How to Safeguard Your Finances Amid Rapidly Changing Economic Policy

As economic policies change at a rapid pace, experts say there are ways to protect your personal finances and ensure you’re prepared for whatever comes next.

President Donald Trump’s administration has implemented several economic policies in the two weeks since inauguration that have been challenged, rescinded, or delayed within hours of being announced.

Notably, 25% tariffs on imports from Mexico and Canada were delayed just hours before they were set to be imposed, and they are still a possibility. Last week, a widespread pause on federal funding and massive buyout proposals to large swaths of federal employees aimed to decrease government spending. The funding freeze was quickly rescinded after the backlash, and the effects of the employee buyouts have yet to be seen.

It can be difficult for Americans to create financial plans when the future of economic policy is uncertain. Experts suggest reviewing budgets and increasing emergency savings to protect your money from the unknown.

What To Do If You’re Concerned About Higher Prices

Although tariffs could increase the price of imported goods such as electronics, groceries, auto parts, and more, this is not the time to panic and stockpile goods, said Harmon Kong, CFP and founding principal of Apriem Advisors, a financial and investment management company.

“It’s always wise and good personal financial management to have some degree of margin within your budget for emergencies such as rising costs,” Kong said. “If you do find, as you’re going through this, that there are certain imported products that you spend more on, you may have to consider factoring in that cost. Are there alternative purchases you can make?”

In some scenarios, American consumers may want to buy bigger ticket items that could increase in price due to tariffs, said Patti Brennan, CFP and CEO of Key Financial, a wealth management company.

“If an individual knows that they’re going to need a new car or a big ticket item of some sort and if it’s already in the plan, sure go ahead and accelerate those purchases to avoid the higher prices,” Brennan said.

To get a better idea about the future of tariffs, American consumers and investors should be looking into whether the Mexican and Canadian governments are following through with their negotiations with Trump, Brennan said.

“Words are one thing; actions are quite another,” Brennan said. “If it’s just words, higher prices are sure to be right around the corner.”

What To Do If You’re Concerned About Income or Benefits Shocks

Policy proposals may affect the jobs of a portion of more than 3 million federal workers and an estimated 3.5 million tied to trade from the countries that could be targeted by tariffs.

The emphasis on cutting government spending has also left programs like student loan income-driven repayment plans and forgiveness programs in limbo. Beneficiaries of other programs—like Supplemental Nutrition Assistance Program (SNAP) and Medicaid,—were worried the federal spending cuts could reduced the amount of subsidies they receive.

One way to prepare is to implement a “stress test” when adjusting your budget, Kong said. This can involve extreme scenarios, such as the loss of a job or an essential federal program, or simpler changes, such as a slight inflation increase or decreased tax deductions.

“What do you have in an emergency fund for continuities, such as a loss of job? Maybe you work for a government agency that’s about ready to get cut,” Kong said. “I think good financial management is really the heart of how to navigate all kinds of things like what we’re experiencing today.”