Smart money moves to make, from experts

Throughout March, President Donald Trump enacted a number of tariffs, including a 20% blanket tariff on imports from China, a 25% levy on goods from Canada and Mexico that the Trump administration says are not compliant with the United States-Mexico-Canada Agreement, and a 25% tariff on all imported aluminum and steel.

Another round of tariffs with to-be-announced rates are expected to go into effect on April 2, and on March 30, Trump said those could include “all countries.” In recent weeks, though, the President has delayed some proposed tariffs or suggested he would be “flexible” on enforcement in certain cases.

Tariffs can cause prices to go up, but experts aren’t certain whether these will, or when, or by how much. The lack of clarity has lots of Americans on edge about the economy and rising prices: Consumer confidence for future conditions dropped to a 12-year low in March, according to the Conference Board.

“Recent events have people confused about how they can effectively budget because they do not know how the prices of things are going to change in the coming months,” says Lawrence Sprung, a certified financial planner based in Long Island, New York.

Here’s what you can do to prepare. 

You can’t control price swings or market volatility, but you do have some control over where your money goes, says Catherine Irby Arnold, senior vice president and Washington market leader for U.S. Bank.

“Sometimes we feel like we’re not in control and things are just coming at us, but it is really important to try to pick things that you can control and that you can make an impact and difference on at the moment,” she says.

Look at your monthly spending and ask yourself whether there are expenses you can cut, she suggests. Is it still worth it to pick up a $6 coffee several times a week, for example?

“For most people, the best response is simply to stay thoughtful,” says Jason Gilbert, founder and managing partner of RGA Investment Advisors.

Start by building flexibility into your existing spending plan, if you can. Whether you create a comprehensive budget or not, it’s smart to take stock of your monthly fixed costs and “see if there’s room to create a cushion,” Gilbert says.

Sprung agrees. “Flexibility is key right now,” he says.

“Keep your emergency fund healthy, avoid unnecessary debt and don’t let headlines drive your decisions,” Gilbert says. “Staying grounded financially is what creates peace of mind, no matter what the news cycle brings.”

Experts generally recommend having three to six months’ worth of expenses put away for emergencies. But they suggest it may be wise to add a little extra to that fund in case of major price changes that can make unanticipated costs — like getting your car repaired, or having to replace a computer or a phone — more expensive.

If you’re just starting to create this kind of fund, know that three to six months’ of expenses is a goal, and anything you can put toward a crisis can help. Only able to sock away $20 to $30 a month right now? That’s still worth saving, Irby Arnold says.

You can make the process easier by automating it. To do so, divert some of your salary straight to your emergency fund, if possible, Irby Arnold suggests. Setting that up “really serves two purposes,” she says. “It gets you into the habit of spending [only] what would you bring home and it forces you a to put that savings plan to work.”

In the face of uncertainty around tariffs or other price fluctuations, Sprung suggests thinking carefully about large purchases, such as cars, home appliances and repairs. It might be better to wait until you have a better understanding of how costs change, he says. 

“The tariff [enactments] have proven to be very fluid and consumers need to make an educated decision on whether they are willing to wait or not, if they can, and see if the tariffs do or do not get implemented and at what levels,” he says.

Many of Irby Arnold’s clients have begun pulling back and delaying large purchases, she says.

“There’s no real harm in that to your financial goals, to be hunkering down and being cautious,” she says. “That’s not going to hurt you, necessarily, as long as you’re investing in other places on a routine, regular basis.”

The best moves for you will depend on your personal situation. Consider seeking guidance from a financial professional. If you’re afraid your car won’t be functional much longer, it could be wise to shop for a new vehicle “sooner rather than later,” Sprung says, especially if you can find one at a price you’ve budgeted for.

“At the end of the day, [consumers] will be able to get the goods they need or want, but [may] need to pay more for them at a later date if the tariffs are implemented,” he says.

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