Despite Canada being spared from the heaviest blows of U.S. President Donald Trump’s “reciprocal” tariffs announced on April 2, many Canadians are feeling anxious about their finances in the face of the trade war.
Concerns over Trump’s trade policies and outright aggression have more than half of Canadians worried there will be a recession, according to a recent Leger poll. The same poll also found four in 10 are worried they’ll lose their job in the next 12 months, and roughly the same number said they’re already living pay cheque to pay cheque.
Personal finance experts tell the Star that these worries are normal to have right now.
“We don’t really know how this is going to impact everything,” says Cindy Marques, a certified personal financial planner and director at Open Access, a retirement plan service. “And we truly don’t know what Trump’s going to say next. He says his opinions and the initiatives that he wants to employ switch wildly from day to day.”
While there are the age-old tidbits of advice such as spend less, create a rainy-day fund or pick up more hours at work, these aren’t always realistic — or you might already be doing these things and are still feeling anxious.
Here are some other things you can do to help lessen your financial stress during these uncertain times.
Stay the course
It can be easy to panic amid economic uncertainty.
But expert after expert say it’s important to be cautious.
“Everybody always wants to do something,” says Dylan Wilson, a certified financial planner with Halifax-based Verecan Capital Management. “But more often than not, in hindsight, that ends up being a mistake.”
Wilson recommends people don’t make any big changes to their financial planning or investments until the impact of Trump’s tariffs is more clear. If you do decide to switch things up, make sure you are really confident in your decision, he adds.
This advice also includes any thinking around looking for a more secure job ahead of any potential layoffs — something that economists predict could happen in the hardest-hit sectors like manufacturing and auto jobs. Just hours after Trump gave the go-ahead on his 25 per cent auto tariffs while announcing his “reciprocal” penalties, Stellantis announced it would temporarily shutter its Windsor assembly plant for two weeks.
“I urge people if they are looking for new employment ahead of this to be confident that that new employment is something that is going to work out for you and your family,” he says. “That way if what plays out is different from how you expected, then you’re still in a good spot.”
Julia Chung, the founder of Spring Planning and chair of the Financial Planning Association of Canada, suggests people ask themselves some key questions before making any decisions.
“What I want people to do is first, before you want to try and take actions, step back and really think about what do I know, what don’t I know, and what are the components that I can actually control,” she says.
Track your spending
Looking at how you spend your money sounds a lot like cutting back on purchases. But Marques says it again goes back to the idea of regaining control.
“There is a lot of merit to tracking your expenses and just being able to have a sightline on what’s going on, whether you have a lot that you can do about it or not,” she says, noting how many of her clients in “grim” financial situations have felt better after seeing their spending laid out.
By keeping a log of where you’re spending your money, Marques says people can better “diagnose” what is happening and make more informed financial choices. This then can better help you cut any frivolous spending you may have, or find cheaper alternatives to some of the basics.
Even if people have already cut back as much as they can, Marques believes tracking expenses can alleviate stress.
“Truly nothing makes people feel worse about their money than having no idea what is going on with their money,” she says.
Take advantage of current interest rates
While experts generally recommend not changing your financial planning in the face of Trump’s tariffs, some suggest capitalizing on current interest rates before they potentially go up. Since June 2024, the Bank of Canada has steadily cut interest rates to today’s rate of 2.75 per cent from a peak of five per cent.
Marques says this is particularly important for people needing to pay off debt.
“If tariffs are going to impose an inflationary environment, typically the way inflation is combated is by increasing interest rates to try to drive inflation back down, which is going to be great for savers when interest rates go up,” she explains. “But that’s going to be really painful for anyone who’s already carrying large debts or a variable-rate mortgage that truly might break the budget for them.”
For those facing high credit card debt, Marques recommends contacting your bank to switch to a low-interest card sooner rather than later.
“That’s an easy thing you can do to help relieve your burden right now,” she says, adding there’s typically no special eligibility requirements for the lower-rate card.
On the more extreme end, Marques says current interest rates could be a good opportunity to move somewhere less expensive, particularly because rent or a mortgage are typically bigger items on peoples’ budgets.
“If now there’s an opportunity to reduce that aspect, that can go a really long way for anyone who feels like they’re already doing everything that they can possibly do.”
Wilson agrees that cutting down on rent or mortgage payments would go a long way, but he again cautions against making a big move before it’s clear exactly how the tariffs will impact the economy.
We’re in it together
Trump’s tariffs — and the anticipated economic fallout — have a lot of people worried. And Marques believes keeping this fact in mind can provide a bit of comfort.
“We’re in this together,” she says, “This is not you. This is just the facts of the matter right now. And a lot of people are dealing with this and feeling this way.”
Chung has similar advice, hearkening back to past periods of economic uncertainty, such as when the U.S. and Canada were last in a tariff war in the 1980s over Canadian lumber.
“It may not have happened before in your lifetime,” Chung says, “but we’ve been through a lot and we are resilient people. We have recovered from some pretty crazy stuff before.”
It’s also OK for people to admit to their friends and family that some things aren’t affordable right now, says Janet Gray, an Ottawa-based advice-only financial planner. She adds this could be a chance for parents to teach their children about financial responsibility.
“It’s a good moment to say to the kids, ‘OK, we don’t have the money. That’s why we’re not going on a summer holiday this year,’ or, ‘That’s why we’re not buying the new car that we’re all so excited about.’ ”
With files from Estella Ren
