MW Don't just ride out 2025 financial uncertainty - adapt to it. These 7 strategies can help.

By Venessa Wong

It's time for your midyear financial checkup. Financial planners have new answers to questions on how to save, invest and spend.

As the economic outlook bounces up and down along with President Donald Trump's ongoing tariff negotiations, people are finding it harder than ever to plan for the future, including making major decisions about their money.

Those planning big moves in 2025 - for instance, buying a home or car, switching jobs or retiring - are weighing considerations they may not have factored in previously, including tariff-fueled price increases and job stability in a wobbly economy.

"2025 has made one thing crystal clear: Even the illusion of predictability is gone," Melissa Caro, a financial planner and the founder of digital-media platform My Retirement Network, told MarketWatch. "What I'm seeing this year isn't a rejection of long-term planning. It's a reckoning with how shallow or fragile many plans really were."

While economists lowered their expectations for a 2025 recession after the U.S. and China temporarily paused tariff increases through mid-August, it remains unclear where negotiations will ultimately land.

Even as the financial markets rebounded from their April lows, Americans "remained quite worried about the future" in May, according to the University of Michigan's latest survey of consumers.

"The economic noise - from changing tariff headlines to shifting inflation expectations - has people rethinking both spending and saving strategies, even if temporarily," said Eric Nelson, a financial planner at Independence Wealth. "2025 isn't about abandoning long-term plans - it's about being sharper around the edges. Clients want to feel like they're not just riding out uncertainty, but proactively adapting to it."

Investors should ask themselves how they have felt over the past couple of months of stock-market volatility, said David Rosenstrock, financial planner at Wharton Wealth Planning. If it made them extremely uncomfortable, that might be a sign that they need to rethink their plan for their money.

As the money-conscious prepare for their midyear financial checkups, MarketWatch spoke with financial planners about seven questions people can ask themselves as they fine-tune their financial decision making to adapt to unpredictable, and often uncomfortable, conditions in 2025.

1. How much should I have in savings in 2025?

A lot more than you think, probably. The risk of a recession is still "uncomfortably high," Moody's Analytics $(MCO)$ economist Mark Zandi recently said on X.

Having money saved may not be exciting, but it is the foundation of financial stability and can help you avoid having to make decisions out of desperation.

In 2025, many financial planners have been suggesting that people have enough savings to cover six to 12 months of expenses in the event of job loss - way more than the rule of thumb of three to six months' worth -because the average length of unemployment has increased to more than five months this year.

Others are even more conservative: Mary Clements Evans, a financial planner and founder of Evans Wealth Strategies, told MarketWatch that everyone should have enough cash to cover not only an emergency fund of six months, but any major expenses they see coming up in the next two years as well - such as a car purchase, college tuition or home repairs. Clements Evans said she has looked at every bear market since 1929, "and they tend not to stay down more than two years." Having enough cash to remain stable for two years when your investment accounts might be down "helps you stay calm and not sell out during volatile times," she added.

"The longer your financial runway, the more resources and freedom you have to explore different paths," said financial planner Benjamin Daniel. If you're worried about layoffs, he added, "having six extra months of cash can help you reskill, relocate or simply give you the means to wait for the right opportunity. Optionality means you don't just survive disruption. You give yourself a shot to come out better on the other side."

Americans seem to be taking note. While a Bankrate survey last May found that only 28% of Americans said they could cover six or more months of expenses, 2025 has been a big year so far for savings. After splurging for years, more people have reported increasing their emergency fund in recent months as a buffer against uncertainty - "revenge saving," so to speak. The personal-saving rate rose to 4.9% in April, and SecureSave, which administers employer-sponsored emergency savings accounts, recently told MarketWatch that average account balances are up this year, as are average deposits.

Related: Americans are 'revenge saving' after years of splurging

2. How do I time my purchases around tariffs in 2025?

As some Americans focus on saving, others are trying to optimize the timing of purchases such as cars, appliances and apparel as tariffs threaten to make imported goods more expensive. Primarily high-income consumers have moved up purchases to get ahead of tariffs taking effect. Meanwhile, middle- and low-income consumers, who may not have as much flexibility to spend, reported cutting back on nonessential expenses.

It's never financially wise to go into debt - especially high-interest credit-card debt - in order to fund nonessential purchases. But the planners MarketWatch spoke with did not have a unanimous view about spending now to save later, especially with the on-again, off-again way tariffs have played out so far in 2025.

