If you’re worried about how the Trump administration’s tariff policy might affect your finances, you’re not alone. Tariffs are now the top concern among consumers, according to The Conference Board’s monthly Consumer Confidence Survey, published on April 29.
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You can’t control trade policy or its effects on the economy, but you can prepare your finances for whatever might come. In a recent episode of the “Legacy Investing Show” on YouTube, host Preston Seo shared five tips for protecting your money against price increases due to tariffs.
“Planning early does not just help you save; it gives you more options,” Seo said.
Your cash will lose purchasing power if tariffs cause inflation. So rather than sock cash away in a bank account, Seo recommended banking just 40% of it for basic expenses and 10% for extras. The other 50% should go toward investments that keep your money working for you.
Investing during uncertain economic times can be scary, but it can pay off in a big way.
A Fidelity analysis of Bloomberg Finance and National Bureau of Economic Research data showed that historically, investors who began buying stocks during recessions saw larger gains than those who started investing during non-recessionary periods. After one year, the recession investors saw 19% returns compared with 11.7% for non-recession investors, based on the S&P 500. The gap narrowed as time passed, but recession investors retained a 2-percentage-point advantage, on average, even 10 years later.
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Think about large expenses you might incur over the next few months and plan to make them sooner rather than later.
“Once tariffs ripple through the supply chain, prices begin to rise. Businesses rarely reduce prices once they’ve increased them,” Seo said.
He used a $1,500 air conditioner as an example of a purchase you might push up. If the unit is made with imported aluminum or copper components, the price could increase 10% to 20% by July, Seo said, adding $150 to $300 to your cost.
Seo called bitcoin a “hedge against uncertainty.”
“When the economy becomes unstable, whether due to interest rate changes, inflation or global tensions like tariffs, investors look for alternative stores of value. And that’s why gold and bitcoin both see increased demand,” he said.
