Tariffs are frightening. Should you buy or save money now? The expert said it depends on
Prices are already high and tariffs may make them higher. This is a terrible prospect. But it’s time to be prepared, not panic.
It’s time to evaluate your long-term goals and expenses and find ways to reduce non-essential purchases, said Shang Saavedra, founder of Save My Cents. This doesn’t mean you should cut everything you like, but if you’re worried that higher prices will affect them, you should put your financial goals in perspective.
“Tariffs hurt everyone, so everyone is on the same boat,” Savedra said. “If our income isn’t that fast, we all have to do it.”
But, how did you do it? Should you cancel your summer vacation? Working in a second job? This is what you need to know now.
Read more: Understanding the phone tariff: See how much iPhone prices may rise
Should you save or buy now?
The biggest question is, should you buy now or save money in preparation for a more expensive purchase later?
“Look at what you spend money and ask yourself what it costs to maintain a healthy life,” Savedra said. Consider essentials like housing, transportation, health care and food. “While it’s still good to save money there, you don’t want to reduce the amount of harm you.”
Savira said it could be difficult to make the decision, as news surrounding the tariffs continues to evolve. She noted that tariffs have been met now, but manufacturers need time to decide when — or whether price increases will be implemented.
“I can buy things now, but I don’t want you to panic.” This usually leads to uninformed, hasty decisions. Plus, you may buy things you won’t exactly like for a long time, she said.
If you are already planning on making a purchase and financially prepared for it, you can buy it now – especially if you are worried about price increases in the coming months. But don’t buy on a whim just because of potential price increases.
Whether you are using funds to store items or save items now, make sure you keep a close eye on your budget and other financial goals. With adequate contingency funds and money still is crucial for any upcoming expenses you know.
Where you save money is important
If you have the opportunity to need money in the near future, keep it in a high yield savings account. Currently, the average annual percentage yield is about 4%, about 10 times the national average savings rate. You can also use your money easily when you need it.
Many high-yield savings accounts also have features that can help you maintain your savings goals.
“Some accounts allow you to allocate your goals to your money without having to open many accounts, so I recommend the most,” Saavedra said.
