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As former President Donald Trump and Vice President Kamala Harris unveil their economic agendas, both candidates have called for tax changes that could affect millions of Americans.
The next president will face trillions in expiring tax breaks enacted by Trump via the Tax Cuts and Jobs Act of 2017.
Both candidates have proposed tax cuts and increases that require congressional approval.

Vice President Kamala Harris, left, and former President Donald Trump

As former President Donald Trump and Vice President Kamala Harris unveil their economic agendas, both presidential candidates have called for tax changes that could affect millions of Americans.
Taxes will be a key issue for the next president. Without action from Congress, trillions in tax breaks enacted by Trump via the Tax Cuts and Jobs Act, or TCJA, will expire after 2025. More than 60% of taxpayers could see higher taxes in 2026 without extensions, according to the Tax Foundation.

Expiring provisions include lower federal income tax brackets, a higher standard deduction, a bigger child tax credit and more generous estate and gift tax exemptions, among others.
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However, “there’s a gulf between the political rhetoric around the 2017 tax law and the policy reality that both parties are going to face next year,” said Andrew Lautz, associate director for the Bipartisan Policy Center’s economic policy program.
While Democrats have criticized elements of the TCJA, both parties will likely agree to extend trillions in tax cuts, he said. But negotiations could be challenging amid concerns about the federal budget deficit. 
Extending TCJA provisions and subsidized premiums for marketplace health insurance could increase federal deficits by nearly $5 trillion over 10 years, according to the Bipartisan Policy Center.

Here’s a breakdown of where each candidate stands on tax policy.

Plans to extend Trump’s tax cuts

Trump aims to preserve the individual and business tax cuts enacted via TCJA, the campaign said in a press release on Monday.
He addressed his tax agenda briefly during an event in York, Pennsylvania, on Monday, which countered the Democratic National Convention. During that speech, he promised “big tax cuts for families and small businesses.”
Harris hasn’t directly addressed TCJA extensions during her 2024 campaign. But President Joe Biden’s top economic advisor, Lael Brainard, in May voiced support for partial extensions.
“Achieving a fairer tax system also means we can’t extend expiring Trump tax cuts for those with incomes above $400,000,” Brainard said.
The Trump and Harris campaigns did not respond to CNBC’s request for comment.

Proposed tax increases

Both candidates have vowed to address the budget deficit and have proposed measures to raise revenue. But tax law changes must be approved by Congress, which could be challenging, depending on future House and Senate control.
The Harris campaign on Monday said she would push to increase the corporate tax rate to 28%, up from the 21% permanently enacted via the TCJA. The plan could reduce the deficit by $1 trillion over a decade, according to estimates from the Committee for a Responsible Federal Budget.
Meanwhile, Trump has called for sweeping tariffs, which are taxes levied on imported goods.
Trump’s proposed baseline 10% tariff and 60% levy on Chinese goods could reduce the average after-tax U.S. household income by roughly $1,800 in 2025, according to the Tax Policy Center.
During his event Monday, Trump pushed back on the assertion that tariffs would cost American consumers. “It’s a tax on a foreign country,” he said.

Tax cuts on tips, Social Security

Both campaigns have also floated eliminating income tax on tip income, pitching the idea at separate events in Nevada, a battleground state and service industry hotbed. Harris announced her plan Aug. 10, roughly two months after Trump introduced his.
Despite some bipartisan support in Congress, the idea has faced criticism from some policy experts who believe the measure could face administrative hurdles and possible abuse.

The big question for us as policy wonks is, what is the underlying policy rationale?

Garrett Watson
Senior policy analyst and modeling manager at the Tax Foundation

“The big question for us as policy wonks is, what is the underlying policy rationale?” said Garrett Watson, senior policy analyst and modeling manager at the Tax Foundation.
Trump has also called for no taxes on Social Security income. Social Security is a key issue for voters this election, according to a CNBC poll. CNBC surveyed 1,001 registered voters July 31-Aug. 4.

Child tax credit expansion

Harris on Friday announced an economic plan, including an expanded child tax credit worth up to $6,000 in total tax relief for families with newborn children, among other priorities.
Her plan came less than one week after Sen. JD Vance of Ohio, former President Donald Trump’s GOP running mate, floated a $5,000 child tax credit. 
A Trump campaign official told CNBC at the time: “Trump will consider a significant expansion of the child tax credit that applies to American families.” More

Tax credits under the Inflation Reduction Act have led to a boom in new manufacturing projects in the U.S.
GOP congressional districts and rural communities have benefited in particular.
The presidential election is creating uncertainty about the future of those projects, with some investors worried a Republican victory could weaken the IRA.

