This is another one of those boring posts where I’m not going to mention anything you can shoot your way out of. :-D
Are you preparing for the Fiscal Cliff? Tax increases and spending decreases, all done in a hatchet job of across the board cuts. Probably the dumbest way we could possibly get our deficit under control. Dumb, but still legitimately a method of lowering the deficit.
I run our family budget with an eye towards getting out of and staying out of debt. The thought of our nation running up unsustainable levels of debt is really appalling. So, there is definitely a part of me that would love to see us go over “The Cliff” just to see some real, meaningful reduction in that national debt.
Then of course, there’s the other part of me. That part that is desperately trying to keep my little family fed and sheltered. I know what those tax increases would mean for our budget.
Here’s an estimate from an online source: I’ll only copy over the lowest income level, because I highly doubt we have many readers who make $100,000. The right side of the table shows the tax rate and the projected dollar amount for the two filing statuses.
|Income Level / Filing status||Single||Married
|$50,000||$1,576 / 18%||$1,870 / 26%|
Here’s where I found a nifty online Calculator: http://www.paycheckcity.com/fiscalcliff/cliff.html
$2000, I know we need to plan on paying out at least that much more next year in taxes. Our bill might be less than that in reality, but I would rather plan for the worst and hope for the best. It’s doable, we paid more than that in medical expenses this year. Doable, but not fun, and definitely not something I want to put off until I file our taxes in February.
So, hubby and I are making preparations.
We’re putting more in savings. We always put some each month in savings, but I’ve doubled that in preparation for the fiscal cliff. Some of that is still a cash-on-hand savings, but I haven’t changed that percentage. I don’t foresee a banking implosion with the financial cliff, so I’m not too worried about keeping most of our savings in the bank.
We’re trying to get a few more of the bills totally paid off. We’re really close on some of them, and while it is a bit of a juggle to save and pay down debt, I think we’re managing it. We’re on track to have a couple of them paid off by the end of February.
I’m not anticipating a loss in income. We’re already operating on only one income, and my industry is not likely to be hit hard by any aspect of the fiscal cliff. I try not to be overly cocky about it, but we’ve got more work than we can do and we’re hiring at a fast clip. Not the right environment for pink slips. This of course is a blessing. There are many folks who do work in one of the industries that are on the line for big cuts should sequestration or across-the-board cuts get implemented. If you’re one of those folks, I suggest you tighten your belt immediately, if not before.
If you haven’t implemented mitigation strategies like a food garden, second job and debt elimination, those would all be good places to start before you find yourself hungry and destitute with a large bill from Uncle Sam.
Anyone else prepping for the financial Armageddon? Did I miss any aspects?