I predict saving money will become more popular in 2013. Those who save money for retirement or vacations will continue to do so, but everyone will be tightening their belts to make sure all the monthly bills get paid.
Let’s just assume Congress and the president won’t reach an agreement on this whole fiscal cliff/Bush era tax cuts issue, shall we? We may as well head into 2013 with eyes wide open. What would mean to the average Joe and Jane?
A taxpayer making between $50,000 and $75,000 would get an average tax increase of $2,400, according to the Tax Policy Center, a Washington research group. If the worker is paid biweekly, that’s about $92 a paycheck. (Patch.com)
$92 per paycheck. Can you live without that?
When you have less money in your pocket you naturally find ways to spend less. You avoid the Starbucks, pack your own lunch instead of eating out, make a shopping list (and stick to it), carpool, and trim your cable bill. You’ve probably thought of these already or practiced them out of necessity.
If you dig deeper, you may come up with even more creative ideas for saving money:
- reusing or adapting household items for a new purpose
- cleaning out your toiletries cabinet and using up all those random shampoos and soaps
- repairing items (putting a stitch or two in those holey socks, for example)
- using the cash back option from a debit card transaction instead of a bank ATM that charges fees.
No list of money-saving tips would be complete without the advice to look at refinancing your house. For homeowners that haven’t refinanced in a few years, paying too much in mortgage interest is one money-wasting crack that’s easy to seal. Of course, the lender usually requires great credit, equity in your house, and the absence of a home equity line of credit or second mortgage.
If you owe more than your house is worth and if you are not late on your mortgage payments, your mortgage company may consider modifying one or more terms of your loan.
It can reduce the principle, lower the interest rate, or extend the length of the loan.
In most cases any combination of these will decrease your payments, saving you some money each month. Even if you have been late on payments (in some cases, because you have been late on payments) the lender may grant some relief if you meet their modification guidelines. The requirements for loan modifications differ from bank to bank. Your first step is to call for information.
Now, say you have been late on payments or have missed some payments altogether, You may have already exhausted all your money saving options, just to stay afloat.
If you’re like most folks, your mortgage is the biggest payment you make each month. When it’s a stretch to pay that debt, it’s time for bigger solutions.
When saving money to make your mortgage payments begins to feel like a losing battle, a short sale or quick sale for cash can get you out from under your biggest debt. Regardless of whether the HAFA program continues into 2013, there are still some private sources that can help. You can take foreclosure off the table; it doesn’t have to be an option. Depending on your situation, you may not only save money. You could walk away with cash in hand.
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Photo Credit Flickr CC: sharpnitin