Monica Muñoz, top, and Denise Denning place black encapsulation material on solar panels at Elin Energys solar panel manufacturing facility on Thursday, April 25, 2024 in Brookshire. 
Brett Coomer | Hearst Newspapers | Getty Images

The Inflation Reduction Act has sparked a manufacturing boom across the U.S., mobilizing tens of billions of dollars of investment, particularly in rural communities in need of economic development.
The future of those investments could hinge on the outcome of the U.S. presidential election. The prospect of a Republican victory has shaken the confidence of some investors who worry the IRA could be weakened or in a worst-case scenario repealed.

Companies have announced $133 billion of investments in clean energy technology and electric vehicle manufacturing since President Joe Biden signed the IRA into law in August 2022, according to data from the Massachusetts Institute of Technology and the Rhodium Group.
Actual manufacturing investment has totaled $89 billion, an increase of 305% compared to the two years prior to the IRA, according to MIT and Rhodium. Overall, the IRA has leveraged half a trillion dollars of investment across the manufacturing, energy and retail sectors, according to the data.
“It is having a transformative effect within the manufacturing sector,” said Trevor Houser, a partner with the Rhodium Group. “The amount of new manufacturing activity that we’re seeing right now is unprecedented in recent history, and is in large part due to new clean energy manufacturing facilities.”
Some 271 manufacturing projects for clean energy tech and electric vehicles have been announced since the IRA passed, which will create more than 100,000 jobs if they are all completed, according to the advocacy group E2, a partner of the National Resources Defense Council. The investments sparked by the IRA have been a boon for rural communities in particular, Houser said.
“Unlike investment in AI and tech and finance, which is clustered in big cities, clean energy investment really is concentrated in rural communities, and is one of the brightest sources of new investment in those areas,” Houser said.

The IRA has also accelerated the deployment of renewable energy, with $108 billion in invested in utility-scale solar and battery storage projects. Investments in solar and battery storage have surged 56% and 130%, respectively, over the past two years, according to the Rhodium data.
“The more mature technologies, so like wind and solar generation, electric vehicles, those have achieved escape velocity,” Houser said. “They will continue to grow no matter what. It’s a question of speed.”

Trump threats to IRA

But the “manufacturing renaissance” is still in its early stages and remains fragile, Houser said. Without the IRA, the resurgence of new factories would not have taken off, said Chris Seiple, vice chairman of Wood Mackenzie’s power and renewables group.
Former President Donald Trump has threatened to dismantle the law as he advocates for more oil, gas and coal production.
“Upon taking office, I will impose an immediate moratorium on all new spending grants and giveaways under the Joe Biden mammoth socialist bills like the so-called Inflation Reduction Act,” Trump told supporters at a May rally in Wisconsin.
“We’re going to terminate his green new scam,” he said. “And we’re going to end this war on American energy — we’re going to drill, baby, drill.”

Clean energy stocks tumbled after President Joe Biden’s disastrous debate performance in late June, as investors worried that Trump and the Republicans are poised to sweep both the White House and Congress were growing more likely.
First Solar, the largest panel manufacturer in the U.S., saw growing constraints on access to capital in the second quarter for early stage solar companies as well as larger players that are trying to build out domestic manufacturing, CEO Mark Widmar told analysts on the company’s July 30 earnings call.
Investors are waiting to make decisions until they have a clearer view of what the policy environment will look like for the solar industry, Widmar said. Utilities and oil companies that were making investments in renewables are now considering a pivot to prioritize fossil fuel projects, he said.
The fear among some investors is that Republicans would will use the reconciliation process, through which bills can be passed with a simple majority, to roll back the IRA in order to finance making Trump’s 2017 tax cuts permanent.

Trump told Reuters Monday he would consider ending the $7,500 tax credits for electric vehicles. Consumers and business have spent $157 billion on zero-emission vehicles since 2022, double the amount before the IRA became law, according to Rhodium.
“Tax credits and tax incentives are not generally a very good thing,” the former president told Reuters in an interview when asked specifically about the EV credits after a campaign even in York, Pennsylvania.
Trump has not specifically called out the tax incentives that have supported the expansion of renewables. The former president’s campaign platform says Republicans will support energy production from all sources. The document backs oil, coal and natural gas as well as nuclear, but does not specifically mention solar or wind power.

