HONOLULU (KHON2) — We are in a time of rising inflation, stagnant wages, and new tariffs; and residents of Hawaiʻi are facing a unique financial challenge relative to our sister states when you add the impacts of the Jones Act.

The costs of goods are increasing, wages aren’t keeping pace and uncertainty surrounds the future as tariffs make a comeback.

Amidst all this, Mark Leong, a financial planner with Northwestern Mutual Honolulu, offers insights on how to prepare for the economic hurdles of 2025.

Leong’s path to financial planning wasn’t straightforward. He entered the industry 14 years ago after a college internship at Northwestern Mutual. He had not idea how much he’d come to love the field.

“I didn’t know that it was something that I was going to be passionate about,” Leong said. “But when I got into it, yeah, I couldn’t see myself doing anything different now.”

However, navigating today’s economy isn’t easy; and Leong is acutely aware of the financial strain many are feeling, especially in Hawaiʻi.

“Inflation is real,” Leong said. “And tariffs are real dollars that are there.”

For many in Hawaiʻi, where the cost of living is already high, these financial pressures are going to be felt more acutely.

1. The reality of tariffs and inflation

One of the major factors affecting Hawaiʻi’s economy today is the growing tension over tariffs. Leong explained that tariffs are essentially taxes on imported goods; and when these taxes increase, businesses often pass the added costs on to consumers.

“The interpretation of everyone is that in turn, those costs get passed on to the consumer,” Leong explained. “And that affects cash flow on an individual consumer basis.”

This situation is exacerbated by rising inflation, which is straining family budgets.

“I think it’s a good time for us to say, ‘hey, there might be some big changes’,” Leong noted. “Let’s sit down and really dig into this and find where are the opportunities to get a little bit more efficient budget-wise.”

2. Financial planning: The power of budgeting

To counteract these rising costs, Leong emphasized the importance of budgeting and being proactive with your finances.

“When we sit down with someone and we actually go through someone’s budget, a lot of times we are finding things in there that can be worked in a little bit more of an efficient way,” he said.

By taking a detailed look at one’s budget, individuals can identify areas of waste and adjust their spending to reflect current financial realities. But Leong pointed out that budgeting alone is not enough.

“Budgeting is a tricky topic because a lot of people have created budgets in the past. But if you ask most people if they keep up with those budgets, the percentage is much lower,” he said.

This is where setting up systems to track and follow through on financial goals is crucial.

“People need systems in place, just like they need a personal trainer to stick to a fitness plan,” he added.

3. Finding opportunities in financial challenges

While the challenges of rising costs and tariffs may seem overwhelming, Leong encouraged a shift in perspective.

“Maybe this is a blessing in disguise,” he said. “It’s an opportunity to look at our financial habits and be more efficient.”

He encourages families to reassess their spending, reduce waste and explore alternatives, such as opting for store brands instead of name brands.

He also used a personal example to highlight this approach: “I noticed the price of avocados went up 30 to 40% recently. Instead of letting them go to waste as we usually do, I told my wife we should make sure we use them more efficiently with each meal.”

These small changes, when made consistently, can help offset the impact of inflation.

Leong suggested that people also look at their financial habits through the lens of long-term sustainability, much like committing to a healthier lifestyle rather than reacting to a short-term need.

4. Embracing financial literacy for the long term

Despite the difficulties, Leong believes that the American dream is still within reach. That is if people understand how to manage their finances.

“There’s a big financial literacy gap in terms of what people should be doing with their money to achieve that American dream,” he said. “If money is sitting there and not actively working for you, then housing prices going up will run away from you.”

The key to success is financial education, and Leong suggested that working with a professional financial advisor can help accelerate the process.

“If you have that financial knowledge or literacy, or if you work with a financial advisor, you can actually accelerate that process and change the cycle,” he explained.

5. Things to know for navigating financial challenges:

1. Understand the impact of tariffs: Tariffs can increase the cost of goods, which often gets passed on to consumers.
2. Create and stick to a budget: Track your spending and find areas where you can cut back to make your money work harder.
3. Shift your mindset: View financial challenges as an opportunity to reassess and improve your financial habits.
4. Financial literacy is key: Learn how to make your money work for you to achieve long-term financial goals.
5. Work with a professional: Financial planners can provide invaluable guidance to help you navigate these uncertain times.
6. Avoid waste: Cut down on unnecessary spending and waste, from food to luxury items, to maximize your budget.

6. A final word on budgeting

Leong’s advice for tackling the financial challenges of 2025 is clear: embrace budgeting, seek professional guidance and shift your mindset to sustainability.

While inflation, stagnant wages and tariffs present significant obstacles, Leong believes that with the right tools, people can navigate these turbulent waters.

“It’s not impossible to achieve your financial goals,” he said. “But you need to make sure your money is working for you, not sitting idly by.”

You can click here to learn more about Leong.

As Hawaiʻi faces rising costs and uncertain times, Leong’s approach offers a way forward. One that focuses on proactive planning, financial literacy and making small but impactful changes to secure a more stable financial future.