Category: Moneywise

Ever wonder why Sherlock Holmes barely ever had to pay any taxes? He was a master of deduction, of course! The most exciting part of the rather drab tax filing affair is finding the ways to (legally) reduce your taxes with credits and deductions. Do you know the difference between the two?

A tax deduction reduces your taxable income while tax credits reduce your tax payable. Let’s dig into what that means and how you can use tax credits and deductions to your advantage.

What is a tax deduction?

A tax deduction lowers your taxable income — which means the amount of income you owe for taxes is reduced.

For example, if you made $65,000 last year and claimed $5,000 in approved deductions, you would only have to pay tax on a reduced income of $60,000.

You’re probably already familiar with the Registered Retirement Savings Plan (RRSP) Deduction as one of the best tax-saving strategies in Canada. The more you contribute to your RRSP, the more you can deduct from your taxable income each year.

You may be eligible for some of these other common tax deductions, including:

• Union, professional, or dues, if these fees were related to your professional income
• Child care expenses, if you these expenses are for the purpose of earning a living or going to school
• Support payments, if you made spousal support payments
• Moving expenses, if you moved more than 40kms in order to be closer to your place of employment or to attend school
• Other employment expenses, if your employer required you to pay your own expenses and you’ve received a T2200 – Declaration of Conditions of Employment form
• Carrying charges and interest expenses, if these expenses were paid in order to earn business or investment income

Switch to TurboTax® Canada and file your taxes for only $60. Terms and conditions apply.

What is a tax credit?

A tax credit directly reduces how much tax you owe. Think of a deduction as shrinking the pie you’re taxed on, and a credit as taking a slice off your final bill.

After you’ve added up all your deductions and calculated your reduced taxable income, you can further reduce your taxes with tax credits.

There are two types of tax credits: non-refundable and refundable.

Non-refundable tax credits

Non-refundable tax credits help you reduce the taxes you owe. They are subtracted from your tax amount payable and are considered non-refundable because these credits don’t count towards a tax refund. If your total non-refundable credits are more than the taxes you owe, you will not get a refund for the difference.

For example, if you owe $1,000 in taxes and qualify for $250 in non-refundable tax credits, you would only owe $750 in taxes. If you owe $1,000 in taxes and qualify for $1,200 in non-refundable tax credits, you would owe $0 in taxes and the extra $200 would not be refunded.

The best example of the non-refundable tax credit is the Basic Personal Amount (BPA).

For the 2024 tax year, the BPA is $15,705 for individuals with a net income of $173,205 or less. This amount is reduced for higher-income earners.

You may be eligible for some of these other common non-refundable tax credits:

• Canada Caregiver Credit, if you are a caregiver to someone with a disability
• Home Buyers’ Amount, if you’re a first-time homebuyer or a homebuyer with a disability
• Home Accessibility Expenses, if you renovated your home to be safer or more accessible for seniors or the disabled
• If you paid interest on your student loan in the current tax year or the preceding 5 years
• If you made tuition or education-related payments in the tax year, including textbook amounts
• Eligible medical expenses, if your medical expenses cost you more than the lesser of two options: 3% of your net income (as reported on line 23600 of your tax return) or $2,759 (the threshold for 2024)
• Donations and gifts, if you made charitable or political donations

Refundable tax credits

Refundable tax credits are credits that the government will pay you if you qualify for them, even if you don’t owe any taxes. They’re considered refundable because if the amount of the credit is more than the taxes you owe, you will get a refund for the difference.

For example, if you owe $1,000 in taxes and qualify for $1,200 in refundable tax credits, you would be issued a refund of $200.

Governments may pass on these refundable credits to you in a series of payments throughout the year to help with living expenses, like the tax-free quarterly GST/HST Credit payment that helps individuals and families with low incomes offset the GST and HST that they pay. To continue getting payments, you need to do your taxes every year, even if you have no income at all.

Other common refundable tax credits can include:

• CPP or EI overpayment.
• Canada Workers Benefit (CWB), if you’re an eligible low-income individual or family in the workforce
• Canada Child Benefit (CCB), if you’re an eligible family with children under 18 years of age

How do tax deduction and tax credits actually work?