More on this: Your money playbook for Trump's tariffs: Here's what to buy now - and later

Craig Toberman, a partner at Toberman Becker Wealth, told MarketWatch it's not a bad idea to speed up certain purchases. "With geopolitical tensions on the rise, there's at least a nonzero chance we return to a more fragmented, less reliable global trade environment," he said. "Accelerating purchases of critical goods that impact our daily and professional lives such as iPhones, laptops and other work-related essential tech can be a practical way to hedge some of that risk and stay ahead of potential disruptions."

Meanwhile, other planners said keeping cash in tumultuous times like these is more useful for many clients than buying stuff. "Buying something with the idea that the price is going to go up is a form of risk-taking, like gambling," said Crystal McKeon, a financial planner at TSA Wealth Management, adding that a savvier move may be to "accumulate cash."

"There will come a time when you have a more educated position on the effect of tariffs, and you can make a nonstress purchase," she said. "Like anxiety in most situations, purchases under duress rarely work out."

3. How should I account for rising costs in my 2025 budget?

Consumer prices have continued to rise in 2025. One strategy to account for these rising costs is to categorize potential purchases by whether they're needs, wants or wishes, Nelson said. Working through this framework makes it clearer which expenses are up for debate if tariff-related price hikes blow up your existing budget.

"Many are surprised how much flexibility exists in the 'wants' and 'wishes' categories," he said. The goal is "spending in line with what matters most, especially in uncertain times like 2025."

Read more: Tariffs could cost Americans an extra $1,600 a year. Here's where to find that money in your household budget.

4. I want to buy a home in 2025. How much should I spend when housing prices are still so high?

Housing remains a huge challenge for most Americans, as prices are historically high: The median price of a resale single-family home was $407,300 in March. Yet many people are mentally prepared to spend too much on housing, leaving too little for all of their other needs and financial goals, said Kyle McBrien, a senior financial planner at Betterment.

While there's no outrunning the housing market, one strategy McBrien is implementing with home buyers this year is making a budget that puts housing farther down a list that prioritizes other needs first. Saving housing for last can act as a safeguard against overspending, the thinking goes. For example, you might budget for emergency and retirement savings first, then groceries, transportation, child care, debt payments and other costs. After meeting all of those needs, you can see what's left in the budget for housing, as well as nonessential expenses. This approach is an alternative to the process people might go through with a real-estate agent or lender that focuses on the upper limit of what a buyer can borrow for a mortgage.

McBrien adds that total housing expenses - including insurance and taxes - should stay below 28% of gross household income. This ratio is one standard lenders use, because borrowers who keep housing costs below this threshold are more likely to make their mortgage payments. Even getting close to that 28% limit can strain finances, depending on a household's other necessary expenses, including routine home maintenance, which people may also want to include as part of that 28%.

"With the volatility in 2025, what I'm asking people is, do you need to buy a house right now? Does your life dictate that you need to buy a home?" McBrien said. If today's high home prices don't work for you, he added, "just wait. No one's making you buy right now."

5. Is 2025 a good year to aggressively grow my portfolio?

Even in 2025, the question of how to allocate your investment portfolio depends on how close you are to retiring.

"For someone far from retirement, I think their average fixed-income/bond portfolio size should be around 15% to 25% of their total portfolio, whereas someone closer to retirement, 10 years out, may want to have around 25% to 40% of their total portfolio in fixed income," said Rosenstrock.

MW Don't just ride out 2025 financial uncertainty - adapt to it. These 7 strategies can help.

By Venessa Wong

It's time for your midyear financial checkup. Financial planners have new answers to questions on how to save, invest and spend.

As the economic outlook bounces up and down along with President Donald Trump's ongoing tariff negotiations, people are finding it harder than ever to plan for the future, including making major decisions about their money.

Those planning big moves in 2025 - for instance, buying a home or car, switching jobs or retiring - are weighing considerations they may not have factored in previously, including tariff-fueled price increases and job stability in a wobbly economy.

"2025 has made one thing crystal clear: Even the illusion of predictability is gone," Melissa Caro, a financial planner and the founder of digital-media platform My Retirement Network, told MarketWatch. "What I'm seeing this year isn't a rejection of long-term planning. It's a reckoning with how shallow or fragile many plans really were."

While economists lowered their expectations for a 2025 recession after the U.S. and China temporarily paused tariff increases through mid-August, it remains unclear where negotiations will ultimately land.

Even as the financial markets rebounded from their April lows, Americans "remained quite worried about the future" in May, according to the University of Michigan's latest survey of consumers.

"The economic noise - from changing tariff headlines to shifting inflation expectations - has people rethinking both spending and saving strategies, even if temporarily," said Eric Nelson, a financial planner at Independence Wealth. "2025 isn't about abandoning long-term plans - it's about being sharper around the edges. Clients want to feel like they're not just riding out uncertainty, but proactively adapting to it."

