President Donald Trump has talked about how tariffs will help strengthen the American economy and jobs. But critics have expressed concerns about how those tariffs may impact everyday consumers and their family finances.
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Economic experts have put out estimates that the tariffs could cost the average family anywhere from a few hundred dollars to thousands of dollars each year in additional expenses, as NPR reported. No matter how the tariffs may end up affecting your bank account and paycheck, here’s what some financial experts say are good steps to take.
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Take Stock of Your Spending
Dr. Annie Cole, a financial coach and founder of Money Essentials for Women, said one of the first steps to take is to focus on adjusting your overall spending habits.
“Focus on the biggest spending categories first, which include housing, car payments or transportation and groceries,” said Cole. “Then, explore ways to cut non-essentials such as travel and dining out.”
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Reassess Your Monthly Budget
“A 25% hit to your paycheck means your cash flow needs a reset,” said Christopher Stroup, founder and president of Silicon Beach Financial. “Identify fixed versus flexible expenses and prioritize your necessities accordingly. It’s important to automate savings for non-negotiables like taxes and emergency reserves while putting discretionary spending under the microscope.”
Pivot Strategically With Investments
Per Stroup, cutting investments during times of economic pressure can backfire.
“Instead, redirect savings to high-impact areas such as tax-advantaged accounts, low-fee index funds or even your own business,” he said. “A downturn might actually be the best time to buy when you have the right strategy in place. Volatility creates opportunity when your plan is built for it.”
Find Professional Help
Cole said this could be a good time to seek the advice of a financial planner or advisor. They can help you to create a holistic financial plan for the long run that includes your career plans, any income changes and spending plans, along with debt, investments and retirement options.
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Sources:
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NPR, “Here’s how Trump’s tariffs could cost you and your wallet”
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Dr. Annie Cole, Money Essentials for Women
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Christopher Stroup, Silicon Beach Financial
This article originally appeared on GOBankingRates.com: What Would You Do If Tariffs Took 25% More of Your Paycheck?
