Consumers facing imminent tariff-driven price hikes must urgently assess whether to buy goods now or boost their savings, according to financial expert Shang Saavedra this week, as global trade tensions threaten to increase everyday living costs.
Saavedra, the founder of Save My Cents, advises households to evaluate long-term financial goals and reduce non-essential spending immediately. Rather than eliminating all leisure expenses, the focus should be on contextualising financial objectives to mitigate the impact of rising costs.
“Tariffs will hurt everyone, so everyone is in the same boat,” Saavedra warned. “We all have to make do if our incomes are not growing as quickly.”
Navigating this shift does not necessarily require cancelling summer holidays or taking on secondary employment, but it does demand a strategic approach to budgeting.
Read more: Understanding Phone Tariffs and Potential iPhone Price Hikes
The Dilemma: To Spend Immediately or Accumulate Cash?
Determining whether to purchase items immediately or accumulate cash for future, more expensive acquisitions requires careful analysis.
“Take a look at what you spend money on and ask yourself what spending has to happen to sustain a healthy life,” Saavedra suggested. Prioritising essentials such as housing, transport, healthcare and food is critical. While saving in these areas is beneficial, cutting back excessively can cause personal detriment.
This decision is complicated by the evolving nature of tariff policies. Although tariffs are already in place, manufacturers require time to decide if, or when, they will pass these costs onto consumers.
“I’m totally fine with buying items now, but I don’t want you to do it out of panic,” Saavedra added, noting that panic-buying often leads to rushed, regrettable decisions.
If a purchase is already planned and financially viable, buying now is a reasonable safeguard against imminent inflation. However, impulse buying driven solely by fear of price hikes should be avoided. Regardless of whether you choose to stock up or save, maintaining a robust emergency fund and tracking long-term financial objectives remains paramount.
Optimising Your Savings: Where to Store Your Capital
For funds that may be required in the short term, utilising a high-yield savings account is highly recommended. Currently, these accounts offer annual percentage yields (APYs) averaging around 4%—nearly ten times the national average savings rate. This option ensures both capital growth and immediate liquidity.
Furthermore, many high-yield accounts feature integrated goal-tracking tools to keep your financial plans on course.
“There are accounts that allow you to assign goals to your money without having to open many accounts, so those are what I recommend the most,” Saavedra explained.