In recent months, news of the Trump administration’s aggressive and ever-evolving tariff policy has been dominating headlines. And Americans are concerned about how higher tariffs will impact their ability to afford daily essentials.

This week, President Trump signed an executive order extending the tariff truce between the US and China for another 90 days, with trade negotiations now expected to take place in the fall. The average US tariff rate on Chinese goods is about 55% currently. Trump also recently unveiled "reciprocal" tariffs on dozens of US trade partners.

These tariffs increase the cost for businesses to bring foreign products into the country. So, to maintain profit margins, companies often pass those costs along to consumers in the form of higher prices. There’s no telling how much higher these tariffs will go or how long they’ll be in place, but there are steps you can take to reduce the impact these policies have on your wallet.

In short, tariffs are taxes imposed by the government on imported goods. They’re usually charged as a percentage of the item's value and are paid by the importer when the product enters the country.

According to estimates by the Center for American Progress, the typical American household can now expect to pay an average of $4,600 annually because of Trump’s tariffs. A different analysis by the Budget Lab at Yale estimated that the annualized cost of Trump’s new tariff scheme for the typical American family is $4,700.

Read more: How Trump's tariffs affect your money

Tariffs can be a frightening prospect for consumers because there’s no way to predict how high tariffs will get and how deeply they will impact your personal finances. However, there are still steps you can take to prepare yourself and your wallet for the potential impacts.

When prices rise, it may be harder to justify setting aside cash in a savings account. However, higher costs make it more important than ever to ensure you have a solid financial safety net.

“Keep building that emergency fund,” said Matt Schulz, chief consumer finance analyst for LendingTree. Most experts recommend saving up at least six months’ worth of expenses. This financial cushion can help you absorb sudden increases in the cost of essentials as well as avoid going into debt if your monthly expenses outpace your budget or if an unexpected bill hits during a period of higher inflation.

Now is a good time to reevaluate your budget and see where you can cut back, especially on nonessential purchases (aka discretionary spending). For example, you can freeze memberships you aren’t using, downgrade subscriptions to versions with ads, or even try a no-spend challenge.

Reducing your discretionary spending — even if it’s temporarily — can open up more cash flow to put toward essential bills, savings, and debt repayment.

Read more: Your complete guide to budgeting for 2025

With prices on the rise, it could make sense to adjust your debt repayment strategy.

“Money you have to put toward paying down credit card debt or other high-interest debt is money that can’t go toward putting food on the table, building an emergency fund, or reaching other financial goals,” Schulz said. “It’s also money that can’t be used to offset rising prices.”

In other words, aggressively paying down your debts may not be the best move right now, depending on how much extra money you have in your budget. Instead, Schultz suggested using a 0% balance transfer credit card or low-interest personal loan to consolidate those debts and decrease the amount of interest you’re paying. Again, this can help improve your cash flow if money is tight.

When tariffs are driving prices up, being intentional about what, where, and how you buy is key.

For example, you may consider stocking up on nonperishables and household staples before prices rise further. If you have a large family, it could make sense to join a warehouse club (such as Costco or Sam’s Club) to save on the per-unit cost of frequently used items in your home.

Additionally, avoid spending on products that are impacted more heavily by higher tariffs, such as electronics, toys, and clothing. You can also use cash-back apps such as Rakuten, Honey, or Ibotta to earn back money on essentials.

If you’re struggling to manage your finances and aren’t sure what your priorities should be, it can help to consult a financial planner. They can help you come up with a tailored plan to pay off debt, meet your savings goals, improve the return on your investments, and create a budget with these goals in mind.

“Regardless of whether tariffs are implemented, your goals are still your goals,” Schulz said. For instance, you still need to invest in your retirement. You may also be saving money to buy a home, pay for your kid’s college education, or pay for a wedding. “These things still matter, so don’t let uncertainty around tariffs keep you from focusing on them,” he said.

Read more: What is a financial advisor, and what do they do?

President Trump’s increase on steel and aluminum tariffs, from 25% to 50%, went into effect on June 4. These pricier tariffs are expected to drive costs higher for many products, including automobiles, which rely heavily on both steel and aluminum.

While the White House has said that separate tariffs on products like steel and aluminum won’t “stack on top of” the existing auto tariffs, consumers should still anticipate the cost of certain vehicles and auto parts to go up in the near future.