Republican districts benefit most

Executives at renewable companies and analysts are betting the investment, production and manufacturing tax credits, which are driving much of the spending on clean energy and technology, would survive even a Republican administration.
A majority of IRA investment in new projects, 85%, has gone to GOP congressional districts, according to E2 data. And Trump’s campaign platform emphasizes expanding domestic manufacturing and bringing supply chains back to the U.S.
The dynamics of the presidential race have also changed since Biden ended his re-election bid, with Vice President Kamala Harris rising to a slight lead over Trump national polling averages as she formally accepts her party’s nomination at the Democratic National Convention in Chicago this week.

“We’ve seen an increase in the number of Republican lawmakers that are embracing the clean energy credits within the IRA as they see the positive impact to their states and communities, which is hard to turn away from,” John Ketchum, CEO of NextEra Energy, which operates the largest portfolio of renewable energy, told analysts on the company’s July 24 earnings call.
“And the tax laws are very difficult to overturn,” Ketchum said. “And we’re very likely to have thin margins in the House and the Senate, particularly in light of some of the recent developments,” he said, hinting at Harris’ rise as the new Democratic candidate.
Indeed, 18 Republican members of Congress warned House Speaker Mike Johnson earlier this month that repealing IRA energy tax credits would be bad for business.
“Prematurely repealing energy tax credits, particularly those which were used to justify investments that already broke ground, would undermine private investments and stop development that is already ongoing,” the Republican lawmakers wrote.
“A full repeal would create a worst-case scenario where we would have spent billions of taxpayer dollars and received next to nothing in return,” they wrote.
John Berger, CEO of rooftop solar installer Sunnova, told analysts on the company’s Aug. 1 earnings call the Trump trade that drove clean energy stocks lower might not have much more room to run.
“Clearly, this is a dead heat now,” Berger said of the presidential race. “I think that the old Trump trade and so forth, I would be very cautious on that.” More

Traders work the floor of the New York Stock Exchange on August 16, 2024. 
Angela Weiss | AFP | Getty Images

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Here’s what CNBC TV’s producers were watching as stocks rallied Monday and what’s on the radar for the next session.

Gold run

The commodity hit a new high in Monday’s session: $2,549.90.
It is now up 8 out of 9 sessions. Thanks to CNBC data teamer Chris Hayes for the stats and facts.
Gold is up 4.5% in those nine days. Silver is up 8.4% in that same period.
The VanEck Gold Miners ETF (GDX) is up 6.3% in a week and 10% in nine days.

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VanEck Gold Miners ETF performance in 2024

The dollar

The Dollar Index hit its lowest level since Jan. 5 on Monday morning.
A weaker dollar sometimes is good for U.S. exporters as their stuff gets less expensive for overseas buyers.
There are lots of examples of exporters, but Procter & Gamble is one that comes to mind. The stock is up nearly 5% so far in August. The S&P 500 is up about 1.5% in August.

Lowe’s

The home improvement company reports quarterly numbers before the bell.
The stock is up 5% in the past three months.
Lowe’s is up 11% in a year, and the stock is 7.3% from the March high.
Home Depot is also up 5% in three months. The stock has gained nearly 11% in the past year, and it’s 8.5% from the March high.
This is probably not an exact apples-to-apples comparison, but luxury home furnishings company RH is 30% from the September high. Shares are down 23% in a year.

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RH’s performance over the past year

Amer Sports

CNBC TV’s Brandon Gomez will be watching for the numbers before the bell from this sporting goods company. Amer Sports’ brands include Salomon, Atomic, Wilson and Louisville Slugger.
The stock is down about 24% in the past three months. The stock is 32% from the 52-week high hit back in March. Amer, however, is up 12% in a month.
Dick’s Sporting Goods is 3% from the June high. Shares are up 16.5% in three months.
Academy Sports and Outdoors is 27% from the 52-week high hit in March. The stock is up 3% in three months.

