Monday, January 7, 2013

Your Fiscal Cliff

Photo Disclaimer: This is photo shopped. Sheep are much smarter than this, depsite the stereotyping.

I imagine everyone has already heard that you’ll take a major hit on payroll taxes. This means anywhere from $130 to $800 loss per month depending on your income. Two-income family may need to double those figures. One family asked how they would deal with the income loss; their response was make one less trip to Disneyworld than their usual three. I didn’t go to Disney once last year so I have to make cuts elsewhere.

                Budget Cuts

1.       Dining out- even the fast food drive-thru can cost you$20-38 depending on the size of your family. A sit-down dinner can run from $50-65. Less meals out can help with your budget.

2.       Brown bagging your lunch at work—Those who go out spend $30-$65 a week on modest lunches based on five days, which does not include the price of gas.

3.       Your ride-the price of gas hovering around four dollars didn’t make you trade in your gas-guzzler? Now that you have even less money to put in it, you might reconsider. At least, combine your trips.

4.       Your home-remember to turn off lights, and lower your thermostat. No one needs to take ten minutes showers either.

5.       Limit the spa services-your tax bite will be passed on to your manicurist or masseuse.

6.       Grocery shopping- you’ve seen the prices sneak up while containers actually shrank. Shop for the weekly deals, the generic brands, clearance items, and pass on some of the old standbys. Substitute turkey burgers for hamburgers.

7.       Dry cleaning is a luxury, especially when you can wash the sweater yourself, or iron your shirt. Your wool coat does need to go to the cleaners, though.

8.       Cable and cell plans- time to trim it back. Do you need Internet if you have a smart phone? Sure, you can use your Internet at work, Wi-Fi hotspots, and the library. You really don’t need all those channels either. We manage without cable by using Hulu Plus and Netflix, saving about $70 a month.

9.       Luxuries—this is different things to different people. It could be a full service car wash, fresh flowers, and your specialty coffee and a scone on your way to work. Knock it down to once a month, and it will be a treat.

10.   Impulse or emotional shopping-You know you can’t afford it, but it makes you feel good. Having worked in retail, I know frequent returners are in the computer. What happens is the store will start refusing your returns. Even stores such as Kohl’s who advertise they will accept any return, now often gives you store credit leaving you in the same place. Feeling blue, exercise; it has the same effect without the price tag.

11.   Got a stockpile of goodies, you can’t return or use. Sell them online.

12.   Boycott your credit cards-if you can’t afford to pay cash, then you can’t afford it.

13.   No is not a dirty word-some people are afraid to tell their kids they can’t have an expensive pair of sneakers, dress, or car. Better, they learn now before they are in major debt. Make sure to tell yourself no too.

14.   Pets-some pets tend to cost as much as children do. Fluffy can eat ordinary cat food. Why not? You’re not dining on lobster and filet mignon. Take advantage of shot clinics at your local pet store or Feeders Supply.

15.   Use it up. Don’t toss an almost empty bottle of shampoo out. Add water to it to get the last bit out.

16.   Highlights kill your wallet. If you are a fan of highlights then you know they are expensive. They are out currently. If you can’t bring yourself not to highlight, just do it around the face.

17.   Memberships-reconsider your health club, country club, professional organization or sorority as to the benefit you receive. Many country clubs contracts will bill you for so much money a month for dining expenses even when you don’t dine there.

18.   Check your credit card statement-you could be billed for items you never signed up for or knew about. More likely, you are being double billed on a few items.

19.   Vacations-they are luxury. If you can’t afford them, then don’t go. If you are charging it, then you can’t afford it.

20.   Gifts-you cannot buy friendship or favor with gifts…no matter how pricey they are. Best gift I received was having my husband reformat my novel. It was something I couldn’t do and took work as opposed to dollars.

21.   Alcohol-Restaurants make their profits on alcohol, desserts, and side dishes. Drinks run between 6-10 dollars depending on the place. A couple who orders the 9.99 dinner special trying to save money, but then orders two drinks each, has rang up about a $60 bill for a rather modest meal.  Simple answer: drink at home.

22.   Movies: go to matinees, use frequent moviegoer’s card that allows you to see movies for five dollars. Pass on the refreshments.

23.   Rush tickets—not the band, but tickets that are sold on the day of the performance at greatly reduced prices. The downside is you might not get tickets, and they might not be together. The upside is I have sat in $180 seat for $8.Season ticket holder chose not to attend.

24.   Shopping is not a hobby-When you shop, have a list. Don’t deviate from it. Don’t try on things you aren’t going to buy. Salespeople know that they have an 80% chance of you buying if they get it in your hands. The psychology behind it is once you touch something, drive it, or wear it…your mind acts as if you own it already.

25.   Pay your bills on time to avoid late fees.


Watch your bottom line before you go over your own fiscal cliff.

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