Canada uses a progressive income tax system, which means low-income earners are taxed at a lower rate than higher-income earners. We pay a combination of both federal and provincial income taxes. Let’s take a practical look at how your tax deductions and credits actually work using the federal tax brackets.

As of 2024, the federal income tax brackets, which are adjusted for inflation, are:

• 15% on the first $55,867, plus

• 20.5% on the portion from $55,867 to $111,733, plus

• 26% from $111,733 to $173,085, plus

• 29% from $173,085 to $244,261, plus

• 33% on income over $244,261

If you earned $49,020, you would fall into the 15% tax bracket and be subject to $7,353 in federal income tax. If you earned $55,867 to $111,733, the first $55,867 you earn would still be subject to 15% in tax, and the remainder, up to $111,733, would be subject to the 20.5% income tax rate.

How to calculate a tax deduction

A tax deduction will reduce your taxable income.

Let’s assume you live in Ontario and earned $65,000 in taxable income. Without a tax deduction, your federal and provincial tax owed would be $11,130.55.

Make a $5,000 registered retirement savings plan (RRSP) contribution and this tax deduction would reduce your taxable income to $60,000. As a result, the total federal and provincial tax owed is now $9,648.05 — saving you almost $1,500 in taxes owed.

Take advantage of tax credits and tax deductions

If you’re in the lowest tax bracket, the value of a tax deduction is equal to the value of a tax credit, both are calculated at the 15% rate (the lowest federal tax bracket). Tax deductions become more valuable than tax credits when your income increases, since deductions reduce your taxable income at your marginal tax rate.

Your non-refundable credits and deductions may leave you without any taxes due. Additional refundable credits may mean that you’re in for a refund from the CRA. For example, if you end up with no taxes due and qualify for a $1,000 refundable tax credit, you would receive the entire amount as a refund. With that in mind, it’s common practice to calculate your refundable credits after you’ve factored in all eligible deductions and non-refundable credits.

The availability of tax credits and deductions change from year to year. Just because they were available one year doesn’t mean they’ll be there the next — they are not guaranteed.

For example, the 2020 tax year introduced a $400 deduction to cover home and office expenses for Canadians working from home due to the COVID-19 pandemic — this temporary home office expense deduction is no longer available. For current home office expense claims, you must use the detailed method and meet eligibility requirements set by the CRA.

Tthere are 95 different deductions, credits, and expenses that you can claim to reduce your taxes, but unless you’re a full-time tax accountant, it’s nearly impossible to know if you’re making the most from your tax return. It’s hard enough to keep track of your eligibility, much less understand the information and forms you need to fill out. The right tax software, like Wealthsimple Tax or TurboTax, can go a long way in helping to optimize your return.

Bottom line

Tax deductions and credits are your best bet to reducing your taxes, and may even generate a tax refund. Just remember you’ll need receipts to back up your claims. You won’t need to send them in with your tax filing but you should keep them for six years just in case the taxman comes knocking for an audit.

— with files from Romana King

Sources

1. Government of Canada: Line 20800 – RRSP deduction

2. Government of Canada: Line 30000 – Basic personal amount

3. Government of Canada: GST/HST credit – Overview

4. Government of Canada: Line 44800 – CPP or QPP overpayment

5. Government of Canada: Line 45000 – Employment insurance overpayment

6. Government of Canada: Canada Workers Benefit

7. Government of Canada: Canada child benefit

8. Government of Canada: All deductions, credits and expenses

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Over a million Canadian “snowbirds” go south when it gets cold every year, and many of them choose to spend winters in Florida.

But the current political climate is changing that.

Gulf Coast News recently reported on “a mass exodus” of Canadians from Southwest Florida as new travel regulations are imposed and the trade war escalates.

CNN also recently reported on snowbirds considering alternative destinations or selling their properties. “Some of the clients I have been dealing with want to sell at any cost, even at a loss,” said Share Ross, a realtor based in southeast Florida.

“More home purchases in the U.S. are done by Canadians than any other country — 13% from April 2023 to March 2024,” reported CBC News. “Half of all Canadian purchases were vacation homes, and roughly 41% of sales were in Florida.”