Trump’s 25% tariff on fully assembled cars was implemented on April 3, while tariffs on some 150 categories of auto parts made outside the U.S. kicked in on May 3.

Follow along with Yahoo Finance’s live updates on all things Trump tariffs.

Still, any automotive tariffs will likely trigger a domino effect that could lead to higher car insurance prices.

Learn more from Yahoo Finance: Big tariffs on auto parts are now in effect. Here's how they work.

As new vehicle and auto parts prices go up to cover the cost of tariffs, prices for repairing or replacing a car after an accident, other damage or vehicle theft will rise. Insurers will pay out more for auto insurance claims and then will likely seek higher car insurance rates to compensate for their higher costs.

“Auto insurance premiums are a reflection of the cost to pay claims,” Stephen J. Crewdson, senior director in the Global Insurance Intelligence Group at J.D. Power, a global data and analytics company, said via email. “As these claims costs go up or down, premiums will eventually follow.”

Insurers are closely monitoring the tariffs’ impact.

Learn more: 6 steps to find cheap car insurance in 2025

“While our focus has been on trying to maintain stable rates for customers, tariffs and other retaliatory actions will likely result in higher loss costs, which could result in a reduction in profitability and higher than currently anticipated rate increases throughout 2025 and 2026,” Progressive said in its first quarter regulatory filing.

Car insurance customers could feel the sting of tariffs on a number of fronts.

The types of car insurance that pay for vehicle repairs could see rates rise if higher claims are being paid out. This includes liability insurance, collision insurance, and comprehensive insurance.

Learn more: Most common types of car insurance explained

About six of every 10 auto replacement parts used in U.S. auto shop repairs are imported from Mexico, Canada, and China, according to Jon Ward, vice president of public affairs with the American Property Casualty Insurance Association (APCIA).

As repair costs increase, damaged vehicles are more likely to be totaled. This will spark more payouts for the actual cash value of vehicles rather than for repair costs. This, in turn, will force more drivers to shop for new cars to replace their totaled vehicles at a time when new car prices may also be affected by tariffs.

In addition, car repairs could take longer if the fallout from tariffs disrupts supply chains and makes it more difficult to get parts. Longer repair times would increase the cost of rental reimbursement claims and potentially lead to higher premiums for that coverage. Rental reimbursement insurance is an optional coverage that helps pay for a rental car while your car is getting fixed for a covered claim.

Consumers with rental reimbursement coverage could end up paying more out of pocket for a rental car if the repair delay exceeds the coverage limit, which is typically 30 days, said Colleen Parsons, an independent insurance agent with World Insurance Associates in the Rochester, New York, area. “This reminds me of what we went through during the pandemic when parts weren't easily available, and there were a lot of delays.”

Consumers may see an impact on their car insurance bill in 12 to 18 months, according to the APCIA.

“There is a lag in changing premiums as insurers usually want months of data to analyze before adjusting rates,” Crewdson said. “Some states require prior approval, which takes time, and auto policies are six-month policies, so some customers won’t see the premium changes for months after they happen.”

It’s hard to say how much your car insurance rate will rise. Parsons said premium increases will vary depending on the type of vehicle you own and the parts needed to repair it.

Meanwhile, don’t expect the automotive industry to shift production to the U.S. overnight to escape tariffs.

“Moving an auto supply chain takes at least two years and billions of dollars, making quick shifts in production nearly impossible,” Liz Hempel, a partner at McKinsey & Co., a global management consulting firm, said via email. “With seven-year model cycles and specialized infrastructure concentrated in key regions, the automotive industry faces unique hurdles. Beyond factory relocations, moving decades of expertise is another major challenge.”

Learn more: Car insurance rates are climbing. Here are 4 reasons why and 11 ways to save.

You can’t control tariffs. But you can take steps to manage your car insurance rates and keep them as low as possible. Here are some tips.

Resist the temptation to cut necessary coverage in order to save money. For instance, don’t lower liability limits below the value of your net worth, which would put your assets at risk if you cause an expensive car accident. You could save a little money on your insurance bill but lose a bundle if you were sued and didn’t have enough coverage. “It’s too big of a risk to gamble,” Parsons said.

Read more: How much car insurance do I need?

The higher the deductible is, the lower your car insurance premium for collision insurance and comprehensive insurance. Set your deductible to the highest amount you can afford to pay out of pocket in the event you have a claim, and then stash that amount in savings so it’s available.

