5 Ways to Strengthen Your Financial Foundation 

When the economy feels uncertain — whether due to inflation, climbing interest rates, or rising costs — your financial habits matter more than ever. Financial resilience isn’t just about how much you earn, but how effectively you prepare, protect, and position your finances.  

Here are five ways to strengthen your financial foundation and safeguard your finances. 

1. Build or replenish your emergency fund. 

An emergency savings account gives you a buffer when the unexpected happens. Whether it’s job loss, medical bills, or a surprise car repair — having three to six months of essential expenses set aside can prevent you from relying on high-interest credit cards. If you are expecting a tax refund, consider directing a portion to kickstart or replenish your emergency fund. Using Turbotax can help ensure you receive the maximum refund you’re eligible for, whether you’re doing your taxes yourself or you have a tax expert prepare them for you.

2. Focus on your income. 

Increasing your income by negotiating a raise, switching jobs, or starting a side hustle can give you more financial flexibility. However, increased income  may come with added tax complexities, especially if you’re self-employed. Side gigs and  freelance work may require estimated quarterly tax payments, but they also create opportunities for business-related deductions. If navigating  business tax rules seems overwhelming, TurboTax has experts ready to provide self-employed guidance. They can help you claim deductions like home office expenses or mileage that can help reduce your taxable income and keep more money in your pocket. 

3. Eliminate high-interest debt. 

Paying off high-interest credit card debt can free up room in your budget for saving, investing, or tackling other goals. If you’re unsure where to start or how to get  the best rates, Credit Karma offers personalized insights on your credit profile to help compare loan and credit card options that may lower your interest rates or help consolidate your payments. While  credit card interest is not tax-deductible, interest paid on other types of debt  such as student or mortgage loans, may be eligible for a tax deduction. 

If you’re tackling multiple debts, consider a structured payoff strategy. Two popular approaches are the snowball and avalanche methods. The snowball method focuses on paying off your smallest balance first to help you build momentum. While the avalanche method tackles the debt with the highest interest rate first to save the most money over time. Pick an approach that will keep you motivated and consistent. Tackling debt strategically now can build long-term stability.

4. Be strategic with your spending. 

Make intentional choices by tracking and trimming your spending. This is about being efficient, not depriving yourself. You don’t have to cut all the fun from your budget to stay on track. Practicing good financial hygiene, like regularly reassessing your recurring expenses, can help you spot areas to free up cash and redirect the money toward your goals. If you have a small business or do freelance work, diligently track expenses that can qualify as business deductions like a percentage of your internet bill, business travel, software subscriptions  and all business-related purchases for easier and more efficient filing at tax time. 

5. Invest with intention. 

Investing in tax-advantaged accounts like a traditional IRA, Roth IRA, or 401(k) will not only help you build long-term wealth, but can also provide immediate or future tax benefits. Contributions to a traditional IRA or 401(k) can reduce your taxable income in the year you make them, while qualified withdrawals in retirement are tax-free from a Roth IRA. 

Investing in yourself can be just as valuable. Taking a course or earning a certificate can not only open doors to higher income opportunities, but the  costs may also qualify you for the Lifetime Learning Credit — worth up to $2,000 annually.  

Financial resilience isn’t built overnight; it comes from consistent and informed choices that accumulate over time. Whether you are adjusting to current economic times or laying the foundation for long-term goals, working to take proactive control of your finances is the most reliable way to  stay steady and prepared for whatever comes next.