This will likely have a ripple effect on the tourism industry and local businesses.

“If we travel at all, it won’t be here”

Many Canadians are rethinking their plans to return to Florida, with some even considering putting their properties on the market.

"I’ve lived here six months. This is my home, but I’m leaving April 2," said Susan, a Canadian speaking with Gulf Coast News. She was not comfortable sharing her last name for fear of becoming a target amid the growing political divide between the U.S. and Canada.

For the Presement family — regular winter residents in Fort Myers — the political landscape has left them regretting their decision to visit Florida. “The truth of the matter is if I hadn’t prepaid everything and wasn’t here and your weather wasn’t so damn nice. I’d go home now,” Barry Presement told Gulf Coast News. He and his wife Ruth have no plans to return next winter. "If we travel at all, it won’t be here," Ruth said. "For sure, it won’t be here. We’ll go elsewhere."

Their son Brian had even considered retiring in Southwest Florida, but now says Mexico is looking like a better option. "We thought about buying a home in Florida, but now we might reconsider that," he said.

Local businesses are probably going to feel the strain of Canadians avoiding the U.S.

“It’s not only having a negative impact on the tourism market, but business as a whole,” said Cole Peacock, owner of cannabis cafe & CBD marketplace Seed and Bean, to Gulf Coast News. “You need those extra visits to kick that profit margins to another level.”

"Not only have Canadians been electing to divest from their vacation homes and investment properties in Florida, they have also been canceling their trips to the area which is having a negative impact on our vacation rental market," Robert Washington of Savvy Buyers Realty told Realtor.com. "We have heard from several of our vacation rental property owners that they have experienced multiple cancellations from Canadian guests due to the tariff battle. Hopefully the tariff situation is resolved soon, or it could have a lasting impact on our tourism industry."

What can Americans expect with Canadians fleeing their country and the levied tariffs?

While it has been documented how Trump’s tariffs would impact the Canadian economy, the pain will be equally felt by Americans as Canada imposes its own tariffs and residents retaliate through economic boycotts.

The U.S. Travel Association has said Florida is among the top five most visited states by Canadians and it “could see declines in retail and hospitality revenue, as shopping is the top leisure activity for Canadian visitors.”

In addition to losing economic opportunities afforded by Canadian visitors, Florida businesses and consumers are also facing another blow, the implementation of tariffs on imports from Canada and the rest of the world.

These tariffs are set to raise the costs of imported goods, raw materials and even locally produced items that rely on imported components.

The Federal Reserve Bank of Atlanta found that an additional 10% tariff on Chinese imports (that number has now shockingly risen to 125%), 25% tariffs on Canadian and Mexican imports, and 10% tariffs on other countries could raise consumer prices on everyday retail purchases such as food and beverage items, as well as general merchandise — covering about a quarter of the total consumption basket — by 0.81% to 1.63%, assuming the costs are fully passed to the consumer.

Americans react to Canadians exiting Florida

In a story published on Moneywise many Americans, especially Floridians, have been reacting to the news of Canadians leaving Florida and expressing a sense of relief:

Some were excited at the prospect of the housing market opening up due to Canadians selling their properties:

One commenter warned that this exodus is most likely temporary:

While others were more sympathetic to Canadians and the trade war waged against their country:

Sources

1. Gulf Coast News: Canadians exiting Florida and businesses feeling the exodus, by Dave Elias (Apr 8, 2025)

2. CNN: Canada’s snowbirds reconsider calling the US their second home, by Samantha Delouya (Mar 30, 2025)

3. CBC: London, Ont., snowbirds among Canadians saying so long to Sunshine State over Trump’s threats, by Matthew Trevithick (Mar 13, 2025)

4. Realtor: Canadian snowbirds are canceling their Florida trips and offloading properties amid tariff war, by Julie Gerstein (Mar 18, 2025)

5. U.S. Travel Association: Potential results of decline in Canadian travel to United States (Feb 3, 2025)

6. Federal Reserve Bank of Atlanta: Tariffs and Consumer Prices: Insights from newly matched consumption-trade micro data (Feb 2025)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

After spending decades saving for your retirement — and maybe making some sacrifices along the way — you’ve finally retired.

