First Person: We’re Part of the 75% of Consumers Cutting Back

Yahoo Contributor Network

I just finished reading a CNN Money article entitled "Crunched consumers are cutting back". According to the article, "Nearly three-quarters of respondents said they were cutting back to cope with tax changes this year -- including dining out less, limiting travel plans and skipping everyday indulgences, according to the National Retail Federation, which sponsored the survey."

In the process of reading this article, I realized that we are part of this nearly 75 percent, and even though we live pretty frugally and don't have much to cut back in the first place, this doesn't mean that we aren't taking steps to try to cut further.

Adjusting Payroll Exemptions

As a self-employed individual, I'm in charge of my own taxes and can make decisions as to how I set money aside for this expense. My wife on the other hand works for an employer who deducts her payroll taxes for her. With the birth of our second child, we've realized that we're withholding too much in taxes. We're therefore adjusting her exemptions so that we are more in line with what we should be having withheld. This will free up more cashflow in the near term and reduce that lump sum that comes by way of a larger tax refund at the end of the year.

This year, we're moving my wife's exemption status from one to two, and after I gauge our tax status and refund amount next year, we may increase it even further, pushing it up to three so that we're not paying taxes come year's end, but also so that we're also not giving the federal government a sizeable interest-free loan in the process.

Tax Refund

So, since we're getting a nice tax refund this year, but since times have also been tough and money a little tight lately, we're planning to save it rather than spend it. With the family vehicle now over ten years old and requiring more and more repairs lately, and things like health care costs, payroll taxes, and property taxes higher, our margin between income and expenses is narrowing significantly. Therefore, we're putting the majority of this money aside as a supplement to our regular emergency fund in case we have further vehicle repairs, need to purchase a new vehicle altogether, or must face a similar unexpected expense down the road.

Thank Heaven for Chicago Winters

Thankfully, living in the Chicagoland area makes it easier to cut back on entertainment during the winter. We're outdoor people, and with the onset of the colder season comes a great excuse to put a leash on more of our outdoor activities that can result in higher entertainment costs. From heading to the zoo or just spending gas money to drive to certain parks we like, every little bit that we can stash in our pocket -- at least until the warmer months arrive -- is a little bit more money saved.

Stretching a Dollar Close to Home

And even when the warmer season arrives, it doesn't mean we're going wild with our spending. We tend to look for ways to stretch a dollar close to home. From doing things like going to the area zoo -- at which we can buy a year-long family pass for four for just over a $100 -- to heading to the library and taking local community exploration trips around the Chicagoland area rather than costlier weekend road trips to other states allows us to still have fun but cut back on our costs at the same time.

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The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.


Hicken, Melanie. CNN Money. "Crunched consumers are cutting back". February 21, 2013. February 22, 2013.


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