President Donald Trump’s 2020 budget plan recently came under scrutiny as the financial woes of the public become more real for those in the middle and lower income brackets. Senate Budget Committee Chairman Mike Enzi (R-WY) highlighted the importance of taking note of the U.S. debts and deficits, as the brunt will be borne by those who can hardly afford the added burden. For Enzi, the poor and middle classes have to carry higher income groups through the tumult, a move referred to as a Reversed Robin Hood. According to Enzi, they’re in a credit card Congress, which is reflected in the way the American consumer responds to pressure as well: more debt. For the consumer, it’s critical to take their finances into their own hands to ensure that the pressure from a government level doesn’t cause a crippling financial effect.
Government at the Heart of the Tumult
Government shutdown illustrates just one of the ways the public have had to make ends meet without relying on the government to pull them through.
Those who have relied on government before to get through their financial woes have had to deal with the repercussions. Government shutdown illustrates just one of the ways the public have had to make ends meet without relying on the government to pull them through. While banks and other financial institutions made special arrangements on behalf of their clients, this still came at a cost, and the after-effects will be felt well into the future. While the blame game is still being played, those affected by this callous decision still need to deal with their daily responsibilities. For government employees, the need for emergency savings and accessible credit has become abundantly clear.
Use the Government Products for Relief
Building up savings to withstand financial storms is not always an easy thing to do, especially when the proceeds of interest is heavily taxed. For those looking to build up wealth, there are a number of initiatives to help them along their journey, whether they’re looking for long-term or short-term options. IRAs, 529 plans, and even education plans provide some tax relief, as long as the conditions of the product are met.
A Possible Slow-Down in Household Debt?
Whether it’s fear of the future amidst fierce political tension as deficits are discussed or merely a more frugal approach to the future, U.S. household debt experienced a slowdown in 2018 with growth recorded at 3%, compared to the previous year’s 4.5%. For households, getting out of debt is possibly one of the biggest financial concerns. Student loans and credit cards seem to be the biggest culprits of unsecured debt.
While government debt is a concern, households can take the initiative to prepare themselves for the repercussions by keeping their own finances in check and utilizing relief where it is available.