Investors should ask themselves how they have felt over the past couple of months of stock-market volatility, said David Rosenstrock, financial planner at Wharton Wealth Planning. If it made them extremely uncomfortable, that might be a sign that they need to rethink their plan for their money.

As the money-conscious prepare for their midyear financial checkups, MarketWatch spoke with financial planners about seven questions people can ask themselves as they fine-tune their financial decision making to adapt to unpredictable, and often uncomfortable, conditions in 2025.

1. How much should I have in savings in 2025?

A lot more than you think, probably. The risk of a recession is still "uncomfortably high," Moody's Analytics $(MCO.AU)$ economist Mark Zandi recently said on X.

Having money saved may not be exciting, but it is the foundation of financial stability and can help you avoid having to make decisions out of desperation.

In 2025, many financial planners have been suggesting that people have enough savings to cover six to 12 months of expenses in the event of job loss - way more than the rule of thumb of three to six months' worth -because the average length of unemployment has increased to more than five months this year.

Others are even more conservative: Mary Clements Evans, a financial planner and founder of Evans Wealth Strategies, told MarketWatch that everyone should have enough cash to cover not only an emergency fund of six months, but any major expenses they see coming up in the next two years as well - such as a car purchase, college tuition or home repairs. Clements Evans said she has looked at every bear market since 1929, "and they tend not to stay down more than two years." Having enough cash to remain stable for two years when your investment accounts might be down "helps you stay calm and not sell out during volatile times," she added.

"The longer your financial runway, the more resources and freedom you have to explore different paths," said financial planner Benjamin Daniel. If you're worried about layoffs, he added, "having six extra months of cash can help you reskill, relocate or simply give you the means to wait for the right opportunity. Optionality means you don't just survive disruption. You give yourself a shot to come out better on the other side."

Americans seem to be taking note. While a Bankrate survey last May found that only 28% of Americans said they could cover six or more months of expenses, 2025 has been a big year so far for savings. After splurging for years, more people have reported increasing their emergency fund in recent months as a buffer against uncertainty - "revenge saving," so to speak. The personal-saving rate rose to 4.9% in April, and SecureSave, which administers employer-sponsored emergency savings accounts, recently told MarketWatch that average account balances are up this year, as are average deposits.

Related: Americans are 'revenge saving' after years of splurging

2. How do I time my purchases around tariffs in 2025?

As some Americans focus on saving, others are trying to optimize the timing of purchases such as cars, appliances and apparel as tariffs threaten to make imported goods more expensive. Primarily high-income consumers have moved up purchases to get ahead of tariffs taking effect. Meanwhile, middle- and low-income consumers, who may not have as much flexibility to spend, reported cutting back on nonessential expenses.

It's never financially wise to go into debt - especially high-interest credit-card debt - in order to fund nonessential purchases. But the planners MarketWatch spoke with did not have a unanimous view about spending now to save later, especially with the on-again, off-again way tariffs have played out so far in 2025.

More on this: Your money playbook for Trump's tariffs: Here's what to buy now - and later

Craig Toberman, a partner at Toberman Becker Wealth, told MarketWatch it's not a bad idea to speed up certain purchases. "With geopolitical tensions on the rise, there's at least a nonzero chance we return to a more fragmented, less reliable global trade environment," he said. "Accelerating purchases of critical goods that impact our daily and professional lives such as iPhones, laptops and other work-related essential tech can be a practical way to hedge some of that risk and stay ahead of potential disruptions."

Meanwhile, other planners said keeping cash in tumultuous times like these is more useful for many clients than buying stuff. "Buying something with the idea that the price is going to go up is a form of risk-taking, like gambling," said Crystal McKeon, a financial planner at TSA Wealth Management, adding that a savvier move may be to "accumulate cash."

"There will come a time when you have a more educated position on the effect of tariffs, and you can make a nonstress purchase," she said. "Like anxiety in most situations, purchases under duress rarely work out."

3. How should I account for rising costs in my 2025 budget?

Consumer prices have continued to rise in 2025. One strategy to account for these rising costs is to categorize potential purchases by whether they're needs, wants or wishes, Nelson said. Working through this framework makes it clearer which expenses are up for debate if tariff-related price hikes blow up your existing budget.

"Many are surprised how much flexibility exists in the 'wants' and 'wishes' categories," he said. The goal is "spending in line with what matters most, especially in uncertain times like 2025."

Read more: Tariffs could cost Americans an extra $1,600 a year. Here's where to find that money in your household budget.

