I’m a Financial Expert: Here’s 5 Ways to Adjust Your Spendings Due to the Impact of Tariffs and Inflation

On Apr. 2, President Donald Trump announced that global tariffs would be implemented on imported goods entering the United States. “Liberation Day” was designed to level the playing field as it relates to trade practices with other nations.

Historically, an increase of tariffs has triggered higher inflation, and this is a major concern for experts today. The relationship between tariffs and inflation is due to the potential increased expenses being passed onto the average consumer of a product that is shipped internationally. Such actions can contribute to great financial woes within a family.

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As a financial planning expert, here are five ways you can change your spending to avoid the potential impact tariffs may have on inflation.

Evaluate Your Debt

One of the biggest challenges with the implementation of tariffs causing inflation to rise is the effect it will have on interest rates. While it may not make economic sense to aggressively pay down debt, primarily consumer debt, during uncertain times, looking to shift credit card balances to zero percent vehicles makes sense. It will give you time to pay down the liability while keeping your expendable resources available as prices begin to increase.

Learn More: 4 Companies as Much as Tripling Prices Due To Tariffs

Review Your Monthly Budget

Identify your nondiscretionary versus your discretionary expenses to determine in advance what adjustments you are willing to make to maintain a comfortable standard of living.

Look for opportunities to review the monthly automatic payments for goods and services you don’t utilize consistently. Putting a temporary freeze on gym memberships that are not regularly used or other subscriptions you may not fully take advantage of are minor tweaks to your budget that can help you navigate through economic uncertainty.

Avoid Making Major Purchases Unless Necessary

While the United States remains the second-largest manufacturing country behind China, it has slowly transitioned from being predominantly manufacturing to a service-based economy. Therefore, one can expect goods and products to cost more.

For example, the automotive industry did an analysis indicating an increase in tariffs will detrimentally impact auto parts, even if car production is completed in the United States. This reality can impact jobs and the purchase of new cars.

If an individual must purchase a vehicle, you should consider used vehicles as a financially manageable option. However, if anyone can avoid making major purchases until an inflationary period cools, you would be better positioned to manage the higher tariffs.

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Purchase Essential Items in Bulk

Consider purchasing nondiscretionary, basic essential items in bulk to reduce the overall cost of the item and save money along the way. Generally, when a family eats out, the cost associated with dining out can be significant.

Purchasing groceries and other necessities in bulk will allow a family to purchase more items at a lower cost. If one considered using coupons and rebates as well, it can truly add increased savings over time.

Purchase Domestically

Spending your money locally benefits local entrepreneurs and may potentially avoid the impact of tariffs.

However, keep in mind that a local vendor may pass on their expenses to the consumer to stay in business. If the entrepreneurs’ cost of doing business increases because of tariffs, then the business owner may have to increase their prices to stay afloat. However, your willingness to support local vendors will help companies stay in business.

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This season of economic uncertainty can become quite overwhelming. However, making minor adjustments and sitting down with a financial professional can truly ease your financial anxiety. Take a moment to review your financial status so that you can always maintain and improve your standard of living.

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This article originally appeared on GOBankingRates.com: I’m a Financial Expert: Here’s 5 Ways to Adjust Your Spendings Due to the Impact of Tariffs and Inflation