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Financial Planner on Possible Tax Increases: Be Sensible, Don't Panic

December 24, 2012

Political leaders on both sides of the aisle have not reached a compromise that would avoid the "fiscal cliff". If a deal is not reached by the end of the year, tax payers can expect a tax raise on their pay checks.

Some local people say they may have to tighten their budget or dip in their savings to get by.

"I don't have a whole lot of plans steadfastly in place, but I do have enough general savings and enough know how on various odd jobs that I know I'll manage to get by if I need to," said local resident, Robert Packard.

Financial planner Jason Hull says tax payers may want to consider some spending cuts of their own, but not to stress.

"First and foremost is don't panic. Don't immediately cash out your 401k and your IRA, because you think your going to need all this money," said Hull.

Hull suggest cutting back on certain luxuries such as gym memberships and cable channels.

"You could always buy food at the store and cook it cheaper than going out to eat," said Hull.

Many people hope that political leaders can reach a resolution, and if the can, Hull says there's no problem with saving.

"If it doesn't happen and you've manage to find that extra five percent in your budget save it. Don't get on the hedonic treadmill, don't immediately go, I've got five percent more and buy a 183 inch flat screen TV," said Hull.

He also recommends paying off any extra debts, such as credit cards .

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