The Trump Economy Begins: 4 Money Moves Gen Z Should Make Before Inauguration Day
Written by
Kerra Bolton
Edited by
Zuri Anderson
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President-Elect Donald Trump’s upcoming second term raises critical questions about the impact of his economic policies on Gen Z — the youngest generation in the U.S. workforce.
“Gen Z should watch for shifts in monetary policy, such as changes to interest rates, which could impact student loans, credit cards and mortgages,” said Jennifer Borrero, a global ambassador for the United Nations Association and the Founder of the Youth Housing Coalition.
“A new administration might also bring changes to tax policies, energy subsidies or employment initiatives — all of which could directly affect disposable income and job opportunities,” Borrero said.
As the Trump economy begins, here are four money moves Gen Z should make before Inauguration Day.
Build an Emergency Fund
Building an emergency fund is important, regardless of generation. However, Gen Z grew up witnessing the economic disruptions of the 2008 financial crisis and the global pandemic.
“For short-term savings goals, everyone in Gen Z should aim to save an emergency fund,” said Benjamin Njila Fields, author of “Understanding Credit and Finances: How to Improve Your Credit Score.”“This provides the backbone of a proper financial plan that will make sure you never have to go into high-interest debt if an emergency comes up.”
Gen Zers might also need the extra cash if Trump’s tax cuts for corporations and high-income individuals result in cuts to social safety nets or public services.
“This may disproportionately affect younger generations who rely on government programs like student loan forgiveness or healthcare assistance,” said Christopher Stroup, founder and president of Silicon Beach Financial.
“If tax policy shifts to reduce deductions, credits, or increase tax rates on middle-income earners, Gen Z might face higher tax burdens, leaving less disposable income to put toward savings or investments.”
Upskill
Many Gen Zers are entering a gig economy or working in roles with less job security, making it more difficult to have a steady income. These conditions could grow even more acute during a second Trump administration if he follows through on his campaign promises to deregulate businesses.
Learning new technology skills or enhancing existing ones will be critical for Gen Zers to compete in the Trump economy, especially as freelancers. According to a Fiverr global study of Gen Zers, 70% of respondents said they are currently freelancing or plan to in the future.
“With shifts in employment rates, Gen Zers should continue to upskill, especially in the use of AI,” said Emily Luk, CEO and co-founder of Plenty, a money management tool to help couples build wealth together. “This will be important to be an attractive candidate.”
Prioritize Tax-Advantage Retirement Accounts
Social Security’s fate is uncertain, especially for the Gen Z generation, people born between 1997 and 2012.
The federal program will face a shortfall in 2034 if Congress and the President don’t act. While President-elect Trump said he would protect Social Security, that doesn’t mean the program will be available when Gen Zers reach retirement age.
According to an analysis by the nonpartisan watchdog Committee for a Responsible Federal Budget, Trump’s proposals to cut taxes and increase tariffs could mean less money for Social Security in the future.
“Young investors should prioritize investing in tax-advantaged retirement accounts including Roth IRAs, health savings accounts (HSAs) and Roth 401Ks,” Fields said. “If you start in your late teens and early 20s, the amount of compound growth you will receive is astronomical.”
For example, Fields said that by contributing the maximum to a Roth IRA ($7,000 per year) and investing in the S&P 500 from ages 20 to 25, the compound growth alone leads to over $1,000,000 in retirement (age 65), even if you never invested another dollar.
Consider Fractional Real Estate
Alex Blackwood, CEO and co-founder of mogul Club, said his company allows Gen Zers to purchase shares in “high-quality, income-generating properties at little costs.”
“It removes the traditional barriers of large down payments and full property ownership, making it an attractive move for young investors,” Blackwood said. “Starting small and diversifying through fractional investments can help young investors steadily build their portfolios, benefit from property appreciation and generate passive income.”
Editor’s note on election 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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