Check with your insurance agent to make sure you’re getting all the discounts you deserve. While many discounts are applied automatically, like vehicle safety discounts, your agent may be able to find others you can use. For example, there are often small discounts for going paperless or using EFT payments. And some insurers offer discounts for taking a defensive driving course.

Learn more: Car insurance discounts: 17 ways to save

Check your coverage to see if it’s still in line with your needs. Perhaps your car’s value has dropped to the point that you can drop collision insurance. Compare quotes from companies to make sure you’re getting the best deal. You can do that yourself or work with an independent insurance agent. An independent agent represents multiple insurers and can do the rate shopping for you from multiple companies.

Tim Manni edited this article.

Inflation accelerated again last month with global trade turmoil exacting a toll on consumer prices.

The Consumer Price Index rose 2.7% over the prior year in July, and 0.2% from June.

Airfares, used cars, and shelter costs all marched higher, while food prices held fairly steady. (Except for coffee — the morning staple continues to see steep price hikes.)

Here’s what the latest CPI report means for your household.

Learn more: What is the Consumer Price Index (CPI)?

Economists and consumers alike are on high alert for signs of President Trump's sweeping global tariffs showing up at the cash register. "Core" inflation, which excludes volatile food and energy costs, marked the largest gain in six months, a potential sign that imported, tariffed goods are driving the story.

The BLS highlighted home furnishings, which rose 0.4% from June.

"There are clear signs (that) a range of goods prices are moving higher, pushing core goods inflation to a more than two-year high," Michael Pearce, deputy chief US economist at Oxford Economics, said in a statement. "But some major tariffed items, including autos and major appliances, have yet to show much impact."

Read more: How Trump's tariffs affect your money

Grocery prices dipped 0.1% in July but are still 2.2% higher than a year ago.

Eggs, whose price spirals have come to symbolize inflation anxiety, fell 3.9 percent from June, after dropping 7.4% compared to May. But they're still a steep 16.4% higher than a year ago.

A dozen large Grade A eggs, on average, cost $3.60 in June, down from $3.76 in June and $4.55 in May.

A real pain point: the price of coffee, which is 14.5% than a year ago.

Meat prices, especially beef, remain elevated: Ground beef is 11.5% higher than a year ago, and steaks are up 12.4%. According to the BLS, a pound of ground chuck now averages $6.34. Ham and pork chops both saw increases, while poultry prices remained flat compared to June.

The cost of eating out increased 0.3% from June and was 3.9% higher than a year ago.

Medical services increased 0.8% from June and are 4.3% higher than a year ago. That category includes hospital services, which are 5.8% higher than a year ago, and nursing home care, which is up 4.7%.

Prescription drug prices fell 0.2% from June, while over-the-counter drug prices eased 0.5% monthly.

Health insurance rose 4.4% compared to July 2024 and was up 0.4% monthly.

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Shelter costs have eased from pandemic-era price spikes, but home affordability is still a strain for both renters and owners. Housing inflation rose 0.2% last month and is up 3.7% in the past year.

But there are signs that housing costs are cooling this year. While the Northeast remains a sellers' market, other regions of the U.S. have shifted to favor buyers, and prices are on the decline.

Learn more: What does the latest CPI report reveal about mortgage rates?

Car prices, especially used cars, also spiked during the pandemic before settling somewhat recently. But used car prices popped 0.5% from June and nearly 5% higher than a year ago. The new car index was flat compared to June.

But there was good news at the gas pump.

The gasoline index fell 2.2% from June and was 9.5% lower than a year ago. As of Aug. 12, the national average for gasoline was $3.14 per gallon, according to AAA data, down from $3.44 a year ago.

Airfares, which slowed in June, were back up last month, notching a 4% increase.

Inflation remains above the Federal Reserve's target of 2%. July's inflation reading underscores the task facing the Fed in its September meeting, with inflation on the rise but the labor market showing signs of serious struggle. For now, traders are betting heavily on a rate cut next month.

"Although core annual inflation is back to its highest level since February, today’s CPI print is not hot enough to derail the Fed from cutting rates in September," Seema Shah, chief global strategist at Principal Asset Management, wrote in reaction to the report.

Click here for the latest personal finance news to help you with investing, paying off debt, buying a home, retirement, and more

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Does saving money feel like a challenge, even if you earn a decent income or keep a tight budget? It may have something to do with where you live.

