With the election just a few days away, Americans are scrambling to prepare their finances in case their preferred candidate doesn’t come out on top.
President Donald Trump and former Vice President Joe Biden hold radically different views on everything from taxes to health care, meaning the winner could mean serious repercussions for you.
A recent study by The Ascent found 43% of Americans are reworking their saving, spending or investing strategies to prepare for the outcome. The trend transcends party lines: 44% of those bracing their finances say they’re likely to vote for Biden, and 45% are likely to vote for Trump.
If you haven’t started making preparations yet, it’s not too late to get the ball rolling. Here are the most common ways to financially gear up for Nov. 3.
Increase savings
Boosting the family bank account is the single most popular way to prepare for the election. About 26% of respondents in The Ascent’s survey are setting more money aside, while 22% are specifically padding their emergency funds.
The economy is still stumbling, with a third wave of the pandemic hampering efforts to reopen businesses. Trump and Biden don’t agree on how well the country’s recovery is going, and voters may be afraid that one strategy or the other will make matters worse.
Most financial experts recommend keeping enough money on hand to cover at least six months of your normal expenses — things like rent, utilities, gas and groceries.
If you’re thinking about increasing your savings, it’s worth your while to shop around for a high-yield account to keep it in.
High-yield savings accounts can earn you more than 100 times the interest you’d make by leaving your money in a traditional savings or checking account. The higher your interest rate, the faster your savings will grow.
Cut down on spending
The second most common tactic goes hand-in-hand with the first. Roughly 25% of those surveyed said they’re spending less in the leadup to the election.
While cutting down on your daily purchases can help, it’s equally important to reassess your automatic spending. A 2019 study showed that the vast majority of consumers underestimate how much they’re blowing on subscriptions, often spending twice as much as they thought.
You can use a free app called Truebill to track and cancel any subscriptions you’re using — including ones you’ve forgotten about or didn’t know you signed up for. It’ll also inform you anytime one of your subscriptions goes up in price.
Next, see whether you can save money by getting a better rate on your essential expenses, like car insurance.
Websites will let you compare rates from multiple insurers for free, and the process takes only a few minutes.
You may be able to find the exact same coverage you currently have at a much lower price, potentially saving yourself up to $1,100 a year.
Pay off debt
Just over 15% of Americans are making an effort to pay off their existing loans and debts before the election, according to The Ascent.
High-interest debts like credit cards will sap your finances month after month, making it hard to stay nimble and adjust to whatever the new reality is after Nov. 3. It makes sense to clear out as much of your debt as possible while you can.
If your credit score is in decent shape, you might want to consider consolidating your debts with a personal loan.
A good debt consolidation loan will let you trade in all of your outstanding debts for a single loan at a much lower interest rate.
You’ll only have one monthly payment to worry about, and depending on how much interest you currently pay, you could save hundreds (or thousands) of dollars and become debt-free years sooner.
Revise investment strategies
Close to 10% of Americans are changing up their investments as they keep an eye on the presidency. The year 2020 has been a particularly volatile one for investors, and the results on Nov. 3 will likely be another jolt to the market.
If you’re worried your portfolio may take a hit, or you’re unsure how to proceed in such an unstable market, you might want to think about using an automated service, or robo-advisor, to manage your investments.
No matter what happens on or after election day, you can feel confident that your portfolio will move in the right direction.
If you’re a more adventurous investor and you’re simply looking to diversify your current holdings, another option is to use a popular commission-free investing app.
The ability to trade without fees is great, but another welcome feature is the ability to buy fractional shares. You can own pieces of huge companies like Amazon without having to spend thousands.
Do a mortgage refinance
More than 6% of Americans are refinancing their mortgage ahead of the election, which makes a lot of sense if you’re looking to free up cash for an uncertain future.
Mortgage rates remain at historic lows in the wake of the pandemic, and if you’re a homeowner refinancing could save you tens of thousands in interest over the course of your loan.
You’re a good candidate for refinancing if you’ve got a solid credit score and at least 20% home equity.
It’s wise to act soon if you’re planning to refinance, as a new 0.5% fee on refis will come into effect on Dec. 1.
Don’t just jump at the first offer you see, though. A Freddie Mac study found that comparing rates from at least five lenders can make a $3,000 difference in how much you save over time.
Buy or sell a home
These record-low mortgage rates are also ideal for anyone looking to upgrade (or downsize). The Ascent found that more than 4% of Americans are preparing for the election by buying or selling a home.
Although Biden has stated that he’ll institute a homebuyer tax credit if he’s elected, you might not want to wait until January to start shopping around. Rock-bottom rates won’t stick around forever, and it might be a good idea to make a big purchase while conditions are known to be good.
As with refinancing, you’ll want to shop around and compare quotes from multiple lenders before you commit to a new mortgage.
If you find that you’re having trouble getting approved for a mortgage, check out this guide on how to improve your chances.
