3 Poor Habits That Will Cause Your Expenses To Go Way Up When Tariffs Are Enforced

President Trump recently initiated a 10% tariff on all imports from China. 25% tariffs for imports from Mexico and Canada were also on the table but have been delayed by a month as the countries negotiate behind the scenes.

Trump used tariffs in his first term and that trend is continuing in his second term. The costs of some products and services may get more expensive due to those tariffs and it’s important to be prepared for that scenario. These are some of the money habits to avoid when tariffs begin to impact prices.

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Relying Too Much on Imported Goods

Clay Bethune is the CEO of Fintech Finance Group, a firm that launches, operates and scales a portfolio of brands and companies. He mentioned that people who primarily buy imported goods will be more impacted by tariffs.

“One of the smartest financial moves consumers can make during a tariff period is to focus on shopping local. Imported goods are often hit the hardest by tariffs, which means the prices can skyrocket,” he said.

“By supporting local manufacturers and retailers, you help reduce the impact of these rising costs and strengthen your community’s economy,” Bethune added. “Local alternatives may be just as good, if not better and can save you money while avoiding the sticker shock of tariff-driven price hikes.”

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Not Adjusting Your Budget

Another bad money habit Bethune mentioned is not adjusting your budget for higher costs. If you don’t review your expenses, the higher costs can catch you by surprise.

“Many consumers underestimate the impact tariffs will have on their spending. When tariffs drive up the prices of goods, you must reassess your budget to reflect those changes,” he explained. “Sticking to the same spending habits without adjusting for price hikes can lead to overspending, quickly resulting in debt. Being proactive with your finances will help cushion the effects of these economic shifts and keep you financially stable.”

If you don’t have a budget, you can check your previous bank account and credit card statements to gauge where your money goes. You can then decide which purchases you want to continue and which ones you can reduce. You might also find some monthly subscriptions for products and services that you no longer use.

Ignoring the Importance of Price Comparison

Keeping your options open can help you save money, as some merchants have better deals than others. Bethune advocates for price comparisons and explained that ignoring this step can result in a higher bill than necessary.

“With tariffs in place, it’s crucial to be diligent about price comparisons. Prices for certain goods will rise, but not all retailers will raise their prices at the same rate,” he said. “By actively comparing prices before making a purchase, consumers can avoid overpaying for the same item. This simple step can make a big difference, especially with everyday essentials or high-ticket items.”

You can find different prices for the same food if you shop at multiple grocery stores. The same concept applies to other industries, as some companies may need to run discounts to clear inventory, while others may not have much inventory of the same product.

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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