Tariffs. Car payments. Cell phones. What do these three things have in common? All three are currently on most people’s minds, and two are expensive considerations for every person’s or family’s financial plan.
As for tariffs, the uncertainty around where tariffs, and now also tax legislation, will settle in is on most people’s minds. Tariff “policy” is still in the throes of global negotiation and lack of clarity. Will the US consumer benefit in any way? Will tariffs lead to continued painful inflation in the US? What about future economic relationships between the US and the rest of the world? Much is up in the air. Certain companies and business owners are in flux regarding future investment and decision-making. Meanwhile, overall, employers and consumers seem to be plodding along in a net-net positive direction.
Two items whose effects on household spending have hit home far more frequently and recently are car payments and cell phones. Prices on both could be affected by tariff policy but so far have not yet been meaningful. The more pressing reason that vehicle and cell phone prices have increased is major advances in the technology features* contained in both. Back in 2017-2018, higher tech cell phone prices reached $1,000+ with payment plans offered (TGIF 2 Minutes – The $1,100 Cell Phone).** Today cell phones cost easily $1300+. That means that in addition to a hefty monthly car payment (lease or loan) most consumers now also have a monthly cell phone payment – plus monthly calling plan costs!
Eliminating one or both of these payments (vehicle, cell phone) can be the secret to future personal financial stability and independence. How to make this possible? Gradually establish a fund or “savings bucket” for these expenses so that monthly payments for vehicles and cell phones (the actual purchase of the phone) can be minimized or eliminated. Creating a foundation of saving first and then paying cash – and not borrowing for every major expense item – can work wonders for future financial peace of mind.
If an outright car purchase is not possible initially, saving gradually over time can make early pay-off of the loan or lease possible. Eliminating $600-$700 to $1,000 per month on car payments can go a long way!
For parents, forming this mentality in kids can set them up for a lifetime of financial security and freedom, or at least carrying much less debt in general.
Rent and mortgages are expensive enough. Mortgages, within reason, can be the “healthiest” form of debt. Focusing on minimizing costs, especially debt costs for major spending categories including transportation and cell phones, can create exciting opportunities for future financial peace of mind. Compared to tariffs and tariff policy, these items are far more within our control.
*Shannon Bradley, Nerdwallet.com. May 16,2025.
**TGIF 2 Minutes – The $1,100 Cell Phone. April 5, 2019.
This material has been prepared for informational purposes only and is not intended to provide, and should not be relied upon for, tax, legal or accounting advice.
Thank you for reading and TGIF!