Factors such as how much you earn, the price of daily essentials, housing costs, taxes, and more can impact your ability to save, some of which may be out of your control — and depend on the state you live in.

Curious about how your state aids or impedes your ability to save? We evaluated seven key metrics across all 50 states to determine the best and worst states for savers. (See our full methodology here.)

North Dakota scored the top spot on our list as the best state for saving money. This state has one of the lowest costs of living, combined with a strong median annual household income of $78,720.

The state also has a significantly lower top marginal state income tax rate than some of the other states on our list. Finally, less than 40% of North Dakota renters and less than 23% of homeowners are housing cost burdened (defined as spending 30% or more of household income on housing costs).

Read more: What percentage of your income should go to a mortgage?

The second-best state for saving money is Wyoming. This state’s cost of living was on the lower end compared to some of the other states we evaluated. The median annual household income sits at $73,090, according to the latest data, and it was among the states with the lowest property tax rates on our list. This state also had the lowest percentage of renters burdened by housing costs.

The third state on our list is Iowa, where the median annual household income is a substantial $76,320. Residents also pay modest taxes, with the top marginal state income tax rate of 3.80% and a state sales tax of 6%. This state also had one of the lowest household debt-to-income ratios across all 50 states.

South Dakota came in fourth place with a median household income of $67,180. In the state of South Dakota, just 24.6% of homeowners experience a housing cost burden, and the household debt-to-income ratio is 1.24, which is on the lower end. Another perk: South Dakota is one of nine states with no income tax, making it easier for residents to allocate more of their paychecks toward savings.

Nebraska took the fifth spot on our list of the best states for saving money. The annual median household income is an impressive $78,360. Further, the sales tax rate in Nebraska sits at 5.50%, along with an effective property tax rate of 1.43%. Nebraska was also one of the states with a lower percentage of housing cost-burdened renters and homeowners (42% and 26.4%, respectively).

Read more: This map highlights the average net worth in every state

The worst state for saving money is Hawaii. This state has the second-highest individual income tax rate and the highest cost of living in the country. It also has the highest household DTI, despite the median household income being a whopping $91,010.

Renters and homeowners in Hawaii face higher housing costs as well, with over 56% of renters and 38% of homeowners burdened by housing costs.

It may come as no surprise that the state known for high taxes and cost of living is the second-worst state for saving money. With the highest top marginal income tax rate of all the states (13.30%), the highest sales tax rate (7.25%), and the third-highest score for cost of living, savers may not have much income left over to put in their savings accounts.

The median household income in California is $85,300, but even a higher salary isn’t enough to cover California’s housing costs in many cases. As it stands, 53% of renters and 41% of homeowners are burdened by housing costs.

Massachusetts is the third-worst state for saving money, according to our data. It has the second-highest median household income out of all the states we compared at $93,550. Still, nearly half of all renters and close to 36% of homeowners in Massachusetts are burdened by housing costs. Massachusetts also had the second-highest cost of living across all states.

Florida came in fourth place among the worst states for saving money. The median household income in Florida is $65,370 and it’s one of a handful of states with no state income taxes. Even so, the majority of Floridians are burned by their rent (56.8%). Plus, this state had a higher cost of living compared to many other states we evaluated.

Oregon took the fifth spot on our list of the worst states for saving money. Despite an impressive median household income of $86,780, more than half of all renters and 35% of homeowners in Oregon are housing cost burdened.

One upside is that Oregon is one of a handful of states with no state sales tax. However, Oregon still has one of the highest top marginal state individual income tax rates in the nation at 9.90%.

Read more: This map highlights the average credit score in every state

Even if you don’t live in one of the best states for savers, there are still ways you can maximize your savings. Here are a few tried-and-true savings strategies that work regardless of your zip code:

Where you keep your savings is just as important as the amount you’re contributing. The national average interest rate for a savings account is only 0.38%, according to the FDIC. However, there are savings options out there that can help your savings grow faster.

For instance, putting your money in a high-yield savings account or certificate of deposit (CD) could help you earn as much as 4% APY or more on your savings. This can help you earn a significant amount of interest over time and hit your savings goals faster.

There are several tax credits and deductions that you may qualify for that can lower your tax liability in April. For example, making extra contributions to your 401(k), IRA, and/or health savings account (HSA) can help lower your taxable income. There are also write-offs related to caring for dependents, working from home, medical expenses, student loan payments, and more.

