In 2017, experts predict that the unemployment rate will rise — but not by much, according to WalletHub. They also predict that the stock market will continue its post-election tear, but begin to mellow out. And consumer credit card debt will likely hit an all-time high. Yada, yada, yada.
We know what you’re thinking: That’s all great, but how will my wallet be affected in the new year?
So glad you asked.
From cheaper groceries to lower taxes, Business Insider dove into five ways your personal finances could change in 2017.
1. Some things will get cheaper
As 2017 rolls in, you can expect prices to drop on everyday things like grocery staples and flights. According to the USDA Economic Research Service Food Price Outlook, beef and veal prices are predicted to fall 1% to 2% next year, and pork will fall up to 1%. Eggs will also become more affordable, with prices predicted to drop another 11% to 12% in 2017.
Both Delta and United announced lower-fare tiers this year, and American Airlines plans to debut a cheaper option soon as well. However, these economy prices also come with a slew of restrictions, from a carry-on ban to restricted use of overhead bins.
Plus, as DealNews points out, prices for everything from avocados to hybrid cars are expected to drop as well.
2. But others will be more expensive
Not everything will be easier on your wallet in the new year. While you’re enjoying bacon and eggs at a lower price, don’t expect to round out your breakfast with discounted cheese or fruit. Dairy prices are predicted to rise between 1.5% and 2.5% in 2017, with fresh fruit increasing 1% to 2%, according to the USDA.
If you’re planning to buy a home, 2017 might not be the best year. CoreLogic reports that home prices are expected to rise 5.4% by July. Renters aren’t safe either, as Kiplinger’s inflation forecast predicts that the cost of keep a roof over your head will rise another 3.6% next year.
3. Taxes will probably be lower
We won’t know for sure what’s in store until Trump officially becomes president, but if Congress sticks to the president-elect’s proposed changes, nearly every taxpayer would be affected. As outlined during his campaign, Trump’s tax plan will condense seven tax brackets down to three, increase standard deduction amounts, eliminate personal exemptions, eliminate the alternative minimum tax, and eliminate head-of-household filing status.
NerdWallet’s Tina Orem breaks down what that means:
“Generally, most filers could move to a lower tax bracket. Those making $18,550 or less could move from the 10% to 12% bracket, though the Trump campaign says low-income Americans will have an effective income tax rate of 0% …
“Also, the decision to itemize or take the standard deduction could get less tricky for some people, and people with lots of itemized deductions could have to reckon with the proposed cap. Single parents should keep an eye on the elimination of the head-of-household status. Couples filing jointly and making less than $311,300 could lose the personal exemption, though the overall shift to a lower tax bracket may (or may not) make up for the loss.”
4. Income-driven repayment options for student loans will change
“Expansion of income-based repayment has been the central tenant of President-elect Trump’s student debt plan,” writes Mike Cagney, CEO of financial services company SoFi, in an article for Business Insider.
“As outlined, his plan would expand the existing program by capping repayment at 12.5% of discretionary income and forgiving any remaining balance after 15 years.”
By contrast, the current program caps monthly payments at 10% and forgives outstanding undergraduate debt after 20 years.
Throughout his campaign, Trump also alluded to removing the federal government’s involvement in student loans, favouring full privatization instead. While Cagney doubts this reality will come to pass, he says it’s likely that the Graduate PLUS program, which provides federal loans to graduate students, will be cut.
5. Gas prices might go up — but not by much
The price of oil may rise, but many experts believe it won’t change significantly. Gasoline prices are predicted to average $2.14 per gallon for 2016 and $2.30 per gallon in 2017, according to the US Energy Information Administration — not too stark of a difference.
“The price of oil should rise, but not tremendously despite the recent OPEC agreement,” Bill LaFayette, an economic adviser and owner of Regionomics, told WalletHub. “International economies are still weak and sticking to agreed-upon production targets has been historically quite difficult for the cartel.”
Other experts agreed. “We expect oil prices to stay low for the near future, or rise only modestly,” Bruce E. Hansen, the chair of economics at the University of Wisconsin at Madison, told WalletHub.
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