Now you can start living off your nest egg, which, if managed prudently, can maintain your standard of living while allowing you to spend more on indulgences like travel, hobbies and dining out.

But, if you’re like many Canadian retirees, this won’t be the case. Why? Because you won’t spend enough to get the most out of your retirement — even though you can.

It’s not easy being a spender

Economic theory suggests that we should try to keep our level of consumption steady throughout our lifetime. Yet, studies have shown that we reduce our inflation-adjusted consumption in retirement. This is known as the ‘retirement consumption paradox.’

For those without enough retirement income, this may be out of necessity. But it’s more likely driven by fear.

According to CPP Investments61% of Canadians are worried about running out of money in retirement.

Among non-retirees, having a financial plan set in place is one of the top reasons why they don’t worry about their retirement savings. Yet, many still restrict their savings. So, how can you move from a savings mindset to a spending mindset and begin to enjoy your retirement?

How to change your mindset

Knowledge is power, so first get a handle on your numbers. Be sure you have a full accounting of all your investments, pensions, governmental benefits, annuities and any other sources of income.

Do the same for your expenses. Hopefully, you’ve spent some time tracking them in your preretirement years so you have a place to start. You’ll want to create a budget for your retirement years and then track your spending (using an app is a great way to do this) so you can adjust as needed.

With this knowledge in hand, you can determine how much you’ll need to withdraw from your investments. It’s possible to reasonably draw down the principal each year and still have your money last for decades.

One commonly used method for determining a sustainable level of withdrawals is the 4% rule, by which you withdraw 4% of your portfolio the first year and then 4% plus an adjustment for inflation each subsequent year.

Regardless of the plan you’ve set up, you’ll need to learn to trust it — many don’t. But this is the time of life to stop saving and start spending, so don’t be afraid to embrace this new mindset.

That doesn’t mean you shouldn’t be keeping an eye on your investments. Each person is different, and it’s worth consulting an adviser, but you’ll want to make sure your investments are serving your interests in retirement.

For example, you might want a more conservative portfolio than when you were in your 30s and 40s, but you also might want some potential for growth to weather inflation or help your savings last longer.

If you don’t have a pension, you may want to consider buying an annuity. An annuity is a contract with an annuity provider, like a life insurance company, in which you pay a lump sum up front and then receive payments for either a set period of time or for the rest of your life.

Some studies have shown that people with annuities spend more and feel happierin retirement. To be comfortable that you’ll better weather potential risks, be sure you’re properly insured. Property damage, travel incidents and health issues can be expensive shocks and can derail your retirement plans. Insurance can help mitigate some of the financial damage.

If you’re not sure where to start, a financial adviser can help you decide how much to withdraw from your savings to meet your retirement goals — which, in turn, can help you overcome your fear of withdrawing this amount.

Sources

1. The Globe and Mail: Many Canadians underspend in retirement for no good reason. Here’s what they can do by Alison Macalpine (June 18, 2024)

2. CPP Investments: Nearly 2 in 3 Canadians worry about retirement savings: survey (Oct 30, 2024)

3. Government of Canada: Annuities

4. New York Life: Annuity owners report spending more, staying invested, and feeling happier in retirement (June 21, 2023)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

You may be aware that President Donald Trump’s global tariff war will see Americans paying more for consumer goods, but have you considered the cost of services will also rise?

According to a February report from Insurify, the cost of full-coverage car insurance in the U.S. could increase by 8% on average this year if Trump persists on 25% import tariffs on car parts made in Mexico and Canada.

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Plus, with Canadian steel and aluminum facing the same tariff, the price of manufacturing auto parts in America could also skyrocket.

The cost of auto parts is a major factor in the final price of your auto insurance. The car industry in the U.S. is highly reliant on our neighbors to the north and south, as the U.S. imports roughly 32% of its total auto parts from Canada and Mexico, according to data cited in the Insurify report. Imports of finished cars and trucks from Canada and Mexico also account for a fifth of all vehicles sold.

Tariffs on your transportation

Increasing insurance costs may not be the only headache, as demand for cars produced domestically will see automakers expand their workforces, and add to the final cost of the vehicles they make.

