Do you have “frugal fatigue?” You’re not alone. Pinching pennies becomes exhausting, year after year. You dream of breaking free and buying everything in sight.

But tiresome as budgets are, consumers haven’t quit them yet. You threw some money around in December, when credit card use bumped up for the first time since the 2008 financial collapse. Then remorse set in. Consumers slashed their credit-card spending in January by 6.4 percent at an annualized rate, the Federal Reserve reported this week.

That fits with what the National Foundation for Credit Counseling is seeing on the ground. In a recent NFCC survey, two-thirds of consumers said that they’re sick of having to question every dollar they spend, but have no choice. Incomes are virtually flat, employers aren’t calling the long-term jobless back to work, and the cost of critical purchases such as health insurance and gasoline are leaping up. Only 5 percent of the people questioned said that they couldn’t stand to keep living under fiscal restraint , and intended to spend more. About 8 percent said they didn’t need to be particularly frugal. They hadn’t cut spending and were doing fine.

The rest – about 20 percent of the consumers – overcame their frugality stress in the old fashioned way: they changed their lifestyles so they could live comfortably within the incomes they had. They found this new life so positive that they said they’d never go back, reports Gail Cunningham, a spokesperson for NFCC.

If you’re sure that your financial troubles are temporary, it pays to pinch the pennies until the dollars start rolling back in. But the story is different if you see little hope of raising your income by enough to make your current expenses each to cover. Emotionally, making big changes is hard to do. But the faster you reinvent your life, the more money you’ll have in your pocket and the sooner you’ll be able to save again…. continue reading

Having trouble paying taxes? To collect, the Internal Revenue Service uses a pernicious tactic that destroys your credit. It files a lien against your property. Supposedly, that guarantees payment. More likely, it will sink your personal finances, making it twice as hard for you to get back on your feet.

Under new rules announced by the IRS last week, fewer hard-up taxpayers will face this harsh – and unfair – punishment. You’ll have a better chance of getting your financial life back in order, not to mention getting the government off your back.

The changes comes in response to years of needling by Nina Olson, the National Taxpayer Advocate. She has argued, forcefully, that the IRS inflicts needless harm on people who are struggling to find or keep their jobs and pay their debts. The rules are a step – but only a step — toward helping willing taxpayers square their accounts…. continue reading

Has Congress found a way to exert its political will on the supposedly independent Federal Reserve Board? And, in the process, murder the infant Consumer Financial Protection Bureau?

If so, say goodbye to future, broad actions to save consumers from credit card and other financial abuse, including the enforcement of current laws. Government action against deception could turn out to be even weaker than it was before the financial collapse. The Fed might be weakened, too.

The latest budget proposed by the House Republicans whacks the new consumer bureau, by taking away nearly half of the money needed this year to get the office up and running. Instead of the $143 million the regulators were expecting, the House wants to limit the CFPB to no more than $80 million. (To give context to that number, JP Morgan Chase gave its CEO, Jamie Dimon, a $17 million stock bonus this year. That’s almost one-fifth of the amount of money the GOP would spend to protect Americans from mistreatment by banks in general.)… continue reading

While you’re mining this year’s tax instructions for savings on deductions and credits, don’t forget the special rules that come with your marital status. The so-called “marriage penalty” affects only couples with roughly equal incomes that year. The majority gets an Ozzie-and-Harriet ”marriage bonus.” Here’s a quick guide to the tax quirks couples should look for:… continue reading

Email your legislator, if you’re counting on federal Pell Grants to help you start, or continue, your higher education. The GOP proposes to slash your award by about 15 percent for academic year starting this September. That would be the largest cut in aid in the history of the program. President Obama opposes the change but his new budget, presented today, shows that he has other cuts in mind. Students face an uncertain period while the contending forces fight it out…. continue reading