Hawaiian Airlines and Alaska Airlines

Texas Instruments

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Texas Instruments’ performance in 2024

Berkshire Hathaway

Jill Schneider on the CNBC Flash Desk pointed out that Berkshire Hathaway B shares hit a new high on Monday.
Berkshire Hathaway B shares are up 26% in 2024, and they are up 4.3% in a week. More

Higher prices have made it more challenging for Americans to stretch their paychecks.
But many households can cover an emergency $400 expense, when combinations of cash, disposable income or short-term credit are considered, new research finds.
Still, cash is 100% the preferred method when paying for unforeseen costs, one expert says.

JGI/Jamie Grill | Blend Images | Getty Images

How people would handle a surprise $400 expense

The Federal Reserve has found 13% of all adults would have been unable to pay for an unexpected $400 expense in 2023.
Yet, JPMorgan Chase Institute finds the share of individuals who are unable to cover such an expense is lower — just 8% — when considering a combination of available cash, disposable income or short-term credit. The share of households that could not weather a $400 emergency expense stayed the same through 2022 and 2023, JPMorgan Chase Institute found.

The research finds a higher level of financial resiliency than what shows up when only considering cash reserves, and notes that access to affordable credit can help.

Most families, 92%, can cover a $400 “expense shock” through a combination of cash savings, disposable income or short-term credit, JPMorgan Chase Institute finds.
That includes 67% of households that can cover the expense using all cash savings; another 20% that can cover it with a combination of cash and disposable income; 3% that can use cash, disposable income and a credit card without incurring interest; and 2% that would use cash, disposable income and a credit card that can be paid off within three months.

Using 100% cash is still the preferred method

But turning to credit to handle even a short-term cash crunch can contribute to long-term debt.
For that reason, financial advisors recommend building a cash cushion against emergencies.
“There’s good debt and … there’s bad debt,” said Ted Jenkin, a certified financial planner and the CEO and founder of oXYGen Financial, a financial advisory and wealth management firm based in Atlanta.
“But to me, almost all debt, maybe with the exception of having a long-term mortgage, is bad debt,” said Jenkin, who is also a member of the CNBC Financial Advisor Council.  

Building an emergency cash reserve, which experts say should be at least three to six months’ of living expenses, can be tough. But there are tips that can help.

Apply the rule of thirds to extra income. Every time you get a pay raise or bonus, one-third of that extra money will go to taxes and one third can go to enjoyment. But the remaining one-third should go to savings, by either paying off credit card debt or building an emergency fund, according to Jenkin. “This is really what will help people never get in trouble,” he said.

Put away extra paychecks. Most people are paid on a bi-weekly schedule, which means in two months of the year, they receive three paychecks. “Bank that third paycheck in your savings account for an emergency reserve,” Jenkin said, which will go a long way to help “normalize” your finances.

Clean out your gift cards. Many people have unused gift cards, which can be turned into cash at sites such as Raise or CardCash, Jenkin said. The exchange likely won’t be dollar for dollar. But trading those unused cards for cash can help you build up your emergency reserves, Jenkin said.

Don’t miss these insights from CNBC PRO More

Although inflation is cooling, up to roughly one-third of families say buying supplies for the new year will put them into debt, recent reports show.
Here are some of back-to-school items with notable year-over-year price changes.

A Target store in Queens, New York.
Lindsey Nicholson | UCG | Universal Images Group | Getty Images

The back-to-school shopping season is in full swing, with the hefty bills to prove it.
Nearly one-third — 31% — of back-to-school shoppers said that buying supplies for the new year will put them into debt, according to a new report by Bankrate, which polled more than 2,300 adults in July.

A separate report by Intuit Credit Karma also found that 31% of parents said they can’t afford back-to-school shopping this year and 34% expect to take on debt to cover the cost of supplies. That survey polled more than 1,000 adults last month.
Higher prices are partly to blame: Families are now paying more for some key back-to-school essentials such as backpacks ahead of the new school year. CNBC used the producer price index — a closely followed measure of inflation — to track how the costs of making certain items typically purchased for students has changed between 2019 and 2024.

On the upside, most families say back-to-school shopping is less of a strain in 2024 compared with a year earlier, Bankrate found.
Overall, inflation continues to retreat. The consumer price index, a key inflation gauge, rose 2.9% in July from a year ago, the U.S. Department of Labor reported. That figure is down from 3% in June and the lowest reading since March 2021.
“Shoppers aren’t clutching their wallets nearly as tightly this year,” said Ted Rossman, Bankrate’s senior industry analyst. “It’s important not to let your guard down, though.”

