So what should you be doing to prepare your finances for 2013, with the possible the "fiscal cliff?" We spoke with a wealth manager who said now is not the time to start making knee-jerk reactions.
Jim Newman is Senior Vice President of financial firm Janney Montgomery Scott. He said, "I think as we get past this fiscal cliff, we're going to look back and think it was just a small little gyration. And even though we might see some volatility, it shouldn't be anything on your long-term."
He said you should use caution when you hear the talk from politicians. "Their trying to show both sides how drastic it's going to be from both sides and it's a political ploy more than anything else," Newman explained.
He added, "So my advice to everybody out there would be whatever your long-term goal is, continue to put money in your 410(k), if you want to be an aggressive investor, continue to be aggressive."
Newman doesn't believe the average person is going to face financial disaster. But, you may have to adjust some of your spending habits. "Just remember if there is a payroll increase, it's going to be over a 12 month period, not over your first paycheck, you might feel it a little bit, but like all of us, we'll find a way to get through that," Newman said.
Newman said if we do end up paying higher taxes in the short-term, the government could eventually refund us that money if leaders make new laws retroactive.