How to handle your money during tariff uncertainty

Summary

Life Kit Podcast Summary: "How to Handle Your Money During Tariff Uncertainty"

Release Date: April 28, 2025
Host: Marielle Segarra
Guest: Lauren Williams, Certified Financial Planner and Olympic Gold Medalist
Duration: Approximately 19 minutes

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Introduction

In this episode of Life Kit, host Marielle Segarra delves into the challenges of managing personal finances amidst economic volatility, particularly focusing on the uncertainty surrounding tariffs. With the economy feeling unpredictable and news cycles emphasizing instability, many listeners seek guidance on maintaining financial health. Marielle welcomes Lauren Williams, a certified financial planner and Olympic gold medalist, to provide expert advice on navigating these turbulent times.

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Managing Information Overload

Lauren Williams begins by addressing the psychological impact of constant exposure to economic news and social media. She emphasizes the importance of mental well-being alongside financial health.

"Your mental health and self-care are as important as your financial health and the actual quantitative things."
— Lauren Williams (02:32)

Key Points:

• Limit Media Consumption: To prevent anxiety, it's crucial to take breaks from news and social media that may contribute to information overload.
• Supportive Environment: Surround yourself with positive influences to maintain a balanced outlook during uncertain times.

Takeaway 1: Tune into the economic news as needed but step back when it becomes overwhelming. Focus on your financial plan without getting distracted by every headline.

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Avoiding Financial Scams

In periods of economic uncertainty, fraudulent schemes often surge as scammers exploit people's fears and confusion.

"Be really careful of things that sound too good to be true, because they generally are."
— Lauren Williams (07:15)

Key Points:

• Verify Credentials: Always check the legitimacy of organizations and individuals offering financial advice or services.
• Beware of High-Pressure Tactics: Scammers often push for quick decisions or guaranteed returns, which are red flags.
• Specific Scam Examples: Lauren highlights tariff-related scams targeting small business owners and online consumers, urging listeners to remain vigilant.

Takeaway 2: Stay alert for financial scams, especially those exploiting current economic policies like tariffs. Always verify the authenticity of requests for money or personal information.

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Building Emergency Savings

One of the fundamental strategies for financial resilience is establishing a robust emergency fund.

"You need to have that cash available because you can't call the debt agency that you've been paying and say, 'Hey, I paid $500 last month and I only meant to pay $25.'"
— Lauren Williams (12:43)

Key Points:

• Automate Savings: Set up automatic transfers to a separate savings account to consistently build your emergency fund.
• High-Yield Accounts: Opt for accounts that offer better interest rates, enhancing the growth of your savings.
• Accessibility: While accessibility is important, limiting easy access can prevent the temptation to dip into these funds for non-emergencies.

Takeaway 3: Aim to save at least six months' worth of expenses in a high-yield savings account. Automate your savings and keep the funds in a separate account to avoid unnecessary withdrawals.

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Managing Debt Payments

Balancing debt repayment with saving can be challenging, especially when building an emergency fund.

"If you're paying $500, maybe you start paying $250 so that you can put $250 into your emergency fund."
— Lauren Williams (14:15)

Key Points:

• Minimum Payments: Continue making minimum debt payments to avoid penalties and protect your credit score.
• Adjust Payments Temporarily: Consider reducing debt payments slightly to allocate more funds towards savings during uncertain times.
• Prioritize High-Interest Debt: Focus on paying off debts with the highest interest rates first to minimize overall interest payments.

Takeaway 4: If you're still building your emergency fund, it's advisable to reduce debt payments moderately while ensuring that you continue to meet minimum obligations. This strategy preserves cash flow for emergencies.

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Retirement Savings Strategies

Economic volatility can instill fear about the security of retirement savings, especially for those close to retirement age.

"Don't get panic. Think about what we're trying to do 20 years from now."
— Lauren Williams (15:05)

Key Points:

• Seek Professional Advice: Those nearing retirement should consult a financial planner to ensure their investment strategies are appropriately balanced.
• Long-Term Focus: Younger generations should maintain their long-term savings strategies despite short-term market fluctuations.
• Continue Investing: Avoid withdrawing from retirement accounts during downturns to benefit from potential future growth.