Back-to-school spending may hit nearly $40 billion

Families with children in elementary through high school plan to spend an average of $874.68 on school supplies, just $15 less than last year’s record of $890.07, according to the National Retail Federation.
Altogether, this year’s back-to-school spending, including for college students, is expected to reach $38.8 billion, the NRF also found. That’s the second-highest tally ever, after last year’s $41.5 billion marked the most expensive back-to-school season to date.
More than 75% of parents said they believe schools ask them to buy too much during back-to-school season, according to a report by WalletHub.

Parents ‘influenced’ to splurge

Despite having to navigate tight budget constraints, 85% of parents said they could be influenced to splurge on a “must-have” item or brand, another survey by Deloitte found. In May, the firm polled more than 1,100 parents who will have at least one child in grades K through 12 this fall.
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According to Casey Lewis, a social media trend expert, low-rise jeans; Adidas Campus sneakers, which cost as much as $110 at adidas.com; and Jester backpacks from North Face, retailing for $75 or more, are topping students’ wish lists this year.
“There’s a lot of pressure to have the right look,” Lewis said. And as trends cycle through faster and faster, “young people have even more pressure to keep up,” she added. “It feels like their popularity and perceived coolness rides on the products they have.”

How to save on back-to-school shopping

Consumer savings expert Andrea Woroch advises families to shop for gently used clothing, sporting goods, school supplies and certified-refurbished electronics on resale sites, use a price-tracking browser extension or app and apply coupon codes. There are a growing number of online retailers that offer children’s product overstock, open-box and returned goods, often at a significant discount.
If you are buying new, try stacking discounts, Woroch recommended, such as combining credit card rewards with store coupons and cash-back offers while leveraging free loyalty programs. For example, you can get 50% off with 2% cash back at Old Navy and 20% off with 1.5% cash back at Office Depot, among other deals.
Otherwise, shop your own stock, Woroch said. “Rip out pages in a partially used notebook, collect scattered markers and crayons to make a full set and clean up last year’s backpack and lunch tote.”

Don’t miss these insights from CNBC PRO More

Minnesota Gov. Tim Walz, Vice President Kamala Harris’ choice as a running mate on the Democratic presidential ticket, may champion a policy of free meals for all K-12 students regardless of family income.
Walz signed a Minnesota state law to create universal free school meals.
Eight states have passed such legislation. Universal free school meals had been available nationwide during the Covid-19 pandemic.
Harris unveiled economic policy proposals Friday aimed to offer financial support related to food and children.

Will & Deni Mcintyre | Corbis Documentary | Getty Images

The idea of offering universal free school meals could become a policy issue in the U.S. presidential race, experts say — especially given Vice President Kamala Harris’ choice of Minnesota Gov. Tim Walz as her running mate on the Democratic ticket.
The federal government offered K-12 students free school meals — regardless of household income — for two years during the Covid-19 pandemic.

That policy has since ended. However, eight states have passed laws to continue offering free meals.
Among them is Minnesota. Walz, a former teacher, signed a bill in 2023 to provide breakfast and lunch to the state’s public school students at no charge, regardless of household income.

“Should Harris and Walz win the election, his role as vice president and his potential influence on universal school meals could be profound,” wrote Alexina Cather, policy director at Wellness in the Schools, an advocacy group for public school nutrition.
Harris, the Democratic presidential nominee, unveiled some details about her economic policy platform Friday.
School meals weren’t among them. But children and food feature in a few proposals: one to restore and enhance the value of a pandemic-era child tax credit, and another to enact the first-ever federal ban on “corporate price-gouging” on food and groceries.

A spokesperson for the Harris campaign didn’t respond to a request for comment.
The federal school lunch program has for decades provided meals for lower-income students. But universal free lunch advocates say it’s essential that free meals be provided for all students.
It helps school districts by reducing administrative burdens and, for students, eliminates “the stigma and shame tied to free and reduced-price meals, creating a level playing field for every child in the cafeteria,” said Alexis Bylander, interim director of child nutrition programs and policy at the Food Research & Action Center, or FRAC.

