7 Things To Do With Your Money If Tariffs Are Making Your Lifestyle Harder To Afford
Written by
Jordan Rosenfeld
Edited by
Molly Sullivan
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If the tariffs that President Donald Trump has promised on many of the country’s trade partners go into effect, many goods and services will likely become more expensive. For some Americans, their lifestyles may become harder to afford.
Experts recommended some money moves to make to adjust to a high-tariff environment.
Track the Impact of Tariffs
If your everyday costs are rising due to tariffs, it’s important to track your expenses because tariffs are probably not affecting all your purchases in the same way, according to Aaron Razon, a personal finance expert at Coupon Snake.
Tracking will enable you to identify the specific items and categories that are the most affected by the tariffs, and show where cutbacks may be necessary, he added.
Another step is to segment your spending into “fixed,” “variable” and “postponable” categories, according to Sara Levy-Lambert, head of growth at Awning.
She explained, “I once rewrote my own household budget this way, during a 2018 spike in fuel and import prices, and discovered that we were able to defer almost 15% of monthly outgoings without noticing the difference.”
Seek Alternatives
You don’t have to abandon everything you purchase, but it is a good idea to anticipate what will immediately get more expensive. The areas of household budgets that will likely be hardest hit by tariff-related inflation are household goods, clothing and textiles, food and beverages and electronics, Razon said. So the best way consumers can adjust their spending habits without sacrificing their quality of life is to consider cost-effective alternatives for these items.
Consumers could look to buy secondhand or refurbished items on places like Facebook Marketplace, local “Buy Nothing” groups and consignment stores, Levy-Lambert said. And of course, you’ll save money by making certain lifestyle adjustments like cooking at home as opposed to dining out, Razon pointed out.
Opt For Domestically Made
Another option is to “lean into domestically produced substitutes, which might now be roughly equivalent in price due to the tariffs on foreign products,” Levy-Lambert said. These products may also become more affordable over time.
Otherwise, if you were planning to purchase a big-ticket item like a car, a major appliance or sports equipment, delay your purchase until tariffs drop or cheaper alternatives come around, Razon said.
Shift Investments Away From Risk
If you’re encountering economic strain that’s tied to tariffs, you may want to revisit your saving and investing strategies, Razon said, moving anything that’s invested in risky or volatile ways to assets that are more stable.
However, Levy-Lambert recommended that if your investments are relatively stable, don’t make any “dramatic changes” based on tariffs.
“If your budget is so tight that you are relying on high-interest debt, then yes, reallocating from low-yield savings to pay off that debt may be beneficial,” she said. Most retirement accounts average out over time.
Review and Renegotiate Bills
While it can be frustrating to have to give up an aspect of your lifestyle due to financial strain, you might be able to keep some of the enjoyable parts by negotiating bills and finding better deals.
Most folks have no idea how negotiable their “fixed” expenses are, Levy-Lambert said. Internet, insurance, cellphone plans, even gym memberships often have retention departments that can offer you better rates.
“A client of mine called her cable company recently to downgrade a plan and was offered a 20% discount, simply for asking. Surviving economically necessitates negotiating,” she said.
Engage In Goal Stacking
If you’re overwhelmed by where to even start making changes, Levy-Lambert suggested using “a goal-stacking approach.”
“Focus with intensity on one priority, such as credit card debt, and automate small contributions to the others.
Even $25 a month deposited in a high-yield savings account helps keep the momentum up, she said, because when things are tight, “momentum counts more than magnitude.”
Make a Mindset Shift
Lastly, a lifestyle adjustment may follow more easily when you first make a mindset shift.
When the cost of living keeps creeping up, one mindset shift that may help people stay financially focused is putting your energy into that which you can control, Razon said, “things like their spending habits, savings strategy and budget.”
Additionally, Levy-Lambert recommended changing “a scarcity mentality into resourcefulness.” This can mean that instead of thinking about what you can’t afford, think instead about your options, such as bartering, DIY, community support and habit swapping.
“As I often remind people, adaptability is the real currency of resilience. When you no longer expect life to remain the same and implement systems that thrive under pressure, you regain control, even amid rising prices,” she said.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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