The Debt Ceiling Debacle
Posted on May 26, 2023
As Washington argues over who will be responsible if no resolution to the debt ceiling is reached by the end of the month, main street Americans are more concerned about what to do and how to protect their hard-earned money. While both sides indicated they were close to a deal on Thursday, May 25th, no official agreement was made before legislative members began leaving Washington on Friday for the Memorial Day weekend.
The debt limit has been raised 78 times since 1960, including 20 times since 2001. So while it’s a foregone conclusion that a deal will be reached, the question is when that will happen. Experts warn that without a resolution to the debt ceiling, the United States could default on its debt as early as June 1st. And historically, the US has never defaulted on their debt, so the effects of a default are yet to be determined.
Here are some things to consider, however, if that occurs:
- Be prepared. Know what your cashflow is so that you can stick to your budget and eliminate superfluous spending. Put more into savings if possible. If a national debt default occurs, interest rates will likely go up. If you are carrying credit card debt, now is a good time to reduce that as much as possible.
- Stay the course. While there may be some short-term volatility, plan for the long-term. Acting on emotions is one of the worst ways to handle your finances. Historically, markets have come back – and in significant ways – after major declines.
As your trusted advisor, Larson is here to guide you through uncertainty.
This is why we focus on holistic financial planning, so that we can help you implement a plan that is custom-tailored to your risk tolerances and personal goals. Our advisors work with you to develop a diversified portfolio with protections in place to help guard your wealth. We want you to rest assured knowing that your personal plan is working as intended when unpredictable circumstances arise.
But if you do have any doubts about your financial security, or you want to double-check that you are still on track to achieve your goals, reach out to your advisor to discuss your concerns as soon as possible.