They’ll also have to absorb the higher cost of steel and aluminum imports, which will likely be reflected in car prices, too.

Whether you’re buying a new car or repairing a used one, the cost of parts will make transportation more expensive for Americans. Demand for cars made domestically may also increase if imports become prohibitively expensive.

USA today reports that according to Wolfe Research, tariffs could make the average cost of a new car rise by about $3,000.

Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

Rising costs for insurance

In February, the American Property Casualty Insurance Association reported that approximately six in 10 auto replacement parts used in U.S. repair shops are imports from Canada, Mexico or China. With higher costs for these auto parts leading to increased costs for insurers, premiums will rise accordingly.

According to a recent report from the Kelley Blue Book, the national average cost for car repairs is $838. With tariffs, this could put the cost for repairs well over $1,000.

In spite of these rising insurance costs, remember that repairing your vehicle is often cheaper than leasing a new one. You can also save money in the long run through proactive maintenance, and the upfront cost of a comprehensive plan can be worth it if you’re involved in a serious accident.

Speaking to USA Today, Insurify data journalist Matt Brannon projects that New York state will see the biggest increases in insurance rates this year, totalling $489 by the end of the year. Nearly a fifth, or $110 of that cost is directly attributed to tariffs, he reported.

The good news? Brannon said that car owners probably won’t see increases in their insurance bill until the end of the year. Most insurers, he noted, have to be approved by state regulators to increase the cost of premiums. This process can take months.

“We expect those price increases would show up when drivers renew their policies or switch to a new insurer, rather than in the middle of a six-month coverage period,” he said.

You can get ahead of these anticipated costs by setting aside more funds in your savings, and starting to do some research to find a more competitively-priced policy for your auto insurance, so that when you renew you won’t feel it in your wallet.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

About 800,000 Oklahomans depend on Social Security — and they’re wondering how proposed Security Social cuts could impact their retirement.

“Oklahomans want to hear and make sure that Social Security is protected and saved, not only for them, but their children, grandchildren,” Sean Voskuhl, AARP Oklahoma state director, told Oklahoma’s News 4 in a March interview. “More than 22% of Oklahomans rely on Social Security as their primary source of retirement income.”

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Now under Trump-appointed leadership, the Social Security Administration (SSA) is eliminating 7,000 jobs, significantly reducing its workforce, while closing several SSA offices across the country.

And that leaves Oklahomans with questions.

“Is Social Security going to be fully funded? Are people going to get their payments on time? And will there be people at the Social Security Administration offices to answer questions if people have them?” said Voskuhl.

The impact of proposed Social Security cuts

This comes at a time when a record number of baby boomers are reaching retirement age — a phenomenon referred to as Peak 65. And 2025 is the “peak” of Peak 65, with a record 4.18 million Americans reaching the traditional retirement age of 65, according to a research report by the Alliance for Lifetime Income’s Retirement Income Institute.

“Unlike older retired baby boomers, the majority of Peak 65’ers don’t have pensions, which used to help fill that gap left by Social Security,” according to the report’s author, Jason Fichtner, executive director of the institute and a former chief economist at the SSA.

That means cuts to the Social Security workforce are coming at a time when demand for its services are at an all-time high. Former Social Security Commissioner Martin O’Malley told CNBC.com in March that recent actions by Elon Musk’s Department of Government Efficiency (DOGE) are putting the benefit checks of more than 72.5 million Americans at risk.

“Ultimately, you’re going to see the system collapse and an interruption of benefits,” O’Malley said. “I believe you will see that within the next 30 to 90 days.”

Delays could be disastrous for many Americans. In one study, 42% of Americans aged 65-plus said they wouldn’t be able to afford basic necessities like food without their monthly check. For Americans about to retire, staffing cuts and office closures could lead to delays in processing their claims.

At the same time, DOGE — which is helmed by unelected billionaire Elon Musk — is closing 47 local Social Security offices in an effort to save money. Musk has referred to Social Security as “the biggest Ponzi scheme of all time.”

In Oklahoma, a total of 15 federal offices are on the chopping block, including the SSA office in Lawton. These closures will save an estimated $3.7 million, according to DOGE.

Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

How to adjust your retirement savings

From the get-go, Social Security was never meant to be the sole source of a person’s retirement income; rather, it was meant to supplement personal savings and pensions. But an AARP survey found that 20% of Americans aged 50-plus don’t have any retirement savings.

The earlier you start saving, the better — but it’s never too late to start. And that may be more important than ever, with “the imposition of additional tariffs on imports from China, substantial policy uncertainty, sizable pullback in consumer sentiment and spending since the beginning of the year, elevated geopolitical tensions and federal spending reduction initiatives,” according to The Conference Board’s forecast for the U.S. economy.

For those who don’t have a long-term financial plan, it may be worth sitting down with a financial advisor to create a strategy going forward (or to revisit your existing financial plan).

That could include rebalancing into a more diversified mix of investments to include different industries, countries and risk profiles, as well as alternative investments such as real estate or commodities. It could also include mitigating some risk through dividends, in which companies pay distributions to shareholders based on profitability.

Whether you’re saving for the future or close to retirement, you may want to explore your options for bringing in some extra cash, such as taking on a side gig. It may even be worthwhile to reevaluate your retirement plans. Maybe that means working a few more years before retiring, downsizing your home or moving to a less expensive neighborhood or city.

Younger investors have more time to ride out a potential downturn in the economy; those closer to retirement may want to talk to their financial advisor about their options.

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• Trump warns his tariffs will spark a ‘disturbance’ in America — use this 1 dead-simple move to help shockproof your retirement plans ASAP

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

It was an ordinary day for Pasco County, Florida resident Slawomir Odrzywolski. He had gone off to work on March 26 when he received a frantic phone call from his wife in the middle of the afternoon.

"Our house is destroyed," she told her husband.

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It turned out the county had accidentally pumped sewage into the couple’s home. And now, they’re dealing with the aftermath of a truly disgusting and disturbing mess.

A horrific experience

There’s a big difference between water damage in your home and sewer damage.

Water damage, if not treated promptly, could cause mold to form, among other things. But sewer damage is a whole different beast. When sewage gets into your home, it exposes you to a host of bacteria and parasites that could potentially cause different illnesses.

Think about it this way. If the idea of taking a bath in the pipes your toilet feeds sounds disturbing to you, then you don’t want a sewage backup in your home.

But unfortunately, that’s what happened to Odrzywolski. Pasco County was working on a sewer line in the area when sewage accidentally backed up into his and his wife’s home due to an error on their part.

The county tried to make it right. But Odrzywolski says, "It’s way not enough.”

County officials immediately hired a local cleaning company for $2,400 to perform the initial clean-up on Odrzywolski’s home the day of the incident. The county is offering Odrzywolski another $26,000 for further remediation plus $5,000 for incidentals.

Plus, the county says it will consider providing additional compensation if the contractor hired to fix the problem finds that the initial estimate won’t cover all of the necessary expenses to restore Odrzywolski’s home to its former state.

But Odrzywolski is doubtful the country’s offer will address the problem in full. He’s being quoted $16,000 just for necessary demolition work.

“Imagine, put everything back, the cabinets, flooring, all that for another $14,000? That’s impossible," he said.

In the meantime, Odrzywolski and his wife will be sleeping on their back patio until the situation is resolved, since they don’t feel safe in their home. It seems as though the county did not offer them temporary lodging while the remediation work is being done. It’s unclear as to whether their homeowners insurance policy offers this benefit, or what their homeowners coverage looks like.

Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

What to do if your home sustains damage through no fault of your own

Hopefully, you’ll never have to go through the same experience Odrzywolski did. But accidents can happen. And you could end up with property damage for a variety of reasons — a county construction vehicle could crash into a tree that hits your home, for example.

In a scenario like this, it’s important to address the situation methodically. First, assess the situation. If your home has sustained damage in a way that makes it unsafe, leave as quickly as possible. This was the case for Odrzywolski, and it may be the case if your home has sustained structural damage.

If you don’t have to flee, try to document the damage with photos. Also note the time of the incident and put any details you remember in writing.

Having your home get extensively damaged can constitute a shock. And your brain may not remember the details beyond the initial few minutes after the incident. So try to create a record of what occurred.