How the federal school lunch program works

The typical student pays $1.75 or $1.80 for a full-price breakfast at a school cafeteria, varying by grade level, according to the School Nutrition Association. Lunch typically costs $2.83 to $3.05, according to the group. Its data reflects the median price. Prices may be higher or lower based on school district.
The federal government currently subsidizes meal cost for certain students — based on criteria such as annual income — via initiatives such as the National School Lunch Program.
Under the NSLP, students in families with income at or below 130% of the federal poverty line qualify for a free meal.
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A family of three would need to make less than about $34,000 a year to qualify for free meals, according to Bylander.
Those at 130% to 185% of the poverty line are eligible for reduced-price meals. Such students don’t pay more than 30 cents for breakfast or 40 cents for lunch.
On average, about 20 million students — roughly 71% — ate free or reduced price lunches in 2023, according to the U.S. Department of Agriculture.
Former President Donald Trump signed legislation in March 2020 that allowed the U.S. Department of Agriculture to issue nationwide waivers that effectively made meals free for all kids in participating school districts.
That expansion was in place for the 2020-21 and 2021-22 school years.

The “vast majority” — about 90% — of U.S. school districts participated, according to the USDA. Schools were allowed to serve meals or deliver them even if they were closed during the pandemic.
Congress didn’t extend the policy for the 2022-23 school year.
Since then, eight states — California, Colorado, Maine, Massachusetts, Michigan, Minnesota, New Mexico and Vermont — have passed laws to create universal free school meal programs, according to the Hunter College New York City Food Policy Center.
All those states are headed by Democrats, with the exception of Vermont Gov. Phil Scott, who is a Republican.
Many other states are “currently planning, drafting, discussing, or negotiating” such legislation for the “near future,” the Food Policy Center added.
“This isn’t a new idea, but it really picked up speed during the pandemic,” FRAC’s Bylander said. “I think there’s a lot of momentum around this issue.”

Some groups oppose universal free school meals

The policy of offering universal free school meals doesn’t seem to have buy-in across conservative circles.
For example, the blueprint for Project 2025 — a collection of policy plans developed by right-leaning groups and spearheaded by the Heritage Foundation — would “reject efforts” around universal free school meals, according to its text.
Democrats have pointed to Project 2025 as an example of what a second Trump term could look like.
The former president made statements distancing himself from the policy blueprint. But several people who formerly worked for Trump were involved in creating the playbook, and a recently resurfaced video from April 2022 shows Trump speaking at a Heritage Foundation gala about the group’s plans.
While in office, the Trump administration had extended the USDA waivers to offer universal free school meals.
A spokesperson for the Trump campaign didn’t respond to a request for comment.

Project 2025 would also “restore” the National School Lunch Program to its “original goal” of providing food to K-12 students of low-income families who would otherwise forgo a meal, and not include middle and higher earners.
“Federal school meals increasingly resemble entitlement programs that have strayed far from their original objective and represent an example of the ever-expanding federal footprint in local school operations,” according to the text. More

“Underconsumption core” showcases the old items that people are still using.
The trend follows other recent pushes on social media to normalize not spending, such as “loud budgeting” and “de-influencing.”

Sophie Hinn with a pencil holder her mom made out of trash.
Courtesy Sophie Hinn

Using only one water bottle. Finishing that tube of makeup before buying another. Owning furniture that’s been passed down through generations.
This isn’t the lifestyle that social media influencers promoting their Amazon storefront or their brand discount codes show. So-called “underconsumption core,” however, is one of the latest personal finance trends to go viral on TikTok, with many videos about the topic receiving millions of views.

On social media, the “core” ending is often used to describe a shared aesthetic among users. Non-personal finance examples include cottage core and goblin core. Underconsumption core showcases the old items that people are still using.
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The trend is coming into play at a point when consumers feel increasingly cash-strapped.
“I think it’s romanticizing being middle class,” real estate agent Sophie Hinn of Okoboji, Iowa, told CNBC.
She has posted about how she embodies the trend, including using old towels for cleaning rags and filling her home with furniture that’s “thrifted, gifted, repurposed, [or] family hand-me-downs.”

