Lords and Ladies, I am the bearer of bad news this first day of January 2013. I’m only telling you because I love you and because I don’t want you to be shocked when your receive your first check of 2013. And I want you to be able to adjust your budgets accordingly. Don’t go all Chicken Little on me. The sky is not falling. You will survive. And there’s a possibility midyear the government could reverse this. However, as of today . . .
Do NOT set your budgeted income at the same amount you earned per paycheck in 2012. And it has nothing to do with the fiscal cliff. You see the Social Security Payroll Tax cut is set to expire today. That means the cut that Americans have had for the last two years is going bye bye and your check is going to be a percentage smaller in 2013 whether or not the House passes the Fiscal Cliff mumbo jumbo today. The tax is returning to its pre-2010 rate of 6.2% {we once paid this much already, we’re just used to the last 2 years of not paying}.
This is not a political discussion. So don’t light up my comments. 😉 It is a household discussion. So that you can artfully prepare your budget for the year ahead. I’m doing the same today because of my oversight.
You will have less in your check. Here are my estimates:
- Make $30K/year? Expect $46 less per month.
- Make $50K/year? Expect $77 less per month.
- Make $100K/year? Expect $154 less per month.
You can use the Wall Street Journal’s calculator here.
Big Royal Frowny Face. Time to adjust your budget. Time to see what you can sell around the house to make up the difference. Time to see where you can reduce spending. Time to research new ways to save.
You can do this and at least you’re going into it with the knowledge that it’s coming, right? Knowledge is power. Now go out there and own your budget.
