AICPA: Americans Have Money Moves to Make in Wake of Fiscal Cliff

NEW YORK--(BUSINESS WIRE)--Washington has dealt with the fiscal cliff. Now it’s your turn.

“CPAs have seen it all – mistakes, missteps, misfortune and recovery – and have the knowledge to help Americans build and repair their financial foundations”

About three quarters of American households will have smaller paychecks this year because the federal government will take a bigger tax bite. Congress, as part of the fiscal cliff legislation, chose not to extend a 2 percent payroll tax holiday that has been in effect for two years. That means someone who earns $50,000 will take home about $1,000 less. Other workers might want to consider changes to their retirement planning because of the fiscal cliff legislation. It removes some restrictions and makes it possible for more people to convert a traditional 401(k) to a Roth 401(k).

“We’ve moved from a fiscal cliff to a financial reset,” said Sharon Lechter, CPA, author and editor of a new book – Save Wisely, Spend Happily -- published today by the American Institute of CPAs. “We all need to assess our financial situations and determine what changes we need to make in saving and spending to adjust to the new realities created by this legislation.”

For most Americans, such financial focus hasn’t been a priority. According to a recent poll conducted by Harris Interactive for the AICPA, only 36 percent of U.S. adults planned to set a personal financial goal for the New Year. And about half of them likely will fall short. In the past five years, 43 percent of those who made a personal finance-related New Year’s resolution failed to achieve it or failed to sustain their success. What’s more, 61 percent of U.S. adults either have no budget or only have an informal one they track in their heads.

The AICPA published Save Wisely, Spend Happily to help Americans get on better financial footing and do the analysis necessary in the wake of the fiscal cliff. In the book, Lechter, an international best-selling author and financial literacy expert, weaves together seasoned, straightforward advice about saving, spending, budgeting and financial planning from 125 CPAs across the country.

“CPAs have seen it all – mistakes, missteps, misfortune and recovery – and have the knowledge to help Americans build and repair their financial foundations,” Lechter said. “In Save Wisely, Spend Happily we have combined more than 1,000 years of their expertise into a money manual with a simple message: You don’t have to be a miser to thrive. You just have to make mindful choices about your money.”

“This book has tips that can benefit anyone,” Lechter continued. “There’s no upsell or agenda. Just seasoned insight from trusted advisors.”

Lechter offers these tips to help Americans get started:

Review your expenses. With a cut in take home pay, you need to ensure you’re making every dollar count –- and that it counts toward goals you want to achieve.

Have the money talk. Talk with your spouse or partner to ensure you’re aligned in your views about money, which can be the root of significant challenges in relationships. You need to make sure that you’re heading toward similar goals or at least understand the goals you each prioritize.

Ask for help. If you don’t know how to move forward, ask. According to the Harris survey, only 13 percent of Americans seek advice from a financial professional. Managing money can have many complexities and sometimes a professional can best put you on the right path.

To learn more about Save Wisely, Spend Happily, visit www.savewiselyspendhappily.org. The book is available in paperback and Kindle format through Amazon.com. All proceeds go to support financial education.

Survey Methodology

Harris Interactive conducted the telephone survey on behalf of the American Institute of CPAs within the United States between December 6 and 9, 2012, reaching a nationally representative sample of 1,010 adults aged 18 and older by landline and mobile phone.

For the full results of the Harris survey, including methodology, contact Jonathan B. Cox with AICPA Media relations at 919.402.4499 or jcox@aicpa.org.

About the AICPA

The American Institute of Certified Public Accountants (AICPA) is the world’s largest member association representing the accounting profession, with nearly 386,000 members in 128 countries and a 125-year heritage of serving the public interest. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting.

The AICPA sets ethical standards for the profession and U.S. auditing standards for audits of private companies, nonprofit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination and offers specialty credentials for CPAs who concentrate on personal financial planning; fraud and forensics; business valuation; and information technology. Through a joint venture with the Chartered Institute of Management Accountants (CIMA), it has established the Chartered Global Management Accountant (CGMA) designation to elevate management accounting globally.

The AICPA maintains offices in New York, Washington, DC, Durham, NC, and Ewing, NJ.

Media representatives are invited to visit the AICPA Press Center at aicpa.org/press.