The American midterm elections of 2026 are set to be an extraordinarily consequential moment in American history.
While midterm elections don’t dominate news cycles as presidential elections do, James Christopher, founder and managing director of political strategy and public relations firm James Christopher Communications LLC, made clear to GOBankingRates that midterm elections can have a powerful impact on the average American’s budget.
“Midterm elections can affect the average American’s wallet less through immediate policy changes,” Christopher said, “and more through uncertainty.” Regardless of who wins in November, their victories could create potential risks for Americans.
1. Cost of Living and Inflation Risks
According to Christopher, midterms can move the cost of living because businesses re-price goods based on what they assume election winners’ policies will be. “Families feel that first in essentials like groceries, utilities and insurance,” he explained.
To hedge against this, voters should begin an emergency fund, monitor and trim discretionary spending, and compare costs (in terms of groceries, bills and housing) to find savings.
Read More: 4 Everyday Expenses Trump Promised To Lower — Here’s What They Cost Now
Find Out: How Middle-Class Earners Are Quietly Becoming Millionaires — and How You Can, Too
2. Taxes and Benefits Uncertainty
“A big wallet risk is not a new tax law overnight,” Christopher said, but instead the “uncertainty about what expires, what gets extended and what changes.” As an example, changes in congressional control (say, from the Republican Party to the Democrats) can alter the likelihood of extended tax provisions, thereby altering tax burdens or credits that directly impact the take-home pay and net income of the average American.
Talking to a tax advisor about possible future changes, and maximizing contributions to tax-advantaged accounts like IRAs or a 401(k), can help protect against potential losses.
3. Borrowing Costs
As Christopher put it, “The average household doesn’t need a policy memo to feel election risk. If rates move, it shows up in mortgage quotes, car payments and credit card interest within weeks.”
To protect against that, Americans could lock in lower long-term rates for major purchases and pay down high-interest debt wherever and whenever possible.
4. Retirement Accounts and Market Swings
“Election seasons tend to bring more volatility, and that hits retirement accounts in real time,” Christopher said. “Even when day to day life is stable, a choppier market can change how people spend and save.”
Protecting one’s own retirement portfolio during such unpredictable political moments requires holding a diversified portfolio, avoiding panic-selling during volatility and ensuring investment strategies align with risk tolerance (and risk affordability).
5. Trade, Tariffs and Consumer Prices
Tariffs have been a core aspect of President Trump’s second term. Additionally, Christopher noted that “trade policy matters to the average American because it can raise the sticker price on everyday goods.”
Tariffs can increase the prices of electronics, cars and auto parts, clothing and shoes, and many household goods and appliances. Consider over-budgeting for big-ticket tariff items and building tariff price-buffers into your budget.
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.
More From GOBankingRates
- Mark Cuban Warns 4 Key Industries Could Crumble in the Next Recession
- How Much Groceries Cost Americans 10 Years Ago vs. Today
- How Middle-Class Earners Are Quietly Becoming Millionaires -- and How You Can, Too
- 6 Safe Accounts Proven to Grow Your Money Up to 13x Faster
This article originally appeared on GOBankingRates.com: 2026 Midterm Elections: 5 Risks to Your Wallet To Plan for Now
