How to Prepare Your Budget for Tariff Surcharges

Many companies are already adding “tariff surcharges” to customer bills in response to President Trump’s tariff policies. These surcharges reportedly range from 10% to 40% – a significant sum that could throw a wrench into your budget. One of the easiest ways to help monitor the impact of tariffs on your budget is by joining MoneyLion.

MoneyLion can help make tariff budgeting easy by:

1. Syncing your spending against your budget.
2. Alerting you when you’re about to reach your budget limits
3. Monitoring your spending on a regular basis, in case expenses creep up due to tariffs

Best of all, it’s free and easy to create a MoneyLion account. Join now and take advantage of our free budgeting tool! 

Otherwise, let’s explore how you can prepare your budget for tariff surcharges.

What are tariff surcharges?

Tariff surcharges are additional fees that some U.S. companies are adding to bills, per the WSJ. Companies are implementing these surcharges to help offset the cost of President Trump’s tariff policy. 

Still confused what a tariff is? Be sure to read our full guide How Do Tariffs Work and Who Really Pays Them?

Are prices increasing due to tariff surcharges?

Many companies are considering raising their prices due to tariffs. These price hikes could materialize in a number of ways, including:

1. A flat fee: Adding a flat fee that’s identified as a “tariff surcharge” to every purchase.

2. A percentage: Calculating tariff surcharges as a percentage of the item price. For example, a 10% surcharge on a $100 item would result in a final price of $110.

3. Raising prices: Increasing the price of certain items, but not revealing why.

If this trend continues, then you could see a dramatic uptick in your monthly expenses, even if you aren’t buying more stuff. I

Preparing your budget for tariffs

It’s important to highlight just how dramatically tariff surcharges could affect your budget. 

For example, let’s assume that most companies start implementing a 10% tariff surcharge, which is on the lower end of what President Trump has announced. If you normally spend $3,000 per month, then your expenses would bump up to $3,300 per month after the tariff surcharge ($3,000 * 10% = $300). Throughout the year, tariffs could add an extra $3,600 to your spending.

This is a simplified example, and the math likely won’t be this clean in real life since not all companies will implement a clean 10% charge. But, this gives you an idea of just how much tariffs could impact your budget.

Let’s examine a few ways that you can prepare for tariff surcharges.

1. Make big purchases sooner rather than later

Since prices are anticipated to increase, it may make a lot of sense to prioritize big purchases now before things get more expensive.

In fact, many Americans are already rushing to make big purchases to get ahead of tariffs, according to the U.S. Commerce Department. This strategy makes sense for larger purchases because a potential tariff will result in a larger absolute increase on higher-priced items. 

A 10% tariff on your $5 coffee is an extra 50 cents. Not fun, but not breaking the budget. But, a 10% tariff on a $20,000 car is $2,000 – a much more significant sum.

If a 10% tariff results in prices increasing for the consumer, then buying before these tariffs trickle down could potentially save you money. 

However, this strategy is only advisable if you were already planning on making that purchase. 

While tariffs could lead to higher prices in the future, this doesn’t mean that you should give yourself the green light to make big purchases if they’re out of your budget. Rushing to buy things that you don’t really need could unnecessarily drain your income. 

2. Buy non-perishable items in bulk

Another way to lock in today’s “lower” prices is by buying non-perishable items in bulk. After all, these items won’t expire anytime soon, so it may make sense to load up now before a potential price increase. You can do this for most household items, including:

1. Soap and detergent
2. Trashbags
3. Toilet paper and paper towels
4. Canned goods (beans, vegetables, fruits, etc.)
5. Dry goods (rice, pasta, oats, etc.)
6. Beverages (coffee, tea, bottled water, etc.)

If you don’t already belong to a wholesaler (Costco, BJ’s, Sam’s Club), then this might be a good time to consider signing up. Additionally, if you come across a great deal during your normal shopping, then consider stocking up if you’ve got room in your budget

3. Reexamine your budget frequently

News surrounding tariffs is changing quickly, and new updates could lead to dramatic price increases. We’re not being dramatic when we say it makes sense to examine your budget on a weekly or even daily basis. Don’t assume that your budget from last year (or even last month) will still hold up. 

Be sure to check out our detailed guide, How to Make a Budget: 6-Step Guide to learn more about this subject.

4. Explore different stores

There’s a good chance that tariffs will impact stores differently, since companies import their products from different countries.

For example, hypothetically, Store A might source its towels from China while Store B sources its towels from Vietnam. In theory, this could result in cheaper towels at Store B since China is facing much steeper tariffs than Vietnam. 

Additionally, try exploring local stores or farmers’ markets. Smaller stores tend to source products closer to home, which means they’ll likely be less impacted by tariffs.

5. Push discretionary spending to the end of the month 

To avoid accidentally going over budget, consider pushing all “unnecessary” purchases to the end of the month. Think: buying food now, but waiting to buy new shoes.

Delaying discretionary spending to the end of the month might seem a bit overcautious. But that’s better than accidentally overspending early in the month and then getting behind on your bills.

Another budgeting strategy that can prevent overspending is cash stuffing – learn how this latest budgeting craze works.

6. Flex your “saving money” muscles

This is an ideal time to start flexing your “saving money” muscles. By this, we mean refreshing yourself on some of the most common ways to save money. A few of our favorites include:

1. Using price comparison websites before shopping 
2. Exploring free entertainment options
3. Renting out spare rooms or parking spaces

Read our full guide to learn more: How to Save Money Fast on a Low Income: 20 Tips and Tricks.

7. Threaten to cancel your subscriptions

Want to know a sneaky tip? Most companies will offer you a discount if you threaten to cancel your service. You don’t really have to cancel. You just need to tell them you’re canceling. 

This doesn’t work 100% of the time. But, you’d be surprised how often just threatening to cancel a service can get you 10% off, 20% off, or even multiple free months of service. From the company’s perspective, they’d rather keep you paying something than lose you entirely. This tip works best for subscription-based products like:

1. Insurance (this is a big one)
2. Utility bills
3. Phone plans
4. Software subscriptions
5. Gym memberships & other wellness services
6. Streaming services (this tip doesn’t work as well here)

Take an afternoon to go through your monthly subscriptions, try to cancel them, and see what happens. Many companies will likely extend pretty generous discounts to stay. 

This strategy is particularly effective for larger expenses, like health or car insurance. If you ask for a lower price, the insurance companies will insist that they can’t go any lower. “Sorry! That’s truly the best I can do.” But, tell them you’re going to take your business elsewhere, and watch how they’re magically able to find a lower rate in most instances.

Here are the steps you can take to use this strategy:

1. Start the process of canceling: This could mean using an online portal, sending an email, or calling customer support. Be sure to just start the process, don’t finish it.

2. See if the company offers a discount or promotion for you to stay

3. If they do, then great! You just got a free discount.

4. If not, then just stop before you finalize the cancellation. No harm, no foul.

Preparing Your Budget for 10% Trump Tariffs

Tariff surcharges are likely on their way, which means it may be time to start bracing your budget. We’ve explored a handful of ways that you can start preparing your budget, including:

1. Consider making big purchases ASAP
2. Buying non-perishable items in bulk
3. Reexamining your budget frequently
4. Exploring different stores
5. Pushing discretionary spending to the end of the month
6. Flexing your “saving money” muscles
7. Threatening to cancel your subscriptions as a way to possibly get a discount

I hope that you’ve found this article valuable when it comes to learning how you can prepare your budget for tariff surcharges – thanks for reading!

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