‘Wrong to throw away perfectly usable things’

Maya Feldman with her old hairdryer.
Courtesy Maya Feldman

In a July video — one of the first using the term “underconsumption core” — 18-year-old Maya “Liu” Feldman from Germany shows the old hair dryer she still uses, and clothes from seventh grade and holey jeans she still wears.
Feldman’s TikTok immediately went viral, racking up more than 436,500 likes and 2.3 million views. Many users commented that they lead a similar lifestyle or that they were motivated to spend less after watching Feldman’s video.
“I didn’t really have a lot as a kid, and it kind of gave me this mentality of it being wrong to throw away perfectly usable things,” Feldman told CNBC.
The underconsumption core trend follows other recent pushes on social media to normalize not spending, such as “loud budgeting” and “de-influencing.”
“This one just puts a little bit more emphasis on upcycling items,” sustainability influencer Sabrina Pare told CNBC. A video showcasing her version of the trend — including the “7+ years old” leggings she still wears, and how she cuts open makeup products to “get every last drop” — received 210,600 likes.
She said de-influencing “was just focusing on not buying, and this was more focused on using what you have.”

Underconsumption or normal consumption?

Some creators have also argued that underconsumption core should instead be called “normal consumption core” because some of the behaviors frequently shown in the videos, such as reusing items, are a part of many people’s everyday lives. 
“With TikTok Shop and just people always trying to sell you something, I think it’s refreshing for people to see [that] other people don’t consume,” Hinn said.
Still, it’s possible for the underconsumption core trend to go too far, said Douglas Boneparth, a certified financial planner and the founder of Bone Fide Wealth, a wealth management firm based in New York City. He is also a member of CNBC’s Financial Advisor Council.

He pointed to the Financial Independence, Retire Early movement that gained popularity a few years ago as another example of people wanting to save money. Followers of the movement aim to save up to 75% of their income, often sacrificing current comforts for the goal of exiting the workforce early.
“The flip side is if you get too caught up in that, are you basically sucking the joy out of things?” Boneparth said. “Are you not allowing yourself to actually partake in some of the more fun or frilly things in life? If you’re in the extreme camp of each, neither is good.”

‘The key word in personal finance is personal’

Hinn, Feldman and Pare all showed different interpretations of underconsumption core in their TikToks. Also, none of them expressed interest in changing their lifestyles much because they felt they already had the underconsumption core mindset, even if the term didn’t exist yet.
“I think [sustainability] is definitely a part of my everyday life,” Pare said. “It’ll always be a part of my content.”
Still, she said she’s curious if people will be using the term “underconsumption core” a few months into the future.
While the videos about underconsumption core can serve as inspiration for how to save money, Boneparth emphasized that the strategies they promote shouldn’t necessarily be immediately adopted. It’s smart to assess how a certain change fits, and what kind of benefit you may see from the effort.

Even when the underconsumption core trend fades out on social media, a balanced financial lifestyle will still be important, he said.
“The key word in personal finance is personal,” Boneparth said. “The ultimate goal should be finding the thing that works for you that allows you to be consistent and allows you to be disciplined, whether we’re talking about savings, investing [or] the accumulation of assets.” More

Everything from car loans and mortgages to credit cards will be impacted once the Federal Reserve starts lowering interest rates.
Here’s how you can position yourself to benefit.

The Federal Reserve could start lowering interest rates as soon as next month, based on the latest inflation data.
“We think that the time is approaching,” Fed Chair Jerome Powell said at a press conference after the last Federal Open Market Committee meeting in July.

For Americans struggling to keep up with sky-high interest charges, a likely September rate cut may bring some welcome relief — even more so with the right planning.
“If you are a consumer, now is the time to say: ‘What does my spending look like? Where would my money grow the most and what options do I have?'” said Leslie Tayne, an attorney specializing in debt relief at Tayne Law in New York and author of “Life & Debt.”
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Fed officials signaled they expect to reduce the benchmark rate once in 2024 and four times in 2025.
That could bring the benchmark fed funds rate from the current range of 5.25% to 5.50% to below 4% by the end of next year, according to some experts.

The federal funds rate is the one at which banks borrow and lend to one another overnight. Although that’s not the rate consumers pay, the Fed’s moves still affect the rates they see every day on things such as private student loans and credit cards.
Here are five ways to position your finances for the months ahead:

1. Lock in a high-yield savings rate

Since rates on online savings accounts, money market accounts and certificates of deposit are all poised to go down, experts say this is the time to lock in some of the highest returns in decades.
For now, top-yielding online savings accounts are paying more than 5% — well above the rate of inflation.
Although those rates will fall once the central bank lowers its benchmark, a typical saver with about $8,000 in a checking or savings account could earn an additional $200 a year by moving that money into a high-yield account that earns an interest rate of 2.5% or more, according to a recent survey by Santander Bank in June. The majority of Americans keep their savings in traditional accounts, Santander found, which FDIC data shows are currently paying 0.45%, on average.
Alternatively, “now is a great time to lock in the most competitive CD yields at a level that is well ahead of targeted inflation,” said Greg McBride, chief financial analyst at Bankrate.com. “There is no sense in holding out for better returns later.”
Currently, a top-yielding one-year CD pays more than 5.3%, according to Bankrate, as good as a high-yield savings account.