Takeaway 5: If you're within five years of retirement, hire a fee-only, certified financial planner to review your portfolio. For those with longer horizons, maintain your investment strategy and focus on long-term goals.

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Navigating Tariff Purchases

Tariffs can influence consumer behavior, leading to decisions about purchasing goods before price increases.

"Nobody knows exactly how things are going to shake out when it comes to tariffs."
— Lauren Williams (19:03)

Key Points:

• Assess Necessity: Before making purchases influenced by potential tariff-induced price hikes, evaluate if the item is a genuine need.
• Avoid Hoarding: Resist the urge to buy items speculatively, which can lead to unnecessary spending and financial strain.
• Economic Adjustment: Understand that the economy will adjust to new tariff structures over time, and price fluctuations are part of that adjustment.

Takeaway 6: Purchase only what you need and can afford, regardless of potential future price changes due to tariffs. Avoid speculative buying based on uncertain economic forecasts.

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Conclusion and Recap

Marielle Segarra wraps up the episode by summarizing the key takeaways:

1. Manage Information Intake: Stay informed but avoid excessive exposure to stressful news.
2. Guard Against Scams: Be vigilant and verify the legitimacy of financial opportunities.
3. Establish an Emergency Fund: Save diligently to prepare for unforeseen circumstances.
4. Balance Debt and Savings: Adjust debt payments as needed to prioritize financial stability.
5. Plan for Retirement Wisely: Seek professional guidance if retirement is near; maintain long-term strategies otherwise.
6. Make Informed Purchase Decisions: Buy based on necessity, not fear of future price increases.

Lauren Williams provides actionable advice aimed at empowering listeners to maintain financial health amidst economic uncertainties, emphasizing control, preparation, and informed decision-making.

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Produced by: Claire Marie Schneider
Visuals Editor: Beck Harlan
Digital Editor: Malika Garib
Supervising Editor: Megan Keane
Executive Producer: Beth Donovan
Engineering Support: Zachary Coleman

For more insights, explore other episodes of Life Kit at npr.org/lifekit or subscribe to the newsletter npr.org/lifekitnewsletter.

Transcript

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[Marielle Segarra]

You're listening to Life Kit from npr. Hey everybody, it's Marielle. I looked at the word volatile today. If you've been watching the news, you've probably heard that word a lot in relation to the economy and the stock market. And when you hear a word enough times, it can lose its meaning, right? It just kind of breezes past your ear. So here are some synonyms. Unpredictable. Erratic. Tempestuous. Turbulent. Fitful. Yeah, it definitely feels that way. If you have money in an investment account, or if you're a federal worker bracing for possible layoffs, or if you're tuned in to the ever changing details about what tariffs we're putting on which goods from which countries and how that's going to affect prices. It's a lot. So how can we think about our finances in such a volatile time? We can start by taking a deep.

[Lauren Williams]

Breath, take social media and news breaks if you need to. Take care of your mind and your body and make sure that you're creating a supportive environment around you. If everybody around you is doom and gloom, that's also going to affect your attitude.

[Marielle Segarra]

Lauren Williams is a certified financial planner and an Olympic gold medalist, by the way. Her firm is called Worth Winning.

[Lauren Williams]

Your mental health and your self care is as important as your financial health and the actual quantitative things.

[Marielle Segarra]

On this episode of Life Kit, I talked to Lauren about that and about the quantitative things like how to Avoid financial scams, build up your emergency savings, think about your retirement fund and decide whether to buy something in this moment.

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[Financial Expert]

This is a time of uncertainty in the economy. We have experienced many of those in the past few years, the past decade, the past 15 years. I mean, it's happened over and over again for different reasons. What do you tell your clients when they come to you? Because I imagine they come with questions, whether it's about their retirement accounts or just like fears in general about not knowing what's gonna happen.

[Lauren Williams]

Yeah, the first thing I like to talk to my clients about is the idea not getting sucked into information overload. Generally, when you have a financial professional in your life, you have a plan. So you've organized your finances as best you can. But it's still very scary when you start to hear all the things that are happening in the news. So the first thing I say is be careful about information overload. So whether that's news and social media, these group chats, all sorts of different things that are inciting fear and making you kind of second guess your plans, maybe drown out some of that noise by unfollowing, you know, not watching, limiting the amount of time that you're watching, not getting sucked into the black hole that is noise and chatter via the various news outlets is kind of thing.

