“Studies show how to be a better consumer”
Gregory Karp’s article in the June 30th Chicago Tribune discusses some of the many studies about consumer behavior.
“There’s a whole area of academic study about consumer behavior that examines not what we buy, but why.” Most of us can learn how to make better decision from some of these studies. He discusses how some of our actions impact our choices.
“…participating in online social networks can raise your self-esteem. “ Heightened feelings of self-worth “…can lead to impulsive and indulgent behavior, poor traits.” “…greater social network use was associated with a higher body mass index, increased binge eating, lower credit scores and higher levels of credit card debt…” “The self-esteem and self-control effects did not seem to affect those with weak ties to their network.
“…for people trying to spend less and save more” they should consolidated their accounts rather than have multiple accounts for different purposes. Some examples of multiple accounts include: vacation, new car, special celebrations and vacation homes. “Individuals will save more and spend less when they have a single account. “ “Multiple accounts create vagueness about how much money you really have, making it easier to justify expenditures you shouldn’t make.…” Mr Karp suggests that if you must use multiple accounts, use financial software. This will provide a consolidated view of all your accounts.
“Physical acts of completion can provide consumers with a sense of closure that makes them happier with their purchases…” “That’s as opposed to revisiting the decision and continually reassessing the options.” “Consumers are less likely to be satisfied with a purchase when they compare it to other options.” “Physical acts of closure enable consumers to perceive a difficult decision as complete and limit their tendency to compare their selection with the options they have rejected.”
Social Security has improved the information available online
“my Social Security” provides improved information applicable to you. Information and tasks available includes: your benefit verification letter, your benefit and payment information, your earnings record, ability to change your address and phone number. Start or change your direct deposit of your benefits,
This allows you to obtain information when you need it. It will save your time and eliminate the need to travel to a social security office to obtain this information. It avoids the delay of getting information that is helpful in your financial planning.
The website address is: http://www.socialsecurity.gov/myaccount/
Some people cannot receive or acknowledge LinkedIn endorsements
I am such a person. I greatly appreciate all the endorsements I have received. The current state of financial regulations prohibits testimonials. LinkedIn’s “Skills & Expertise” are endorsements that are considered testimonials. The spirit of these regulations is to prohibit comments about the conduct or performance of an adviser. The best information currently available is that making endorsements would also be prohibited.
I am permitted to have your endorsement in LinkedIn as long as it is hidden. When and if the regulations are changed I can quickly unhide them.
Increasingly people are using the new features available through social media. Those of us that are subject to the restriction are frustrated. A recent article in “Reuters” discusses this matter in more detail at http://www.reuters.com/article/2013/01/23/us-social-media-idUSBRE90M1G020130123
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2013 FICA Tax Increase Surprises Some Taxpayers
With all the end-of-year hype surrounding the fiscal cliff and the relief that came with New Year’s legislation permanently extending most income tax rates, one change seems to have been veiled by the settling dust: the 2 percent increase in FICA (Federal Insurance Contributions Act) tax. That increase, the result of an expiring provision that was not extended, means that the vast majority of American workers are now receiving about 2 percent less in their take-home pay, an unwelcome surprise to some people.
Background
In the midst of the last recession a little more than two years ago, Congress passed and the president signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. This new law included a 2 percent reduction in the Social Security (OASDI) portion of the FICA tax. The provision was designed to help put a little more money into the wallets of American workers during the challenging economic environment of 2011. While the employer portion of the OASDI contribution remained at 6.2 percent, the employee contribution was reduced from 6.2 percent to 4.2 percent. The provision was extended through 2012 by the Temporary Payroll Tax Cut Continuation Act of 2011 and the Middle Class Tax Relief and Job Creation Act of 2012.
The reduction was never meant to be permanent, as it put additional financial pressure on the already stressed Social Security Trust Fund. So during the 2012 fiscal cliff negotiations, both Democrats and Republicans agreed that it should expire at the end of the year.
Impact of 2 percent
Despite media reports warning of the impending payroll tax increase, many Americans were caught off guard when they received their first paychecks in 2013. How much of an impact might the additional withholding have? A family earning $60,000 a year will see their pay cut by about $1,200, or $100 per month, during 2013. Those earning $100,000 will receive about $2,000, or about $167 per month, less. (The maximum amount of an individual’s earnings that is subject to Social Security tax in 2013 is $113,700.)
While most experts believe the decrease in take-home pay won’t be enough to cause major economic damage, it may encourage families to cut back on spending enough to slightly dampen the nation’s overall growth. For example, the 2 percent decrease could represent a family’s monthly utility bill, an investment in a college savings account, or a week’s worth of groceries.
Medicare taxes for high earners
Also consider that high earners will need to pay a bit more in Medicare taxes beginning in 2013. Taxpayers will pay an additional 0.9 percent Medicare tax on wages exceeding $200,000 for single/head of household, $250,000 for married couples filing jointly, and $125,000 for married couples filing separately. Taxpayers whose modified adjusted gross income exceeds those same threshold amounts will also pay a 3.8 percent Medicare tax on some or all of their unearned income. These provisions were part of the Patient Protection and Affordable Care Act of 2010, and like the expiration of the FICA reduction, were not affected by the 2012 fiscal cliff legislation. When combined with the 2 percent Social Security increase, the total hit could mean a difference of several thousand dollars a year to some higher-earning taxpayers.
Questions?
If you have questions about your FICA withholding, your human resources department or personnel manager might be a good place to start. These representatives are typically prepared to answer such questions and can help you confirm that your withholding is correct.
Safeguard your email accounts.
The number of people that tell that their email accounts were hacked has increased in the last few months. PC Magazine recently issued an article that discussed 5 non technical steps to help protect your email account.
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