4 Things the Middle Class Needs To Do Now To Thrive in the Trump Economy
Written by
Nicole Spector
Edited by
Zuri Anderson
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On the campaign trail in 2024, President Donald Trump made a number of promises to the middle class. He promised that, if elected president for a second term, he would ensure the end of inflation, slash energy and electricity bills, and put a temporary cap on credit card interest rates. Trump also promised cheaper groceries; the list goes on.
We’re not even 150 days into President Trump’s four-year term. It’s far too early to tell whether Trump will succeed in delivering on these promises in full. But at this moment, many middle-class Americans are concerned about life in the U.S. becoming even more expensive. Tariffs, for example, could cost American households $5,200 annually, according to the Center for American Progress.
Putting fear, doubt and even high hopes aside, we must ask: “What can the middle class do right now to thrive in the Trump economy?” Consider the following expert-provided moves to make.
Build an Emergency Fund
Sean Babin, certified financial planner (CFP), CEO and lead financial advisor at Babin Wealth Management, highlighted the many challenges staring down the middle class right now: Rising home prices, rising childcare costs, rising education costs, rising healthcare costs and rising food costs. It’s a lot to keep up with and can push you into high-interest debt if you’re not amply prepared.
Babin recommended having an emergency fund with at least three to six months’ of living expenses in it. If you can set more aside than that (in a HYSA), absolutely do that. Suze Orman champions an emergency fund that will float you for 12 months.
Seriously Cut Spending
After the worst of the pandemic passed, Babin noticed a type of spend-happy FOMO rage among the middle class.
“‘You only live once’ became a rallying cry across America,” Babin said. “After being locked down for over a year, people were eager to make up for lost time, traveling, dining out, splurging on experiences, and buying things they’d long postponed. This wave of so-called ‘revenge spending’ saw many consumers throwing caution to the wind, often spending beyond their means. From blueberries to plane tickets, demand soared, and so did prices. The prevailing mindset was: Put it on the credit card and deal with it later. But as the bills piled up, so did the debt and its consequences are now being felt.”
The middle class must reduce their spending if they want to survive these economic challenges. Chiefly, they must eliminate credit card debt.
In 2023, the average outstanding debt per cardholder in the U.S. was about $6,088 and the average interest rate on credit cards is 21.47%, according to TransUnion. And credit card debt delinquency has risen since then.
Have an Actionable Plan To Tackle Debt
So, while we all kinda, sorta know that credit card debt is not good, we don’t necessarily recognize how horrifically lethal it is.
Yes, to some extent, the middle class can’t be blamed for their credit card habit. We’re fed promotional bait from credit card companies day and night, and even if we’re pulling in six figures, we’re living paycheck to paycheck or close to it.
But we have to be real with ourselves. Putting food on the table is not the sole cause of credit card debt in the U.S; it’s also things like buying luxury goods and electronics.
“Carrying a balance on a credit card is a big no no that will keep you trapped in the middle class,” Babin said. “Have a plan to pay off high-interest rate debt as soon as possible. Might have to say no to some family vacations and nights out. It takes work to pay yourself first.”
Invest, Invest, Invest
You have to invest and you have to invest in a variety of assets.
“Stocks, real estate, gold, your own business,” said Joseph Camberato, CEO at National Business Capital. “The middle class often gets stuck trying to save their way to stability, but that’s not enough anymore. The wealthy get wealthier because their money is always working for them. They buy things that grow in value: Assets that rise when prices rise. Their money is working for them while they sleep. Investing becomes their second job and focus. That’s how they stay ahead of inflation. If you’re not investing, you’re falling behind.”
And remember, a tumultuous market is still a good one to invest in. Do your homework, stay calm and be in it for the long haul — and stop putting this off.
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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