2. Pay down credit card debt

With a rate cut, the prime rate lowers, too, and the interest rates on variable-rate debt — most notably credit cards — are likely to follow, reducing your monthly payments. But even then, APRs will only ease off extremely high levels.
For example, the average interest rate on a new credit card today is nearly 25%, according to LendingTree data. At that rate, if you pay $250 per month on a card with a $5,000 balance, it will cost you more than $1,500 in interest and take 27 months to pay off.
If the central bank cuts rates by a quarter point, you’ll save $21 and be able to pay off the balance one month faster. “That’s not nothing, but it is far less than what you could save with a 0% balance transfer credit card,” said Matt Schulz, chief credit analyst at LendingTree.
Rather than wait for a small adjustment in the months ahead, borrowers could switch now to a zero-interest balance transfer credit card or consolidate and pay off high-interest credit cards with a personal loan, Tayne said.

3. Consider the right time to finance a big purchase

If you’re planning a major purchase, like a home or car, then it may pay to wait, since lower interest rates could reduce the cost of financing down the road.
“Timing your purchase to coincide with lower rates can save money over the life of the loan,” Tayne said.
Although mortgage rates are fixed and tied to Treasury yields and the economy, they’ve already started to come down from recent highs, largely due to the prospect of a Fed-induced economic slowdown. The average rate for a 30-year, fixed-rate mortgage is now around 6.5%, according to Freddie Mac.
Compared to a recent high of 7.22% in May, today’s lower rate on a $350,000 loan would result in a savings of $171 a month, or $2,052 a year and $61,560 over the lifetime of the loan, according to calculations by Jacob Channel, senior economic analyst at LendingTree.
However, going forward, lower mortgage rates could also boost homebuying demand, which would push prices higher, McBride said. “If lower mortgage rates lead to a surge in prices, that’s going to offset the affordability benefit for would-be buyers.”
What exactly will happen in the housing market “is up in the air” depending on how much mortgage rates decline in the latter half of the year and the level of supply, according to Channel.
“Timing the market is virtually impossible,” he said. 

4. Consider the right time to refinance

For those struggling with existing debt, there may be more options for refinancing once rates drop.
Private student loans, for example, tend to have a variable rate tied to the prime, Treasury bill or another rate index, which means once the Fed starts cutting interest rates, the rates on those private student loans will come down as well.
Eventually, borrowers with existing variable-rate private student loans may also be able to refinance into a less expensive fixed-rate loan, according to higher education expert Mark Kantrowitz. 
Currently, the fixed rates on a private refinance are as low as 5% and as high as 11%, he said.
However, refinancing a federal loan into a private student loan will forgo the safety nets that come with federal loans, he added, “such as deferments, forbearances, income-driven repayment and loan forgiveness and discharge options.” Additionally, extending the term of the loan means you ultimately will pay more interest on the balance.
Be mindful of potential loan -term extensions, cautioned David Peters, founder of Peters Professional Education in Richmond, Virginia. “Consider maintaining your original payment after refinancing to shave as much principal off as possible without changing your out-of-pocket cash flow,” he said.
Similar considerations may also apply for home and auto loan refinancing opportunities, depending in part on your existing rate.

5. Perfect your credit score

Those with better credit could already qualify for a lower interest rate.
When it comes to auto loans, for instance, there’s no question inflation has hit financing costs — and vehicle prices — hard. The average rate on a five-year new car loan is now nearly 8%, according to Bankrate.
But in this case, “the financing is one variable, and it’s frankly one of the smaller variables,” McBride said. For example, a reduction of a quarter percentage point in rates on a $35,000, five-year loan is $4 a month, he calculated.
Here, and in many other situations, as well, consumers would benefit more from paying down revolving debt and improving their credit scores, which could pave the way to even better loan terms, McBride said.

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