[Financial Expert]

Number one, that feels like there's value to that too, even if you're not working with a financial professional.

[Lauren Williams]

Absolutely. I would say that it is relevant for everyone because like I said, the news is, you know, just constant, constant information and you're trying to educate yourself, but also the education is coming from so many different places and a lot of it is doom and gloom. And the best thing to do is kind of sit still, understand what is happening, and then when you absolutely know what's going on and you can govern yourself accordingly, make the changes, that's when you take action. You don't just panic and start changing your plan without actually any of this stuff having truly taken place.

[Marielle Segarra]

All right, takeaway one. Tune into the economic news as much as you need to stay informed, but also let yourself step back when it's no longer helpful or when it's making you anxious. Remember, the details about economic policies like tariffs are constantly changing. You may not need the play by play. And don't let what's going on today throw you off your path and your financial plan.

[Lauren Williams]

The other thing I would say that you need to do is be careful of scams because there is so much more information going out in times of uncertainty. People are trying to take advantage of that. And so scams ramp up at times like this via financial influencers, get rich quick schemes, you know, recession proof your finances in three easy steps. Just give me 2,000 bucks. Be really careful of things that sound too good to be true, because they generally are. You know, the way to avoid these scams is think about things like the credentials. You know, do some background checks on the organization before you send money off to it. You know, look at the link. Is it a.com or.org? does it have any weird letters afterward or in between that might, you know, it might be a fake website that looks like a real website, but asking about the credentials, looking at the experiences, verifying that it is like a registered agency. And like I said, avoiding people who are going to guarantee you that everything's going to be okay or you're going to get certain returns, or they're pressuring you to take quick action.

[Marielle Segarra]

Takeaway 2. Be on the lookout for financial scams. These can ramp up during times of uncertainty, when economic policies are changing quickly and there's a lot of confusion. One example are tariff scams. Small business owners have been getting messages claiming they owe tariff fees to the government and customers are getting messages saying they need to pay tariffs to release a product they ordered online. These are fraudulent, by the way. We have a whole episode about financial scams and how to avoid them. So check that out.

[Financial Expert]

What else would you tell your clients in this moment?

[Lauren Williams]

Focus on what you can control. There are so many variables that are beyond your control and those are the things we're fixating on, the what ifs. But if we focus on what we can control, that brings our anxiety levels down. It makes us feel a lot better about the possibilities of what could happen in our particular situation. And so one, continue building your emergency fund and your short term savings. People get tired of hearing about the emergency fund, but I guarantee someone listening today still has not taken the time to actually build one up appropriately. And that could be the game changer. Because if the economy is as bad as we think it is, or if things are going as bad as the world is saying it's gonna go, what are you gonna need? Something to kind of help you bridge the gap. If it's inflation, whether it's a layoff or some other emergency, you need to have that cash on hand to be able to get you see you through the tough time. And I usually say that you need to have an emergency fund of at least six months and then you can bump up to 12 months. If you're single, if you're a business owner, if you are the breadwinner for your family, if you're in a more risky job, or if you feel like you're at risk of being laid off.

[Financial Expert]

And how do we build up our emergency savings?

[Lauren Williams]

The easiest way to build up your emergency savings is automate your savings. So put something automatically into a savings account. I always also recommend that you use a savings account that's separate from your main banking. So if you bank at a, you know, a big bank where it's easy to have two or three savings accounts, there's ATMs all over the place. Maybe try a high deal savings account that's only online so that you can move your emergency fund to a separate place. You're not looking at it every time you log in. And it might take a couple days to transfer, which, you know, some people are like, oh my goodness, but what if it's an emergency? I need that money right now. You keep a little bit of money in your savings, you know, your main bank savings to get you going. And it usually only takes a day or two to get money, you know, transfer money from that outside bank into another bank. But you don't want to have the temptation of being able to see this big number of cash and easily transfer over like, oh, well, I just want to go to this nice dinner this weekend. Or, you know, we start justifying reasonings and we make those transfers and before you know it, we're using our emergency fund for not emergencies.

[Financial Expert]

Right? You want to keep it sort of locked away with double locks on it almost exactly.

[Lauren Williams]

You want, you want to have access to it, but you don't want to give yourself too much access to that emergency fund.

