The state of the economy is making a lot of us nervous about our finances.
Tariffs, high prices and the threat of a recession are causing a lot of confusion in the financial markets, according to Bobbi Rebell, an author and certified financial planner. "That means it is more important than ever to focus on the things we can control," she said.
My colleague Katherine Watt recently outlined the most important tips we can all follow to prepare for an economic downturn. Padding our emergency fund, evaluating large expenses and keeping our savings accessible are just a few ways to start thinking ahead.
Here's how I'm using that advice to prepare my finances for the next year.
I'm saving for big-ticket necessities
Costly necessities aren't usually factored into your emergency fund, but they can be a financial setback if you aren't prepared to pay a big expense on a whim. Think about your insurance premium, property taxes or even expensive summer camp costs that come up every year.
I started by listing the big-ticket expenses I have to pay every year, including the estimated amount and due date, to help me prioritize my savings plan. Here's a list of upcoming estimated expenses.
Expense | Amount | Due date |
Property taxes | $2,000 | January 2026 |
HOA fees | $700 | End of every quarter |
Back-to-school costs | $250 | August 2025 |
Car taxes | $150 | January 2026 |
To start, I'm planning to tackle two expenses and add more later as I make progress. I'm earmarking $15 toward car expenses and $50 for back-to-school costs each month. Even though it'd be nice to have all the money saved for these costs in advance, setting aside even a portion of it over the next several months gives me peace of mind.
Where you save the money matters
Experts recommend saving for ongoing expenses in a high-yield savings account so you can regularly contribute money and withdraw it when you need to. Having that liquidity is especially important in a shaky economy.
HYSAs are safe and offer higher returns than traditional savings accounts. The only drawback is that their variable rates can change depending on the economy. If, for example, the Federal Reserve lowers interest rates later this year, banks are likely to reduce savings rates, too.
My HYSA is with Ally Bank, which currently offers a 3.6% annual percentage yield. While that rate is lower than it was a year ago, it's still better than keeping my funds in a regular checking account with an APY close to 0.07%.
Ally has a unique feature to keep my money organized called "buckets," almost like envelopes full of cash for separate goals. Ally's saving buckets digitally organize the funds I set aside in different categories that I choose, while I continue earning that 3.6% rate on my entire savings balance. Savings buckets allow me to track progress for each expense — like a new family car, travel and emergency fund — while keeping my money secure in the same account.
Planning ahead and putting your money in a HYSA gives you flexibility and confidence to afford big-ticket necessities when the time comes.