From there, there are some key people to call. First, you may want to notify local police. If it’s a situation where a county team of workers causes damage to your home and they acknowledge it right away, they might call the police themselves.

Next, call your homeowners insurance company and have them come out to assess the situation. You’ll probably need to file a claim, even if it turns out you’re entitled to be compensated for the damage from someone else. Your insurance company can help figure out who will pay for what.

Also, try to figure out if your home is habitable following the damage, or if you’ll need temporary housing. If it’s the latter situation, see if your insurance covers it. If not, you may want to ask for it as part of your compensation.

You may also want to contact a lawyer to discuss the situation and see if there’s legal recourse beyond an offer to repair the damage. For example, if there’s emotional distress to consider. Being displaced from your home could have other consequences.

If you work from home as an independent contractor, for example, and are forced to live in a hotel for several weeks while your property is being repaired, it could interfere with your ability to earn an income. That’s something you should potentially ask to be compensated for.

It’s also important to keep in mind that in some cases, property damage may be such that no amount of repair can restore your home to its original value. That’s something to document, too, so you can try to receive compensation.

Finally, retain receipts for all expenses you incur in the course of dealing with the damage. In a situation like the one above, it’s hard enough having to deal with the aftermath. You shouldn’t have to be out money because of someone else’s negligence. And if you find that you’re not being made whole, that’s where a lawyer comes in.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

McDonald’s is one of the most iconic American brands out there, and it’s done well through times of uncertainty — including during the COVID-19 pandemic, when it was easily able to pivot to delivery and takeout thanks to technology investments it’d been making for years.

That’s why it’s such a troubling sign that the brand has been performing poorly.

"While we anticipated a challenging environment in 2024, our performance so far this year has fallen short of our expectations," CEO Chris Kempczinski said in the company’s Q3 2024 earnings call, reported TheStreet.

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Kempczinski attributes the company’s poor performance, in part, to the fact that "consumers, especially those in the low-income category, were choosing to eat at home more often," and said that this is an industry-wide trend.

However, he also believes part of the problem may be that McDonald’s has "lost its way and ceded an important part of its brand identity to rivals."

Kempczinski’s warnings about McDonald’s are important because of what they say about the economy as a whole. But those who like to eat at McDonald’s should also consider what the statements suggest might happen to the cost of their favorite fast-food meal.

Poor performance at McDonald’s could be a sign of a troubled economy

The downturn at McDonald’s is important for everyone to pay attention to. The drop in sales — especially by people with lower incomes — could mean that people simply do not feel they have the money to eat out right now, even at inexpensive places like McDonald’s.

The data backs this up. A report by PYMNTS revealed that 98% of people who live paycheck to paycheck have changed their behavior to deal with rising prices at restaurants, including eating out less often or “trading down” to lower-cost items on the menu.

This probably isn’t a surprise to most people who have been coping with economic uncertainty in recent years.

In the aftermath of the pandemic, inflation surged to multidecade highs. Food and energy — two essential expenses you can’t escape — saw especially big price increases, and people are feeling the pain.

In fact, the Pew Research Center found that 63% of Americans described inflation as a "very big problem," in 2025, and one that affects their overall perceptions of the economy, with 45% of people saying the economy is only in fair shape and 31% describing it as being in poor shape.

Sadly, the consequences of struggling consumers extend beyond the impact on McDonald’s profits.

"Restaurants are a canary in the coal mine,” Michael Halen, a senior restaurant and food service analyst at Bloomberg Intelligence told Marketplace in 2024.

“Typically, you know, you see a slowdown in consumer discretionary spending in restaurants before you see it in other places.”

If there is a general slowdown in consumer spending, this raises the risk of a recession as reduced demand means companies tend to cut back, which in turn can increase unemployment and lead to further cuts — all of which impedes economic growth.

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McDonald’s is focusing on value, so the price to you could soon fall

While McDonald’s problems may indicate a reason to worry about the economy as a whole, there is a little bit of good news. Kempczinski has said the fast-food chain is going to shift its focus back to providing the best value for customers so people will feel like eating there is within reach — even while overall economic conditions aren’t great.

