Neutralize your tax hit with these ideas

Neutralize your tax hit with these ideas

PORTLAND, Ore. – The fiscal cliff deal Congress passed Tuesday did not include extending the two-percent payroll tax cut.

How does that translate to your paycheck? If you earn $50,000 a year, you'll lose a thousand dollars more to Uncle Sam.

But there are ways you can save that amount of money in a year's time.

Visa did a study and found people spend more than a thousand dollars a year on "mystery" items – they don't know where their money is going.

So just tracking your spending can be a good way to start knowing how to save it. Meanwhile, there are a few changes you can make that add up to that $1,000 difference in your paycheck.

Saving money can be as simple as washing your clothes – that is if you use only cold water. All that churning and turning in the machine doesn't use much power but heating up the water does.

Portland's Bureau of Planning and Sustainability agrees with a PGE blog post, saying you can save up to $180 a year by avoiding the heat.

Speaking of clothes: Do you shop online? Whether it's shopping or gift giving, look for websites that ship for free. Use Nordstrom or Piperlime and you won't pay extra for returns either. At once or twice a month, you could save about $120 a year.

You can also save $240 a year by losing your landline phone. If you've already hung up the at-home phone, consider your cellphone plan. Chances are you're paying for more minutes than you need.

As for your cable, Portland State University senior instructor and personal finance expert Brenda Eichelberger says it's as simple as calling the company.

"You have to call and ask, they're not going to say, 'Hey, you're spending too much money, do you want to spend less?" she said. "By combining some things, we saved about 100 dollars a month."

If nothing else, get rid of those premium movie channels. Three of them cost you about $40 a month or $480 a year.

That's all it takes to save more than a thousand dollars this new year. But there's more. Eichelberger says mortgage rates are lower than they've been in decades so take advantage of them.

"The mortgage rate, I just looked it up, was 3.41 percent average in Oregon right now," she said. "So if you have a rate you're paying that's higher than that, you might want to look at refinancing."

One of her students recently saved $400 a month or $4,800 a year.

Another idea to save money is to buy a gift card for yourself – like a $20 Starbucks card to use for the month instead of spending mindlessly.

With the fiscal cliff bill and the start of the new year, experts agree now is a good time to take a look at your finances anyway.