MW Tariffs could cost Americans an extra $2,000 a year. Here's where to find that money in your household budget.

By Venessa Wong

10 practical tips, tricks and hacks for fortifying your finances against a trade war

Americans are bracing for more financial strain as President Donald Trump's tariffs are expected to increase average household expenses by an estimated $1,200 to $1,600 per year.

The potential new pressures on Americans' wallets come as inflation has been squeezing all but the wealthiest Americans for years now. The added costs of these new tariffs (about $626 per person, according to the Economic Policy Institute) is especially bad news for the roughly half of U.S. households who already carry a credit-card balance. The average balance among these card holders was more than $7,200 by the third quarter of 2024, according to LendingTree (TREE).

Short of increasing income or reducing your rate of saving and investing, the only way to find extra money to account for the impact of tariffs is to address household spending. Many people know that the answer is spending less, but how? MarketWatch spoke with financial planners and budget enthusiasts for suggestions on finding an extra $2,000 in your annual budget to get through the trade war without significantly reducing your quality of life or racking up credit-card debt.

Read more: Americans are piling on debt at a furious pace, as tariffs loom

Incentivize yourself to buy less

Everyone knows that spending less means buying less, but the very idea of it can feel like such a drag. Marissa Huertas-Crespo, a creator on TikTok, told MarketWatch she is trying a new savings strategy in which she writes down the cost of all the products she considered buying but did not ultimately purchase - often shoes, bags and accessories - and invests that money instead. This low-spend challenge has already saved her $1,100 this year, she said. Huertas-Crespo has a higher-than-average income, so she's not as worried about covering day-to-day expenses, but her method of "finding" extra money can work for anyone who's trying to be more mindful about where their dollars go.

Of course, if you need the money for expenses, just put it into your savings account instead. Many Americans spend less than this: The average spending on apparel, for instance, is about $170 per month, according to Bureau of Labor Statistics data. Reducing that by even $70 per month - for instance, by buying used clothes in thrift stores or online, or by participating in your local Buy Nothing group, in which people in your community list items that are available for free - can create space in your budget while still giving you some funds to shop.

Down from $170 to $100

= $70 saved per month

Bring lunch to work once a week

This tip isn't new, but it's meaningful. Most of us know that buying meals at a restaurant is expensive, especially these days, but we do it anyway because it's convenient. If you can cut out buying even one lunch per week, the savings add up quickly. André Small, a financial planner and founder of A Small Investment, recommends bringing your own lunch in on Mondays. "You have the weekend to prepare," he said. If you get some momentum, it could turn into a homemade lunch the next day, too.

Down from $20 per restaurant lunch (x 4 lunches) to $5 per homemade lunch (x 4 lunches)

= $60 saved per month

Switch to a budget wireless carrier

Many of the big wireless carriers now have budget operators: Verizon $(VZ)$ owns Visible; T-Mobile $(TMUS)$ owns Mint; and AT&T $(T)$ owns Cricket. They use the same networks, but offer fewer services and may have slower speeds when there's network congestion. Verizon's basic unlimited plan is $55 per month for one line, according to its website. The cost per month for a basic unlimited plan on Verizon's budget wireless carrier Visible, meanwhile, is $25 per month.

Down from $55 per month to $25 per month

= $30 saved per month

Hold on to your paid-off phone for one more year

Americans hold onto their phones for an average of 3.6 years, according to Assurant. If your phone is paid off and still functions well, what if you just held off for just one more year before upgrading? The monthly payment for a new iPhone 16e on T-Mobile, for example, is $25 per month for 24 months. It may not sound like a lot, but that's still $25 more per month than your paid-off phone.

Down from $25 to $0

= $25 saved per month

Pause one streaming subscription per month

The average U.S. household pays $61 per month for four streaming services, according to Deloitte. That's a lot of entertainment. If you are able to pause even one subscription per month, that cuts your streaming budget down significantly. Netflix's $(NFLX)$ standard plan, for instance, is now $17.99 per month without ads. You may even find that you don't miss some of them.

$18>$0

= $18 saved per month

Total saved: $203 per month, or $2,436 per year

Feeling good? Want to keep going? Need to save more? Here are a few more ideas that don't require a heavy lift.

Reduce your tax withholding

About two-thirds of taxpayers receive a tax refund, which means those people overpaid in taxes. André Small suggested looking at the IRS's tax-withholding calculator to estimate your tax bill. If your employer is deducting too much, you can contact them to withhold less, for example, by $10 per paycheck. The idea of this exercise is to find that sweet spot so that if your employer is withholding too much from your paycheck, and you end up getting a tax refund, you change your deduction so that you have extra dollars in your paycheck. But remember: Don't deduct too little, because that will just result in the stressful situation of you owing the IRS money come tax season.

If you buy Treasurys, choose those that mature in 2026

For people whose concern is reducing the taxes they'll pay on their 2025 income, so they have some more time to sort out their finances, can buy Treasury notes that don't mature this year, which will reduce their 2025 tax bill. The taxes will instead be owed for the year in which they mature, said Thomas Van Spankeren, financial planner and chief investment officer at RISE Investments.

Consolidate credit cards

If you are married, for instance, and both you and your spouse are paying annual fees for similar credit cards, cancel one of them and add that spouse as an authorized user on the other card, said Van Spankeren. Depending on the card, this can save hundreds of dollars per year.

Adjust your thermostat down 2deg F for the winter, and up 2deg F in the summer

The Energy Department estimates that for every degree you turn down your heat in the winter, you save about 3% on your energy bill. The same goes for every degree you increase your thermostat in the summer. The average cooling bill last summer was about $719 for the season, which runs from June to September. The average heating bill this winter season is expected to hit $941 from November to March. "Even if you did a couple degrees less cool, or less warm, that's a good change," said Ben Loughery, a financial planner at Lock Wealth Management.

Check your benefits elections on your pay stub

Just like people forget about their subscriptions, financial planner Antonio Lugo at Smart Wealth Strategies told MarketWatch that people also forget about their employee-benefits elections, and sometimes remain enrolled in benefits that they no longer need. Not all benefits can be changed midyear, and each benefits administrator may have different rules on changing elections. But if you're looking to stop the flow of money leaving your budget, Lugo said leaks can even be found before your pay hits your checking account.

Read more: Americans elected Trump to lower prices - his policies could do the opposite

What personal-finance issues would you like to see covered in MarketWatch? We would like to hear from readers about their financial decisions and money-related questions. You can fill out this form or write to us at readerstories@marketwatch.com. A reporter may be in touch to learn more. MarketWatch will not attribute your answers to you by name without your permission.

-Venessa Wong

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

March 11, 2025 07:00 ET (11:00 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.