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Fiscal Cliff Payroll Tax Increase
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Fiscal Cliff Payroll Tax Increase

The looming fiscal cliff deal has left a bad taste in the mouth of many American workers. People will start to see a reduction in pay on the first paycheck of the new year and unfortunately this will remain for the rest of the year as a result of the fiscal cliff payroll tax increase. The tax rate increase from 4.2% to 6.2% means paychecks will be smaller and people will have to budget a little better to make up for lost funds. In an economy where people are already living paycheck to paycheck and don't have much in the budget for extras like going out to dinner, getting tickets to a concert or planning a vacation this tax increase is not a popular outcome for many.

The fiscal cliff payroll tax increase certainly isn't the end of the world, but people are going to have to start watching their spending even more and will have to start planning a little better. Even when it seems like you are already cutting corners and saving as much as possible there are still things that people can do to reduce their spending.

Brew at home- If you are a coffee drinker and rely on your morning coffee to get you through the day, you will save a considerable amount of money by brewing your coffee at home versus getting it at a Starbucks or other specialty coffee shop on your way to work. For just your plain regular drip coffee you will pay $1.75 for a large, if you order any of the fancy stuff like a mocha that will run you about $4.25. Depending on how often you stop for coffee, these costs can add up quick.

Stay in for movies- Depending on where you live, it could cost you upwards to $14 per ticket to go out to see a movie. Consider staying in for movie nights by renting or streaming movies on Netflix, Vudu, Amazon, Hulu or On Demand. The drawback to this is that you may have to wait a little while to watch new releases but sometimes you can rent movies that are still in the theaters. I have been able to do this through On Demand and Vudu.

Cook Dinner at home- Eating out can be very expensive, and if you go out once or twice a week it can really add to your expenses. I know that it's kind of a pain to come home from a long work day and have to cook but if you are diligent about it you will save money in the long run.

Carpool or take public transportation- To save gas money and wear and tear on your car, consider carpooling with a co-worker. Some companies will even give you an incentive for carpooling and give you a better parking spot closer to the building. You can also take public transportation and save a significant amount of money on gas, parking and also some sanity from sitting in traffic. At least while you are traveling with public transportation you can read a book, work on some homework or to-do lists, or even catch up on some Facebooking. If you don't wish to use public transportation as your primary way to get to work, you can use it a few times a week and still save, not to mention help the environment!

If you are already doing most of these things and are still having trouble staying afloat you might want to consider supplementing your income with a part-time job or picking up some work here and there for some extra cash to make up for the higher taxes and lost income. If you aren't sure where to look for extra work it helps to network with others to see what is out there. You can post a message on Facebook or even join an online business community to gain support and tips on how to generate extra income.

If you have any other ideas on how to save money, please share them in the comments below!


Street Talk

All good ideas, but the real people who need to start practicing how to spend money wisely are not reading this unfortunately.

Reply
  about 5 years ago

You are totally right. It really is unfortunate.

Reply
  about 5 years ago
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