[Marielle Segarra]

Takeaway 3. Build up your emergency savings. Lauren recommends having at least six months of expenses saved up. And if that feels totally out of reach, take this one day and one month at a time. It all adds up. Also, look for a high yield savings account so you'll earn more interest on your money. And consider putting the bulk of that money in an account where it'll take a few days to transfer the funds. That can help you stop from dipping into that account casually or for non emergencies.

[Financial Expert]

I imagine you might also need to if you find that you're not saving money in the month, you might need to look at what you could cut back on to help you build that.

[Lauren Williams]

Absolutely you're spending right now in this uncertain economy is something that you can absolutely control yourself. So not buying things that you don't need, consider kind of holding off on large purchases that aren't necessary, promotional emails unsubscribing and things like that that make you just click and purchase. You can't be anxious about, oh my goodness, the economy is in doom and gloom, but also continuing to do what you would regularly do when you felt like the economy was in good place.

[Financial Expert]

Now, what about in a moment like this if you have some debt that you've been trying to pay off but you don't have your emergency savings where you want them?

[Lauren Williams]

Yeah, this is a great question. Like I said, in times of uncertainty, you might want to go to just making the minimum payment on your debt. It's a great idea to have a goal at the beginning of the year to pay off debt by X amount a day in this amount of time, or to be able to put this amount towards your debt. But in a time of uncertainty and if you feel like there's a possibility of being laid off or that you know something major is going to happen economically where you're not going to be able to be in the same financial situation as you had hoped, you're going to want to have those dollars in your pocket because you can't call the debt agency that you've been paying and saying, hey, I paid 500 last month and I only meant to pay, you know, I only could have paid 25. Could you give me the other 475 back? Because I got another emergency going on. Once you've paid, that money is gone and out of your pocket. So maybe you ratchet down for this, you know, short period of time to just paying a minimum or a little bit over the minimum. You know, if you're paying 500, maybe you start paying 250 so that you can put 250 into your emergency fund, which I'm a big proponent of. Even when you have debt and you know we're not in times of uncertainty, you should also be saving. So to be putting more money toward debt when you don't have an emergency fund is not the ideal scenario. You should always be putting something aside for yourself because what happens if you have an emergency while you're focusing on your debt? You go into more debt because you don't have the emergency savings. So you always want to be splitting between the two and trying to pay down debt and also build the emergency fund.

[Marielle Segarra]

Takeaway 4. If you haven't finished building up your emergency fund, consider cutting back on debt payments. And in times of economic uncertainty, you want to make sure you have cash available. Now you should keep making the minimum payments on your debt. And keep in mind that when you make this change, it is going to take you longer and probably be more expensive to pay off the debt in full. In general, one thing you can do to minimize interest is to pay off your highest interest rate debt first.

[Financial Expert]

Let's talk about retirement savings. This is a fear for a lot of people right now that with the market volatility that their retirement accounts, their retirement savings are going to get at least partially wiped out. And especially if you're someone who's close to retirement, that's, that's super scary. What do you say to clients who are in this situation?

[Lauren Williams]

Yeah, if you are close to retirement, I think this is the Time to invest in a financial professional to make sure that you are properly balanced and that you are on track. When retirement is three years out, five years out, you have a really short time frame. And these swings in the economy can affect you more than they would affect a millennial or Gen Z person. And so you want to really focus in on what can I do to create a buffer so that I'm not hit really hard as I get prepared for retirement. Yeah, for the other generations, we're not really that close to retirement. And so you need to focus on the long term. Don't get panic. Think about what we're trying to do 20 years from now. These swings that are happening in the environment on a day to day basis are not going to affect your long term outcome. We need to be focused on, hey, I got to continue to save, I got to continue to get ready. Maybe, you know, I said it, I got a recession proof myself in the form of getting ready for inflation. So I ratchet down my retirement savings a little bit. But you definitely don't want to stop it because when these, when we're taking these big swings down, you're buying at kind of a discount. And so by you not being able to participate in the market, you're not being able to continue to grow so that when the market swings back up, you can take advantage of that. So don't change your plan as a millennial or Gen Zer. But if you're Gen X or Baby boomer, and like I said, you're a lot closer to retirement, you definitely want to check in on your portfolio.

