Plenty of people are thinking about stocking up on certain goods before tariffs cause prices to rise, but experts warn you might want to hold off on panic buying.
The fear of tariffs means millions of Americans might be tempted to stock up on certain goods before prices begin to rise. But, experts warn, don’t rush into panic buying.
“There's a lot of things at play right now. It's kind of a wait and see,” explained Thomas Nitzsche, a financial educator at the nonprofit Money Management International (MMI).
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WATCH HEREWhile some imported goods might cost a bit more down the line, Nitzsche says panic buying often leads to overspending on things not really needed.
“Definitely don't treat the tariffs as some sort of a sale,” Nitzsche said. “You don't want to be convinced by a sale that it's absolutely something you have to have.”
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Stocking up may lead to credit card debt. As interest rates remain high, carrying a balance can cost borrowers even more over time.
“If you're carrying a lot of high interest credit card debt, now more than ever, it is important to look for ways to reduce that interest rate,” recommended Nitzsche. “If you're someone that has a good credit score, you might be able to do a balance transfer. There's a credit card out there right now that does 0% for almost two years, if you do a balanced transfer. Obviously, there's a fee for doing that, and you can only do that if you have pretty good credit. But that's one good way to really get your interest rate down to almost zero or zero and try to pay that off within that promotional rate.”
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Nitzsche said now is the time to review spending plans, build up emergency savings, and avoid impulsive shopping decisions
“Credit cards are a familiar, relatively safe financial tool that people can use when they're experiencing a shortfall. But now, more than ever, it's really important to make sure you have a spending plan. People don't like the B word, the budget word, right? But it's important to have a planning plan in place. Make sure you know where every dollar is going right now because it's more important than ever to do so. When you see $10 for a dozen eggs, it is really a wake-up call,” said Nitzsche. “If it is something you know you'll need, you want to buy now, feel free. But just use caution, because if you finance it, you really got to do the long-term math on that to see, is this really going to make sense? Am I going to end up paying more in interest than I would have saved if I just waited?”
Before making any big financial decision, Nitzsche recommends talking to a financial planner to avoid doing anything out of fear.
“I'd recommend: if you're worried about your job to save right now. If you're not worried about your job, then it's probably a good opportunity to really review your budget and start paying down that credit card debt more aggressively so that you're not losing money every month to interest and you can achieve those long-term financial goals – whatever they might be.”
