Ruth to the Rescue: Making most of your money in 2013

Ruth offers simple steps for making money go farther in 2013

DETROIT - Congress pulled the country back from the so-called fiscal cliff, but payroll taxes are going up for everyone.

After a two-year break, the Social Security tax is going back to 6.2 percent from 4.2 percent.

That's not the only hit your family's budget could take in 2012. According to the USDA, meat, dairy and poultry prices are expected to go up 4 percent. Cereals and baked goods could go up almost three percent. The cost of college, health care, and cars are also among the items that will go up in the New Year.

That means now is the perfect time to consider some easy ways to get your financial house in order. Many Americans are already at a disadvantage. A recent Harris Poll found nearly 70 percent of Americans do not have a budget plan.

"It's looking at two things, one is cash flow. What do you have coming and what do you have going out? But also, what assets you have and what liabilities you have and what you are worth today?" said financial advisor Nicole Middendorf.

How Does Your Spending Stack Up?

Ruth to the Rescue also checked with Sharon Lechter about family budgeting. She is a CPA and the author of the book Save Wisely, Spend Happily.She suggests you look at your spending in all the key categories and see how it stacks up against the recommended allowances.

Here's a look at the suggested percentage of income you should be spending in your budget.

Housing- 25-35%
Utilities- 8-10%
Clothing- 2-5%
Food- 10-15%
Entertainment/Recreation- 5-10%
Transportation 10-15%
Personal Debt/Payments/Misc- 10-15%

If your spending is out-of-whack with these numbers look for alternatives.

"Instead of going out to eat all the time- we started having our friends over. we would take turns cooking and we're having so much more fun!" said CPA Sharon Lechter.

If you're among the 70 percent of people who aren't looking at a budget, this first step could really help you realize where you might be spending too much.

Maximize Money

Another important step is to make sure you're maxing out your retirement or 401k accounts, especially if there's a company match.

"It's free money. you want to take advantage of it. It's hard to think about retirement sometimes, depending on your age, but the earlier the start the easier it is," said financial advisor Nicole Middendorf.

Also, run your credit report. If there is any sort of debt or mistakes on the record, make a plan to clean it up.

And, if you usually get a tax refund, you might be able to tweak your withholding to have more cash in your bank account all year long.

"You're giving that your money to Uncle Sam on the other hand and not getting any interest for it. And so, getting a refund is a negative thing. You want to make sure you're giving that money to yourself, said Middendorf.

CPS Sharon Lechter says just getting started on any small step is the best move forward. "Taking one step to change your financial life and that's going to give you the self-confidence to take the next step," she added.

Her book Save Wisely, Spend Happily was written with 125 CPS, who all shared ideas about how clients are finding ways to save money.

Some highlights:

*Five friends take turns cooking lunch and bringing it to work. They save cash, and enjoy time with their friends.

*Another company held a contest to see who could come up with the best ways to save money at home.

*Turn a hobby into income

The book is a non-profit initiative, and you can find out how to get a copy at Look under the Publications tab!

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