Experts: 5 Money Moves You Should Make in an Election Year
Written by
Angela Mae
Edited by
Amber Barkley
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With election year comes some major changes to the political and financial landscape. But it’s also a good time to make some strategic money moves.
If you’re not sure which money moves to make, you’re in the right place. GOBankingRates compiled the best election-year money advice from known experts Suze Orman and Dave Ramsey. Here are their top tips, many of which apply even beyond election years like this one.
Invest Before Election Day
In a recent video, “Why You Should Invest TODAY,” Ramsey said he’s not waiting for either Donald Trump or Joe Biden to decide what he should do. He’s all about investing now rather than later, and he advised his viewers to do the same.
Ramsey went into detail about the stock market and how — as of January 2024 — it had the potential to reach an all-time high. Citing historic and recent data, he indicated how now could be a good time to invest in stocks.
If you have some money you’ve been sitting on, he also suggested buying a mutual fund sooner than later. But don’t stop at mutual funds. According to Ramsey, real estate could be another good investment to consider.
Purchase Certificates of Deposit (CDs)
Earlier this year, Suze Orman published an article called “Locking In a Guaranteed High Return.” In that article, she went into detail about purchasing CDs — and why you should do it right now.
“Right now, the smartest move you can make is to lock in a safe return of 5% or more for the next year to 18 months,” Orman wrote. “And I mean right now! If you wait or file this away as something you’ll get to when you have the time, you’ll miss the chance to get paid a guaranteed 5%.”
Orman suggested buying CDs because they tend to react to the Federal Funds rate, which has increased over the past two years. The Fed, however, has been talking about cutting this rate. If this happens, it could result in lower yields. But by getting a CD right now, you can lock in the higher rate — regardless of changes to the system.
Don’t Time the Market
Election year might have a short-term effect on your investment portfolio — from stocks to 401(k)s — but its long-term impact is negligible. No matter what year it is, experts everywhere advise against trying to time the market.
In his article, “How to Avoid Costly Mistakes When the Market Is Down,” Ramsey discussed the folly of trying to time the market. If you’re trying to build wealth or plan for retirement, stick with your investments for the long haul.
“Remember, retirement investing is a marathon, not a sprint,” he wrote. “You need to approach it as a long-term process. … Don’t focus on day-to-day or month-to-month losses. Take a step back and look at the big picture. Hang on to your mutual funds through rough markets. When they rebound, you’ll be glad you did.”
Use Your Tax Refund Wisely
While you’ve probably already received your tax refund this year, you’re in luck if you haven’t spent it.
Election year or not, according to Suze Orman, your best bet is to make a plan for your refund that minimizes your financial stress. Whether the goal is to pay down credit card debt, build an emergency fund or cover necessary bills, be as specific as possible.
Buy a Home
In an article called “12 Things to Do Differently With Your Money in 2024,” Ramsey advised purchasing a home now rather than waiting for housing prices or interest rates to possibly drop later.
That said, Ramsey recommends ensuring you’re financially prepared to buy a home. This means building up an emergency fund and, ideally, avoiding other debts. He also recommended having a 20% down payment to avoid private mortgage insurance. If you’re a first-time buyer, he suggested having 5% to 10% down instead.
On the affordability front, Ramsey advised ensuring that no more than 25% of your monthly income goes toward your mortgage. If your income isn’t quite there yet, or if you’re struggling with the down payment, now’s a good time to find ways to improve your financial situation — whether that means taking on a side gig or asking for a pay raise.
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