4. I want to buy a home in 2025. How much should I spend when housing prices are still so high?

Housing remains a huge challenge for most Americans, as prices are historically high: The median price of a resale single-family home was $407,300 in March. Yet many people are mentally prepared to spend too much on housing, leaving too little for all of their other needs and financial goals, said Kyle McBrien, a senior financial planner at Betterment.

While there's no outrunning the housing market, one strategy McBrien is implementing with home buyers this year is making a budget that puts housing farther down a list that prioritizes other needs first. Saving housing for last can act as a safeguard against overspending, the thinking goes. For example, you might budget for emergency and retirement savings first, then groceries, transportation, child care, debt payments and other costs. After meeting all of those needs, you can see what's left in the budget for housing, as well as nonessential expenses. This approach is an alternative to the process people might go through with a real-estate agent or lender that focuses on the upper limit of what a buyer can borrow for a mortgage.

McBrien adds that total housing expenses - including insurance and taxes - should stay below 28% of gross household income. This ratio is one standard lenders use, because borrowers who keep housing costs below this threshold are more likely to make their mortgage payments. Even getting close to that 28% limit can strain finances, depending on a household's other necessary expenses, including routine home maintenance, which people may also want to include as part of that 28%.

"With the volatility in 2025, what I'm asking people is, do you need to buy a house right now? Does your life dictate that you need to buy a home?" McBrien said. If today's high home prices don't work for you, he added, "just wait. No one's making you buy right now."

5. Is 2025 a good year to aggressively grow my portfolio?

Even in 2025, the question of how to allocate your investment portfolio depends on how close you are to retiring.

"For someone far from retirement, I think their average fixed-income/bond portfolio size should be around 15% to 25% of their total portfolio, whereas someone closer to retirement, 10 years out, may want to have around 25% to 40% of their total portfolio in fixed income," said Rosenstrock.

(MORE TO FOLLOW) Dow Jones Newswires

June 09, 2025 14:58 ET (18:58 GMT)

MW Don't just ride out 2025 financial uncertainty -2-

Caro agreed that for those far from retiring, "the solid plan here [is] likely 80% to 100% equities, globally diversified, and totally hands-off with a defined rebalancing policy - not reactive moves." Emotionally, however, she has found that "this group usually struggles the most" during volatility. "Automatic contributions, diversified equity exposure and strong behavioral coaching" from a financial adviser can help a lot, she said.

Those who have been focused on growth may now find themselves primarily invested in the big tech sector through a few stocks, such as the "Magnificent Seven," a group of stocks that experienced a huge drop earlier this year following tariff announcements, Rosenstrock said. Shares of the seven megacap tech companies have rebounded but have still been a drag on the S&P 500 SPX and continue to face significant risk resulting from trade policy. Even for investors far from retirement, Rosenstrock recommends adjusting for "a balanced mix" of growth and value stocks "to reduce portfolio volatility and ultimately improve returns over the long run," he said.

More from MarketWatch: The U.S. is 'on the precipice' of recession. Follow these 10 money rules to protect your wealth.

6. I plan to retire soon. How can I stay on track while uncertainty remains so high?

People about 10 years from retiring are in the "red zone," Caro said - "close enough to retirement that losses sting, but far enough that growth is still critical." A solid financial plan reduces reliance on equities for near-term goals while keeping a healthy equity allocation overall, she said. It should also include flexible retirement-age targets and a planned spending decrease if markets underperform.

Tyson Sprick, a financial planner at Caliber Wealth Management, noted that a person's plan may also differ depending on their portfolio and spending needs. An investor who will only need to take a 2% distribution in retirement, for instance, will probably be OK with a portfolio that is 80% in investments with a time horizon of 10 or more years and 20% in bonds, cash and other less-volatile investments. "If we've got four to five years of distribution needs invested in nonequities, we feel pretty comfortable," Sprick said.

7. When should I revisit this financial plan?

A midyear check-in is especially important in 2025, as "turbulent times are a prime opportunity to revisit the foundation of any good financial plan," said Eddy Jurgielewicz, a financial planner at Upbeat Wealth.

Daniel recommends people revisiting their financial plan at least once a year, or anytime there's a significant change in their life, such as a new job, a move or a change in household size. "Your finances need to reflect your new reality," he said.

For instance, what felt like a necessary cushion during a stretch of uncertainty in 2025 might be more than you need when the economy or your personal situation becomes more stable. "That doesn't mean it was a mistake. It served its purpose. But now it might make sense to redirect it toward a new goal," such as investing, Daniel said.

However, if you work in a more volatile industry, what you set aside as extra cash in 2025 won't be considered extra anymore, he added. Instead, "it's the new minimum."

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

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June 09, 2025 14:58 ET (18:58 GMT)

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