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Make up Social Security tax shortfall

| Sunday, Jan. 20, 2013, 9:00 p.m.

Look at your paycheck lately? Get ready for a fiscal shock when $20 or more is zapped out each week to cover a bump in Social Security taxes.

A payroll tax break that was designed as a temporary decrease during the financial slump goes away this year, as part of the fiscal cliff deal.

Cut 2 percent off a salary of $60,000 and you're saying goodbye to $1,200 a year — or $100 a month.

Where do you make up the shortfall? Look at some big budget items:

Get green by watching utility bills: No, you won't save $300 a year just by turning off the lights when you leave a room.

But if you're running a second older refrigerator in the basement, it could be costing $10 or more a month or $120 a year, said Bob Fegan, principal energy analyst for Michigan-based utility DTE Energy.

One way to save 10 percent on a heating bill is to dial down one or two degrees all day long — and then dial down five more degrees at night or when at work, Fegan said.

As a practical measure, don't dial down more than about 10 degrees unless doing it for a longer period of time, such as the entire weekend.

Fegan cautioned that if you have an older house with poor insulation, don't dial down too far and risk freezing water pipes near outside walls.

Dialing down could add up to $80 or more in savings during the winter., but you have to do it all the time.

“You can't just (dial down) once in a while and think you're going to save any money,” Fegan said.

Another option: Some experts say consumers can cut an electric bill by $60 a year if they replace standard bulbs in their five most-frequently used light fixtures with Energy Star compact fluorescent light bulbs.

Fegan said new CFL bulbs are less expensive and offer better lighting than early products. Savings so far: $260 a year.

A bigger-picture thought: If you have a furnace that's 25 years old or older, Fegan said, it may be time to replace it to save on energy costs and the cost of repairs down the road. Or time to air-seal an attic and add insulation.

TREAT $100 LIKE $100: It's a lot more fun to say you saved $100 off the price of a jacket than brag about saving $100 on car insurance.

But pricing your insurance can create a real savings — not additional spending, like the jacket.

John Egan, managing editor for, a company, said bumping up a deductible on your car insurance from $200 to $500 can cut a car insurance premium by 15 percent to 30 percent. Raising a deductible from $200 to $1,000 could cut the premium by as much as 40 percent.

Consumers can get discounts for bundling insurance and cut 15 percent to 30 percent off premiums if they obtain auto and homeowners insurance with the same company.

The national average auto insurance premium is $900. Save up to 30 percent and you're saving $270 a year — or $22.50 a month.

CUT OUT CREDIT CARD AND CHECKING ACCOUNT FEES: See whether you're paying an extra $15 a month for an interest-bearing checking account, said Greg McBride, senior financial analyst for

The interest rate being paid might be as little as 0.05 percent of the money in your checking account. So why pay roughly $180 a year if you fall below the minimum balance?

“All around, it's a bad deal,” McBride said.

Find free checking either via direct deposit or a community bank or credit union with no strings attached.

Other fees: Are you paying $10 a month for credit card protection plans or credit monitoring services? Here's another way to save $120 a year — if you ditch those plans.

Do you pay $4 to $5 a pop to use an ATM not connected to your bank? Save $60 a year — if you pay that fee once a month.

Eliminate a couple of overdraft charges and you're saving an extra $70 or more. McBride said consumers would want to link checking and savings accounts to avoid overdrafts. The money would be transferred from savings to checking if there's an overdraft and the fee would be about $10 or so compared with $35 for overdrafts, he said.

WATCH OUT FOR SEASONAL DEALS — AND REAL DEALS: If you want to save hundreds of dollars on clothing, wait two months after new clothes arrive at the store so you can buy them at serious markdowns, said Lindsay Sakraida, features director for, which aggregates bargain prices.

The end of January is a good time to buy winter coats at up to 70 percent off, she said. Late January and February are good times to replace electronics, such as TVs, if you buy last year's models. February and March tend to offer better deals on linens and bedding, according to

Make sure to check prices elsewhere to know whether you've spotted a real bargain.

Susan Tompor is the personal finance columnist for the Detroit Free Press. She can be reached at

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