4 Changes You Should Make to Your Spending Under the Trump Administration Tobi Opeyemi AmureJuly 17, 2025 at 12:05 AM Allison Robbert / Pool via CNP / SplashNews.com / Allison Robbert / Pool via CNP / SplashNews.
- - - 4 Changes You Should Make to Your Spending Under the Trump Administration
Tobi Opeyemi AmureJuly 17, 2025 at 12:05 AM
Allison Robbert / Pool via CNP / SplashNews.com / Allison Robbert / Pool via CNP / SplashNews.com
Americans may have hoped policies introduced by President Trump and his White House administration would help their spending, but now economic uncertainty, rumored recession and tariffs at the grocery store loom around every corner. With the "One Big Beautiful Bill Act" (OBBBA) passed and looking to take effect no later than Dec. 31, 2026, financial experts advise folks to recalculate their spending patterns to meet new financial necessities.
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Here are four expert-backed adjustments to consider, because the financial landscape is constantly changing amid Trump's proposed policies — including everything from tax reforms to funding cuts for food assistance programs, national weather services and Medicaid.
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Prepare for Inflation and Economic Uncertainty
Trump's controversial policies have caused Federal Reserve officials to express concern with regard to their potential inflationary implications. The tariffs that Trump imposed on Chinese goods that average over 30% — and the 10% to 20% tariffs on the goods of all countries — could push up the prices of everyday goods, for example.
"When dealing with uncertainty, preparation is key," said Ashley Morgan, a debt and bankruptcy attorney in northern Virginia and founder of Ashley F. Morgan Law.
Your best defense against any increase in costs or changes to the economy is to ensure you are cutting your costs where possible and saving money. Start finding domestic replacements for your regular purchases to avoid any possible price hikes.
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Boost Your Emergency Fund
Given the economic volatility on the horizon, it's more important than ever to have a robust safety net in place. Financial experts advise saving three to six months of expenses, but in an uncertain economy, you may want to save more.
"The higher you are, the more worried you are, and the higher your emergency fund needs to be," Morgan said.
Cutting non-essential spending allows you to start building an emergency fund immediately. Look at your recurring bills, such as phone plans, cable packages, web services and subscriptions. Find better rates or cheaper alternatives to your service providers, and call them to negotiate.
Small savings accumulate over time and could be essential to cover a shortfall in income when economic conditions are less favorable.
Reassess Your Tax Strategy
Trump's return to office is expected to bring big changes to tax codes. The administration will also likely focus on extending the Tax Cuts and Jobs Act (TCJA) long before the key provisions expire at the end of 2025. New proposals include a cessation of taxation on Social Security benefits, tipped income and overtime pay.
The estate and gift tax exemption amount has been raised to $15 million per individual for 2026 and later years. The OBBBA made the increase in the estate and gift tax exemption amount permanent, preventing the automatic decrease that was scheduled to occur after 2025 under the Tax Cuts and Jobs Act (TCJA). This new $15 million exemption will continue to be indexed for inflation in the future, using 2025 as the base year for adjustments.
According to the Penn Wharton Budget Model, by 2026, the lowest earners would earn an extra $320 annually, and the wealthiest 1% of the population would earn about $376,910 more each year. Given these potential changes, it's time to reexamine your tax strategy. For pass-through business owners, think ahead to 2026 instead of 2025, when the qualified business deduction sunsets.
Reevaluate Your Investment Portfolio
The stock market experienced a strong rally throughout much of last year, fueled by hopes of more aggressive rate cuts from the Fed. However, recent declines have occurred as bond yields have risen, and inflation concerns resurface. It's also important to note that the annual inflation rate in the United States edged up to 2.4% in May 2025, a slight increase from the previous month's 2.3%, according to the Bureau of Labor Statistics' Consumer Price Index (CPI).
Given this outlook, it's wise to review your investment portfolio. Consider diversifying your holdings to mitigate risk. Look into sectors that might benefit from Trump's policies, such as domestic manufacturing and energy, while being cautious about industries that potential trade disputes or immigration crackdowns could negatively impact.
Caitlyn Moorhead contributed to the reporting for this article.
Editor's note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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