The White House and Congress past some key legislature last year. The piece was passed during the lame duck session of Congress included a provision to provide a payroll tax cut for 2% on the amount that normally is allocated to the Social Security program. Previously, both employees and employers contributed 6.2%. This year that level is going down to 4.2% for workers, while the employer contribution remains the same. So what are you going to do with it? You could go out to your local electronics store and buy a brand new Ipad and put it on your credit card. Why not you can make payments? Well I have three other options:
Pay down debt: Take that extra money and apply it to highest interest card card.
Save It: You can place the extra money and place it in a saving account. An even better idea if you have direct deposit, automatically have it withdrawn. You will never know you had it.
401k: Keeping withe saving theme. Why not take that extra money and place it in your company's 401k plan. No 401k plan? How about adding or opening a Roth IRA and put it in there
You can use this temporary pay increase and have fun with it or help you achieve your goals of financial independence.
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