[Marielle Segarra]

Takeaway 5. If you're within about five years of retirement, now would be a good time to hire a financial planner if you don't already have one. Look for someone who is fee only, meaning you pay them for their time like you pay a lawyer or an accountant. If you use someone who makes a commission based on your investments, they may have an incentive to give you advice that benefits them them, but not you. Also make sure the person is licensed to give you financial advice. Lauren recommends finding a certified financial planner or CFP among other things. As part of their certification, they agree to act in the best interest of their clients at all times. When providing financial advice, you can find CFPs [e-mail] now. If retirement is farther away for you, you don't have to keep checking on your retirement accounts and following the ups and downs.

[Financial Expert]

Okay, let's talk about tariff purchases. Some folks are saying, oh my gosh, like there are all these tariffs now on different items and the prices are bound to go up. So I should buy those things now before the price jumps up. Do you have any advice around this?

[Lauren Williams]

I think we need to focus on controlling what we can control as it relates to tariffs. You can't control the tariffs. And if the whole economy needs to adjust and have new pricing based on these tariffs, if they're not going away, if this is not a short term or temporary thing that is coming into play, then as we've always done in the past, we will adjust. The economy is going to have to kind of adjust and settle to these tariffs if they are here to stay. There are many that are of the opinion that tariffs may just be here temporarily and that this may not be a long term fix that's going to work out. That is also a possibility. But the biggest piece of the puzzle as it relates to your spending is focusing on what you can control once again and deciding do I need this item regardless of the tariff? If I need a new car because I can't get from work and I can't earn a living because I can't get to work because I don't have the car, then you might need to purchase right now. You could wait it out and tariffs go away and car prices go down, or you could say, let me get my car immediately because the tariffs could actually make this worse and I'm afraid of prices going up. The reality is none of us know for sure and so think about what you actually need and only purchase those things that are necessities.

[Marielle Segarra]

Okay. Takeaway 6. Nobody knows exactly how things are going to shake out when it comes to tariffs. Not me, not you, not even the experts. If there's something you need and you can afford, buy it. Don't buy things you don't need or want just because they may go up in price later.

[Lauren Williams]

Don't start hoarding items or spending, you know, dollars on big ticket items, thinking, let me shield myself now for something that might be coming in the future when you're not really sure about it and you don't necessarily need that item in this particular moment.

[Financial Expert]

Lauren, thank you so much.

[Lauren Williams]

My pleasure.

[Marielle Segarra]

Okay, time for a recap. Takeaway 1. Allow yourself to step back from the news when it's no longer helpful and remember the details about economic policies like tariffs are changing a lot. You probably don't need the play by play. Takeaway 2, Be on the lookout for financial scams. These can ramp up during times of uncertainty when economic policies are changing quickly. Takeaway 3 Build up your emergency savings, Lauren recommends having at least six months of expenses in a high yield Savings account. Takeaway 4 if you haven't finished building that emergency fund, consider cutting back on debt payments. You should keep making your minimum payments though. Takeaway 5 if you're within about five years of retirement, consider hiring a financial planner. If you don't already have one, look for someone who is fee only, meaning you pay them for their time like you pay a lawyer or an accountant. And also make sure the person is licensed to give you financial advice and is a fiduciary. If retirement is farther away for you, stop checking your retirement accounts right now. Step away from the computer and takeaway 6 nobody knows exactly how things are going to shake out when it comes to tariffs. So if there's something you need and you can afford it, sure, buy it. But don't buy stuff you don't need or want just because you think the price might go up later with tariffs. For more Life Kit, check out our other episodes. We have one all about credit cards and another about how to take your dream vacation. You can find [e-mail] LifeKit and if you love Life Kit and want even more, subscribe to our [e-mail] LifeKitnewsletter Also, we love hearing from you, so if you have episode ideas or feedback you want to share, email [e-mail] this episode of Life Kit was produced by Claire Marie Schneider. Our visuals editor is Beck Harlan and our digital editor is Malika Garib. Megan Keane is our supervising editor and Beth Donovan is our executive producer. Our production team also includes Andy Tagle, Margaret Serino, Sam Yellowhorse, Kessler and Sylvie Douglas. Engineering support comes from Zachary Coleman. I'm Marielle Segarra. Thanks for listening.

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