americans may start feeling the sting of the new administration’s objectives.

Here’s what you need to know about the first few weeks of the Trump administration’s results, what’s to come, and how you can financially plan ahead.

Tax Reform

Trump has come forward with several tax changes. Here are a few that may change:

• Mortgage interest deduction: Homeowners have long enjoyed deducting the interest they pay on their mortgage. This could potentially be going away.
• Child and Dependent Care tax credit: This credit helps families with young children pay for up to $2,100 in annual childcare expenses.
  Student loan interest deduction: President Trump could potentially do away with this, giving borrowers the ability to write off $2,500 per year in interest.
• Cuts to education tax breaks: Proposals exist to eliminate the student loan interest deduction, the Lifetime Learning Credit, the American Opportunity tax credit, and even potentially tax grants and scholarships.

Trump Tariff Plan

Trump has acknowledged that tariffs could cause “some temporary, short-term disruption.” While the exact scope and countries that may face tariffs change regularly, the takeaway is that this will likely only hurt consumers.

The U.S. Chamber of Commerce warned in a statement that the tariffs “will only raise prices for American families and upend supply chains.” Additionally, the Tax Foundation estimates that tariffs would cost the average household $830 per year.

The situation continues to change rapidly, so be sure to follow the news cycle to get the latest.

Student Debt

The United States has many financial blemishes on its books, but none more shocking than the over $1.7 trillion in student debt owned by over 42 million Americans.

As Trump weighs the options for this significant debt, experts say he should eliminate any assistance outside of IDR (income-driven repayment). Moreover, he has even hinted at eliminating the Department of Education, which currently oversees public student loans.

If you currently have student loans, you may want to consider refinancing them for a better rate.

Pro tip: I refinanced my student loans several times, and was able to pay off my $80,000 in student loans in 7 years.

How You Can Take Charge

The first step in these significant changes is to know that despite so much that is out of your control, you still have control over your finances.

Here’s what you can do today to get ahead.

Consolidate Debt

Interest rates are now stabilizing after the Federal Reserve dropped rates in 2024 after its battle with record-high inflation. This means that you could potentially find a competitive interest rate on a personal loan.

You can use a personal loan to help consolidate any high-interest debt from credit cards or high-rate car loans.

Cut Back On Unnecessary Expenses

It’s advice no one wants to hear, but potential policy changes affecting your wallet could be a great time to cut back on unnecessary spending.
It could be helpful to look into using a budgeting app to get started.

Consider Job Hopping

Cutting back on expenses is always a good idea, but there’s only so much you can cut from. However, you can make an unlimited amount of money.

If you haven’t asked for a raise or moved companies in the last few years, now would be a great time to do so. Unemployment continues to be quite low, and studies show that job hopping is an effective way to quickly jump your income.

Bottom Line

A new President more times than not brings significant changes to the larger economic picture of the U.S., and can impact your wallet. However, what’s more important is that you have more control over your financial situation than you may know.