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As Donald Trump takes the oath of office, Americans have mixed feelings about their personal financial outlook for the next four years.
A new survey by Experian finds 51 percent expect their personal financial status to improve during Trump’s term.
As you might expect, that result was heavily skewed by members of the new president’s party. Seventy percent of Republicans said their financial picture would improve, compared to just 36 percent of Democrats and 51 percent of Independents. That squares with a CreditCards.com survey conducted in December that showed Republicans and Independents getting more optimistic about paying off their debts than Democrats (though no group was pessimistic to begin with).
Even though most people surveyed seem to be in good financial spirits, 35 percent still said they would make drastic improvements over the next four years. Forty-three percent said they would get a better paying job, and the same percentage said they would increase their savings. Nearly 40 percent said they would decrease spending, and 31 percent said they would get an extra job or income source.
Relatively few people indicated they would change their credit card habits in the Trump era. Only a quarter said they would start using credit more responsibly, and 22 percent plan to pay off their credit cards on time. Of the 21 percent who said their personal financial status would decline, only 14 percent will take steps to improve their credit scores. Perhaps more encouragingly, only 6 percent of that group plan to rely more on credit.
The apparent lack of credit concern is not surprising in the context of the overall economy. Trump’s inauguration happens to coincide with a return to Recession-era levels of credit card debt, but consumers are now in a stronger position to manage their debt than when President Obama took over in 2009. Unemployment has remained at or below 5 percent for more than a year, and credit card delinquencies and household debt burdens are at historic lows.
Despite the positive outlook, Americans expect Trump’s policies to reward some economic classes more than others. A recent Monmouth University poll found that 55 percent believe wealthy families will benefit “a lot” under Trump, compared to 21 percent for poor families and 26 percent for the middle class.
An October analysis by the Tax Policy Center found that while Trump’s proposed tax cuts would increase after-tax incomes for people in all income groups, the highest earners would see much bigger increases. Trump has also proposed reducing corporate taxes and getting rid of the estate tax.
The results of the Experian and Monmouth surveys might be better explained by 2016 election narratives than what Trump may or may not do as president.
Republican voters are naturally pumped about their party retaking the White House after eight years of Democratic rule. Billionaire Trump will likely always be associated with business interests and the wealthy, despite his appeal among working-class voters who helped put him over the top in November.
Besides, the personal finance outlook will continue to depend on the nation’s economic health. If Americans stay employed, earn enough to make ends meet and use credit responsibly, there’s little reason to worry. But if the economy takes a turn – and some economists fear an eventual recession no matter what Trump does – consumers will need to adjust their credit habits in higher numbers than what was indicated in Experian’s survey.