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You’ve definitely noticed a change in your paycheck since the beginning of the year. A bad change. A very bad change.

The tax relief that we’ve enjoyed for the past couple of years came to an abrupt and painful stop on January 1 when the Social Security tax went up from 4.2 percent to 6.2 percent. The increased taxes are already taking a toll on consumer confidence, which, according to BusinessMirror, dipped to a point we haven’t seen since November 2011. With less money to spend, it looks like there’s going to be less shopping in all of our futures.

Ad Age estimates that, for an income of $50,000, the increase amounts to $1, 000 per year. (The tax increase applies to wages up to $113,700.) Analysts say that totals something in the range of $115 billion-ish. That’s money that people won’t be using to buy stuff at the mall, with consumer spending projections going down.

There is some debate about where Americans will be spending their money now. Will they flock to discount retailers like Target? Will certain retail areas, like home decor, be hit the hardest? Will fast food restaurants like Wendy’s benefit? If there’s less money in people’s pockets, it’s likely that a variety of companies and industries will be hurt.

Research from economists at the Federal Reserve Bank of New York released just yesterday shows that Americans spent the extra cash they had been getting in 2011 and 2012 rather than saving it or paying what they owe. Nearly a fifth of people (19 percent) who said they would use the money to pay off debt actually spent it on other things. And 70 percent of people who said they intended to spend it like there’s no tomorrow kept their promise. “All told, about 36% of the extra income was spent by respondents — a relatively large figure,” The Wall Street Journal reports.

The report also found that it’s the folks who make more money, not the low-income earners, who are more likely to go on a spending spree. Low-income earners were actually more likely to use the money to pay debt.

We’ve talked a lot about budgeting cash on this site, and hopefully most of you out there are able to readjust without too much trouble. What are some of the things you’re doing to account for the lower take-home pay? Let us know in the comments.

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