3 ways to protect your money if the U.S. defaults on its debt (2024)

FAQs

3 ways to protect your money if the U.S. defaults on its debt? ›

That means tamping down on excess spending, making a budget, and shoring up emergency savings to cover at least three months of living expenses. Since a debt default would likely send interest rates soaring, any credit card debt you're saddled with may soon cost you more.

Our national debt would not crash - the value of our dollar would crash, and it might be permanent. The safe haven would be to buy gold and silver rounds, but the government may eventually outlaw the ownership of gold.

List your debts from highest interest rate to lowest interest rate. Make minimum payments on each debt, except the one with the highest interest rate. Use all extra money to pay off the debt with the highest interest rate. Repeat process after paying off each debt with the highest interest rate.

Tried and true basics. "We're advising people to prepare for a potential default as you would for an impending recession," says Anna Helhoski of NerdWallet. That means tamping down on excess spending, making a budget, and shoring up emergency savings to cover at least three months of living expenses.

For many, the best solution is to strike a balance between saving money and paying off debt. “The choice of debt repayment or savings is not an either-or proposition,” says Greg McBride, CFA, Bankrate's chief financial analyst. “You can, and should, focus on both at the same time.

How to solve the US debt crisis? ›

An important way to tackle America's debt problem is to devolve a large part of federal spending to the states, allowing them to fund it themselves. The federal government spends more than $1 trillion a year on state and local activities such as education, housing, and transportation.

In total, other territories hold about $7.4 trillion in U.S. debt. Japan owns the most at $1.1 trillion, followed by China, with $859 billion, and the United Kingdom at $668 billion. In isolation, this $7.4 trillion amount is a lot, said Scott Morris, a senior fellow at the Center for Global Development.

Tax cuts, stimulus programs, increased government spending, and decreased tax revenue caused by widespread unemployment generally account for sharp rises in the national debt. Visit the Historical Debt Outstanding dataset to explore and download this data.

A15: If a money market mutual fund held securities on which the U.S. Treasury defaulted on the payment of interest or principal, then the fund would need to sell those defaulted securities, unless the fund's board of trustees determines that disposing of the securities would not be in the best interests of the fund.

While no one knows precisely what a default would entail, consumers can rest assured that their Treasuries and certificates of deposit are reasonably safe.

By holding your lump sum in a cash savings account, as opposed to investing it in the stock market, you won't run the risk of your money falling in value just before you need to access it.