However, unless you’re a tax expert, you may not know about all of the deductions and credits available to you. Tax software programs are fairly reliable when it comes to finding potential write-offs. But if you’d like the help of a human expert, consider speaking with a tax professional who can help you identify which credits and deductions you can take advantage of at the federal and state level to lower your overall tax bill or increase your refund.

Read more: Wondering what to do with your tax refund? 5 ways to spend it wisely

Saving more money isn’t just about trimming your costs — it can also be helpful to look for ways to increase your income. One of the easiest ways to do that is to ask for a raise.

But before you meet with your manager, you’ll need to do some preparation. Begin documenting your accomplishments and concrete ways you've contributed to your company's bottom line. Then present your case for getting a raise when the time is right (such as during a yearend review or following a strong sales quarter).

If a raise isn't an option, set a date to revisit this conversation with your manager at a later time. You may also want to consider whether it makes sense to look for a new position; strategic job hopping can be an effective way to increase your salary over time.

Housing costs can place a major financial strain on American households, especially for those in higher cost of living areas.

Whether you’re a renter or a homeowner, downsizing to a more modest home can help trim your monthly rent or mortgage payment, as well as reduce the amount you spend on utilities and maintenance. If it makes sense for your situation, relocating to a new neighborhood or even a new state with a lower cost of living or tax rate can also help you save significantly.

Contributions to your savings should be considered a monthly expense in your budget. This ensures saving remains a priority and that your savings account grows consistently over time. You may also consider setting up automatic contributions from your checking account to your savings account so you don’t even have to think about it.

Read more: Your complete guide to budgeting for 2025

The less you spend on unnecessary expenses, the more you can afford to set aside for future savings goals. Take some time to review your monthly budget and your most recent bank statements. Be honest with yourself about which expenses are non-negotiable and which ones you can probably scale back (think: unused subscriptions, takeout orders, shopping, etc.).

Every dollar counts when it comes to saving money, and shaving a few dollars off your bottom line each month can make a big difference in your savings account balance.

Read more: How to save money in 2025: 50 tips to grow your wealth

Debt can be a drag on your budget, especially your savings account contributions. Carrying debt costs money in interest over time. Prioritize paying off high-interest debt, such as credit cards, to free up room in your budget. There are many debt repayment strategies you can use to tackle your debt — so find one that works for you.

Read more: What’s more important: Saving money or paying off debt?

Our grading system, collected and carefully reviewed by our personal finance experts, comprised more than 400 data points to develop our list of the best and worst states for saving money.

We evaluated all 50 states according to several key metrics, using the most recent data available:

Household debt-to-income ratio (DTI): We used publicly available data from 2024, provided by the Federal Reserve, to determine the household DTI for each state. States with a lower DTI ranked higher on our list.

Percent of renters experiencing housing cost burden: “Housing cost burden” is defined as spending 30% or more of household income on housing costs. We used information from the Population Bureau, sourced from the U.S. Census Bureau’s 2020 ACS Public Use Microdata Sample to determine which states had more housing cost-burdened renters.

Percent of homeowners experiencing housing cost burden: We used data from the United Health Foundation to examine the percentage of households in each state for which housing costs are 30% or more of household income.

Median household income: The median household income is the true “middle” income across all residents where half of all households earn more than the median and half earn less. We favored states with a higher median household income based on 2022 data, the most recent available from the Federal Reserve Bank of St. Louis.

Cost of living: Cost of living is defined as the amount of money needed to cover your basic living expenses in a particular area. We favored states with a lower cost of living, based on the Missouri Economic Research and Information Center’s cost of living index for Q1 20254.

Effective property tax rate: This is defined as the average amount of residential property taxes actually paid, expressed as a percentage of home value. We favored states with a lower tax rate, based on analysis by the Tax Foundation using the U.S. Census Bureau’s 2023 American Community Survey.

State sales tax: Sales tax is a tax imposed on the sale of goods and services. We favored states with a lower sales tax rate, based on analysis by the Tax Foundation.

Top marginal state individual income tax rate: We relied on analysis from the Tax Foundation to determine the current maximum statutory income tax rate in each state, based on individual income tax rates, brackets, standard deductions, and personal exemptions for single and joint filers in 2025.