With economic uncertainty sweeping the nation, some may be considering what small but meaningful steps can be taken to protect their personal finances.
According to Bola Sokunbi -- author, financial educator and founder of Clever Girl Finance -- stakeholders on Wall Street may not be the only ones whose pocket books are at risk of a hurting amid newly announced tariffs and a rapidly declining stock market.
Sokunbi noted that job security, general cost of goods, and services and utilities are just a few ways that a down market and potential recession could impact everyday consumers.
"They will see it reflected in their day-to-day life, even though they may not necessarily be vested or invested in the stock market," she said of everyday Americans.
Last week, President Donald Trump announced far-reaching tariffs and triggered a stock market tumble. Following the announcement, United States markets closed the week significantly down. The Dow Jones Industrial Average plummeted 2,230 points, or 5.5%, while the S&P 500 plunged 6%. The market continued to waver as recent as Monday morning.
On Friday, Chair of the Federal Reserve Jerome Powell said policy changes implemented by the White House have contributed to a "highly uncertain outlook," adding that he expects Trump's tariff policy will hike prices and slow economic growth. He also noted that key indicators "still show a solid economy."
Sokunbi also spoke to the possible strain on mental health attached to a tumbling market and the anxiety-inducing news cycle that may come along with it.
"When you're hearing all these things about, oh my god, a global recession and trade wars, you kind of start feeling… How does this impact me? How does this affect my job? How does this affect me being able to afford groceries, my budget? My plans for the future?" she said.
Sokunbi shared some ways that average consumers, young people and others concerned with personal finances can best equip themselves to ride out this economic turmoil.
Small business owners raises concerns over tariffs
Sokunbi laid out several steps one can take to protect their personal finances, as well as some steps people should avoid amid potential price rises and market volatility.
Sokunbi stressed that if financially capable, now is the time to invest in the stock market.
"This is a great opportunity to invest," she said. "Buy the dip consistently over time. You don't know how long the dip is going to last – we cannot time the market – but we know that eventually, next week, next month, next year, two years, the market will recover, and so take advantage of it."
Before investing, Sokunbi pointed out, it is imperative for those employed with a stable job to begin stockpiling cash for core essentials and then paying off as much high-interest debt as possible.
In an effort to save cash, she said now is the time to cut down on non-essential purchases, like frivolous subscriptions or dining out.
"Take a look at your spending," she said. "You know what you have been wasting money on. We all know."
"Eating out, subscriptions, clothes shopping -- we all know our vices, and you don't have to stop. But how can you cut down?" she added.
While many in the workforce may not be glued to the stock market on a day-to-day basis, millions participate in a workplace retirement plan such as a 401(k).
The Investment Company Institute found there are about 70 million active participants in 401(k) plans as of September 2024.
Sokunbi said for young people it is not necessary to panic over the safety of your 401(k) as the market changes are "short term" for now.
"They have decades before retirement, right? And so when you're thinking about saving for retirement, you're thinking about the long term, right? You're thinking about the future," Sokunbi said.
She said those closer to retirement also should remember, "Retirement is not one day."
"I'm seeing the stock market batter my retirement savings, I'm not cashing out my entire retirement savings today because I'm tired," she explained. "As a retiree, you would be taking out what you need for the year or for the month or for the quarter at a time."
With this strategy, she added, "The rest of your money still has the opportunity to grow and recover, as we know the stock market will do over time."
As tariffs bring the potential for increased price of goods, the housing market may be one area where consumers feel the brunt of price spikes.
"If we're talking about implementation of tariffs, then we're talking about potentially building materials that might be coming from abroad that could cost more money, which could drive the cost of homes up, could drive the cost of home repairs up, which, in turn, could drive the cost of the actual homes up," said Sokunbi.
She added it depends on any individuals specific market location, but a home purchase may be one area where potential consumers may want to hold off on plans to pull the trigger.
"I would say that right now it's okay to pause on those types of plans and focus on emergency savings," Sokunbi said.
Trump addresses stock market losses, China trade deficitThe chaos of market turmoil coupled with the personal financial strains and a gloomy news cycle that accompanies it may have some Americans struggling to prioritize mental health.
"Get away from the news. Take a social media break," advises Sokunbi.
"Use those subscriptions you're paying for your gym membership," she said. "Watch all those great shows that have been on your list. Use your library subscription, use your Audible. Give your brain a break of all of the negativity going around. Because life goes on."
