Don't Waste Your Money: Rework budget for 2013 tax increase - News, Weather, Sports, Toledo, OH

Don't Waste Your Money: Rework budget for 2013 tax increase

(Toledo News Now) -

Now that it's 2013, there is a 2 percent increase in social security withholding that's going to be impacting families and their spending.

By now, everyone who works has received their first January paycheck. For many, it was a bit of sticker shock, being much smaller than they have seen in a while.

Economy Impact Concerns

Marcia Muse was buying a little less at the lunch wagon truck. Like millions of American workers this month, she's just taken a pay cut.

"Smaller than I was expecting," said Muse.

The end of the social security payroll tax break is already impacting workers.

"Doesn't make you happy. You try to budget everything out, and then all of a sudden, you've got less money," explained Muse.

These employees are now opening paychecks $20 to $40 smaller than last year's.

Employee Lisa McClain says her cut works out to an entire day of day care.

"It's more difficult for me to pay my child care for that. $35 equates to a days' worth of child care for my daughter where I take her. So it's a substantial change," McClain explained.

Everyone's Affected

-If you earn $30,000 a year, you'll take home $600 less this year.

-50,000 salaries will earn $1,000 less.

That's $80 a month.

And that could hit restaurants, movie theaters, and even lunch wagons, as workers try to figure out where to trim.

"I just don't know where yet. It'll probably be the grocery story because you have to pay your bills," said Muse.

Silver Lining

If it helps, you can think about the positive side of this boost in withholding.

Unlike a tax hike that goes who knows where, this benefits the social security trust fund, which will mean more money in it for you in the future.

That way you don't waste your money.

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