"We have moved with urgency in partnership with our franchisees to improve our value offerings in most of our major markets," Kempczinski said.

Some examples he cited include discounted happy meals in France, three for 3 pounds meal deals in the UK, and coffee for a dollar in Canada.

"As we have said before, we view good value as including both entry-level items and meal bundles at affordable price points," Kempczinski explained.

This includes Every Day Affordable Price Menus that have "compelling entry-level price points" for things like breakfast, as well as on beef and chicken sandwiches for lunch and dinner.

McDonald’s is not the only fast-food chain looking to capture the limited consumer dollars people feel comfortable spending.

Wendy’s has introduced a $3 breakfast meal, while Jack in the Box plans to offer more value items as well.

“Value is going to be something we talk about for the rest of the year,” Jack in the Box CEO Darin Harris told investors in 2024, reported Restaurant Business, when a slowdown in fast-food consumption was starting to emerge.

“We know the competition is doing that. So we will be in the game.”

So, as McDonald’s focuses on showing people it’s still affordable during challenging economic times, more people may once again start stopping in to the Golden Arches for a good deal — even if economic conditions as a whole have them feeling like they don’t have quite enough.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

The U.S. budget deficit surged past the $1 trillion mark in February, less than six months into fiscal year 2025.

As of Feb. 28, the federal government spent nearly $1.15 trillion more than it had collected since October, according to the Department of the Treasury. That’s about $318 billion more than in the same span last year, roughly 38% higher, and a record for the period, per CNBC. Since then, through March 31, the deficit has increased to nearly $1.31 trillion.

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So, how does the national deficit affect you? Let’s take a look at several factors that have contributed to the deficit and how it can impact the finances of Americans.

Contributing factors to the US deficit

Although the specifics may differ from time to time, a budget deficit occurs when tax revenue is lower than the amount being spent. Why is there a gap between money that’s coming in and going out? The calculation is primarily influenced by policies set by the president and Congress. It can also serve as a reflection of the overall health of the economy.

If the economy isn’t doing so well, businesses and individuals typically aren’t earning as much. Or, businesses may invest less into their operations and cut costs, which could lead to stalled growth and higher unemployment. With lower incomes from individuals or businesses, less taxes are collected. And if government spending doesn’t change, it increases the chance of a deficit.

But even if the economy is doing well, policies or legislation that increase spending can still result in a deficit. During the COVID-19 pandemic, increased spending from policies that offered relief to families and businesses led to a higher amount of spending. Even though government revenue was high, the increased spending resulted in a deficit.

In fact, over the last 50 years, the government has operated on a surplus only four times, most recently in 2001.

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This puts a lot of pressure on the way the government manages its finances. The U.S. Government Accountability Office (GAO) regularly audits the federal government’s financials. In an article posted Feb. 5, the GAO reported weaknesses at the management level that hindered the government’s ability to operate efficiently and address the country’s long-term financial health.

Some of these include financial management challenges at the Department of Defense, payment errors at several agencies and issues with supporting loan programs like ones through the Small Business Administration.

How the national deficit can impact your finances

The larger the deficit, the more likely the government needs to take on debt to make up for the shortfall, and like other borrowers the government needs to pay interest on its debts. According to the GOA, since 2017, the annual spending on net interest payments has more than tripled. To put it in perspective, in fiscal year 2024, more money was spent on net interest than national defense or Medicare.

If more revenue continues to be spent servicing debt, it could lead to drastic changes. Policies may be put in place to increase taxes or lower the amount of social services and subsidies currently available for Americans. But changes like these require government action, and you may not see this anytime soon.

In the meantime, preparing for rising prices is a smart move. Consider bolstering your emergency fund or padding your retirement savings, or finding ways to cut back in other areas to account for increased expenses.

Strategies to increase your income will help you to bear the brunt of any increased costs and make it easier for you to save and invest. Some best practices include negotiating a better wage with your current employer, finding a new job with a higher salary or working a side gig temporarily.

What to read next

• Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don’t have to deal with tenants or fix freezers. Here’s how
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• Trump warns his tariffs will spark a ‘disturbance’ in America — use this 1 dead-simple move to help shockproof your retirement plans ASAP

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.