In an appearance on Fox News, Commerce Secretary Howard Lutnick made the Trump Administration’s position clear: “Rest assured, tariffs are not going away.”
The Administration has signaled that they will not extend the current 90-day pause on many tariffs. So how should American consumers prepare for a jolt in prices?
Trending Now: Mark Cuban: Trump’s Tariffs Will Affect This Class of People the Most
Try This: How Middle-Class Earners Are Quietly Becoming Millionaires — and How You Can, Too
Slash Spending Now
Don’t get caught flat-footed by price jumps. Start cutting back on spending now, to soften the impact when the worst of it hits.
“People often wait too long to pivot when it comes to their finances,” said Charles Hoff, financial education counselor at DFCU Financial. “Plan for the worst scenario now, which means cutting expenses to a level where you are living ‘well below your means’ so you can absorb increasing costs.”
Check Out: Trump’s Tariffs: Here’s What Economists Think Will Happen After the 90-Day Pause
Deepen Your Emergency Fund
As you rein in your spending, use the surplus to pad your emergency fund.
Robert Gabriel, financial specialist with healthcare platform Vosita, explained that most financial experts recommend emergency savings that can cover three-to-six months of living expenses. “With the volatility tariffs will create in the economy and prices, shoot for the upper part of that range. A well-cushioned emergency fund serves as a shock absorber against price hikes or possible income disruptions.”
Don’t just leave that cash losing money in an account earning no or low interest, either. Find a high-interest savings account that can hopefully keep pace with inflation or at least reduce the loss in purchasing power.
Invest In Inflation-Resilient Assets
Cash savings can help you survive an emergency like a health crisis or loss of income. But it won’t get you ahead.
Research inflation-resilient assets such as stocks, real estate and commodities. You don’t need to buy an entire rental property or a silo of grain, either. Explore passive real estate investments such as REITs and private equity real estate and ETFs or mutual funds that own commodities.
If you like bonds, look into I-bonds and TIPS, which adjust their interest payments based on the inflation rate.
Position Yourself To Earn More
If prices jump by 15% and you only get a 3% raise, you’ve effectively taken a 12% pay cut.
Start positioning yourself for a promotion and pay raise with your current employer if you enjoy working there. If not, start planning for a career move to do work you enjoy more and that pays better.
That might require additional certifications or credentials, which take time to earn. Again, start working on them now.
Pick Up a Side Hustle
To fill out your emergency fund and investment portfolio faster, consider adding a side hustle.
Ideally look for side hustles different enough from your day job that it doesn’t feel like work. For example, would you enjoy pouring wine at a local winery? Tutoring children or adults? Web design or social media marketing or freelance editing? Get creative with it and have fun.
The tariff turmoil isn’t over — it’s barely begun. Find ways to protect yourself from price shocks and possible recession and job loss or find yourself a victim of it in the coming months.
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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This article originally appeared on GOBankingRates.com: The Trump Administration Says Tariffs Aren’t Going Away: 5 Ways To Prepare Your Finances
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