smart spending

5 fixes for your own fiscal year

Adjust tax withholding
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Adjust tax withholding

Is your household income higher or lower than you thought it would be by Oct. 1? It might be time to adjust how much income is withheld for taxes.

If you or your spouse pulls in additional money, "you might want to adjust your withholdings so that more taxes are taken out," Foster says. That way, you won't "have sticker shock when you go to your tax preparer."

With the opposite problem -- unemployment or underemployment -- you might prefer to have less money withheld from your paycheck so more cash is available each month, rather than as a lump-sum return next spring, Foster says.

"We see people who are struggling to make it through every month, to survive, and they get a whopping refund at the end of the year -- $3,000 to $4,000," he says. For those families, having that same money spread throughout the year could make more sense financially, he says.

At the same time, some consumers like a tax refund to force themselves to save some money, Foster says.


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