Finding money to offset the Social Security tax hike
When the Social Security payroll tax rate was reduced for 2011 and 2012 from 6.2 percent to 4.2 percent, the intent was to put more money in your pocket to stimulate spending nationwide. Whether or not it worked out quite that way is debatable. However, the rate increased back to the former level in January 2013. Even if you were fortunate enough to have received a raise this year it’s likely this tax increase wiped out some or most of it. But you don't have to let it ruin your budget. Check out the following tips from the National Foundation for Consumer Counseling to can help you stretch your paycheck.
- Adjust your withholding – if you receive a large tax refund each year you could adjust your withholding to have the extra money each month. Use the worksheet at www.IRS.gov to calculate the correct number of withholding allowances.
- Pay with cash – people who pay for purchases with cash typically save 20% compared to previous credit spending and never feel deprived.
- Ten dollars from 10 categories – look at your budget and try to carve $10 off of 10 spending categories.
- Clean out the garage or closet – sell the contents and eliminate the need for extra storage. Savings are even bigger if you have a storage unit and you can eliminate the storage costs by selling the contents.
- Save on insurance premiums – review all your policies and check around to compare rates. Ask your agent about discounts for loyalty, good driving and bundling of policies.
- Refinance your mortgage – if you haven’t already. Rates are still at historically low levels. Call our Mortgage Center at 904.720.1758 for more information on our mortgages.
Keeping to a budget doesn't have to hurt. Just be smart about how and where you spend your money. Do whatever it takes to refrain from impulse purchases, and if you eat out pay a little extra for the dinner portion, split it and box half the meal for later.
Every dollar you can save will help you stay on track and avoid running out of money before you run out of month.
Find more information on the National Foundation for Consumer Counseling website: http://financialeducation.nfcc.org