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President Trump's executive orders, a supersaver car habit: What today's news means for your money

Executive orders from President Trump on unemployment and payroll taxes, and auto payment tips from supersavers. Here's news that can impact your finances.

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U.S. President Donald Trump points to a reporter as he holds a news conference at his golf resort in Bedminster, New Jersey, August 7, 2020.
Joshua Roberts | Reuters

The four executive orders President Trump issued over the weekend are making news today. Here are some of the ways they, and other headlines, could affect your money:

Trump takes executive action on unemployment

One of President Trump's executive orders would temporarily extend the enhanced unemployment benefits that expired at the end of July. Under the CARES Act, Americans were eligible to receive an extra $600 per week. Trump's order reduces that to $300 per week from the federal government, plus up to another $100 from the state

But don't factor that money into your budget just yet: Experts expect the executive orders to face legal challenges. It's also unclear whether states, whose economies have also been hard-hit under the pandemic, can afford to fund their portion.

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What happens after enhanced unemployment benefits run out?

Video by Stephen Parkhurst

Possible payroll tax changes

As part of the executive orders, Trump plans to suspend the collection of payroll (or FICA) taxes through the end of the year for workers earning under $100,000 a year. This could put some money back in your paycheck in the short term if implemented, but it's not a done deal.

A supersaver money move: Drive older cars 

Thanks to high-quality vehicles that stay drivable longer, 25% of cars on the road today are at least 16 years old, according to IHS Markit. Hanging on to your car can also be a smart money move: Forty-eight percent of retirement supersavers drive an old car to free up cash, Principal Financial Group found.

The average monthly payment is $569 for a new car and $397 for a used car, according to Experian. Drive your current vehicle for five more years to avoid taking on a new auto loan, and that's up to $34,140 to invest for goals like retirement. 

VIDEO4:5704:57
How to avoid common auto loan mistakes

Video by Jason Armesto

Words you've heard: FICA taxes

Employers withhold FICA taxes, which are named after the law that mandated them, the Federal Insurance Contributions Act, to help fund social programs. They include a 12.4% Social Security tax and a 2.9% Medicare tax. Typically, you pay half (7.65%) and your employer covers the other half.

Although the daily news can have an impact on your wallet, remember to take a long-term outlook when it comes to decisions on spending, saving, and investing.

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