Tips To Save Money After Payroll Tax Break Expires
With the social security payroll tax expired, paychecks are diminishing while bills remain the same. NY1's Tara Lynn Wagner has some tips on how to make up for lost cash.
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This year, you're probably finding yourself having to do more with less. That's because a two year break in social security payroll taxes expired, bringing the amount from 4.2 percent back to 6.2 percent at the start of this year.
"Someone making $41,000, let's say, is now making $64 less per paycheck, which amounts to about $770 dollars per year," LearnVest founder and CEO Alexa von Tobel says. "That's real money."
So how do you make up that missing 2 percent? Coupons.com savings expert Jeanette Pavini says look within your budget.
"You have to see what things are set in stone and what things you have some control and flexibility over," Pavini says.
While mortgages and tuition are probably difficult to adjust, von Tobel says you'll be surprised where you can find wiggle room.
"You can negotiate everything," von Tobel says. "So I recommend that you call up almost all of your major bills and providers.
That means gym membership, cell phone bill and car insurance. Call and ask for a lower price or see what you can do to earn a reduction.
"You can simply take an online driving course for a few hours and save yourself 10 percent," von Tobel says.
Another way to make up for Uncle Sam's bigger bite is to alter how much you send him each pay period.
So talk to your tax preparer about adjusting your withholdings.
"You want to basically get as little back in a refund as possible," von Tobel says. "The reason being is you don't want to give an interest free loan to the government."
Coupons and shopping sale circulars are great ways to cut back, but if you want to bag the biggest savings, bring your lunch.
"I did a little research, it's something like $11.32 for a sandwich, chips, cookie and drink," Pavini says.
Whereas using coupons to buy those items and make your lunch at home will cost you about $2 a day. That's a $9 savings.
Finally, you can try making up for making less by making more.
"If you are up for a review, you should make sure that every single review you are asking for a raise, especially if you are doing a great job," von Tobel says.
If that's not an option, at least there are strategies to help you take financial matters into your own hands.
"You have to give yourself a raise is what we're going to have to do this year," Pavini says.