How the debt ceiling affects your money, according to financial pros

How the debt ceiling affects your money, according to financial pros

The U.S. hit the debt ceiling on Thursday, which compelled the Treasury Department to start taking so-called “extraordinary measures” to proceed paying the authorities’s payments.

Treasury Secretary Janet Yellen told lawmakers on Jan. 13 that these short-term strikes, together with suspending reinvestment in the office retirement plan for federal staff, may permit the authorities to pay its obligations till June, after which the U.S. could be in peril of defaulting on its debt.

Putting the politics of it apart, chances are you’ll be questioning the million-dollar query: Is this example doubtless to have a long-term impact on my cash?  

“In a phrase, no,” says Brad McMillan, chief funding officer for the Commonwealth Financial Network.

Of course, it is a bit of extra nuanced than that. Read on for the solutions to the most relevant questions about the debt ceiling, and why, as a long-term investor, you should not be paying an excessive amount of consideration to the headlines.

Remind me — what’s the debt ceiling once more?

Where does the debt ceiling stand now?

What may occur as the U.S. approaches a default?

And if the U.S. really defaults? Then what?

But there could be financial penalties, proper?

So why should not I be apprehensive?

I live in an airplane in the woods for $370/month — take a look inside