The fiscal cliff is a bundle of legislative measures that could see tax increases and expense cuts aimed at slashing the federal deficit drastically but the implications of these moves, on the economy in general and the individual tax payer specifically, are being hotly debated in the media.

Taxes will increase and savings will reduce

It is expected that the measures will lead to an increase in taxes across the board for all classes-low income, middle income and upper income groups.  The middle class may see taxes boosted by an additional $2,000 every year. While taxes will take away more money at one end of the spectrum, at the savings end lesser amount will be available for with-holdings for social security. This automatically implies that the average citizen will have lower liquidity and lessened ability to boost retirement savings.

We may witness a recessionary scenario once again

Many financial experts opine that we could see the economy witness more unemployment, with income levels drooping and property values crashing steeply. If property prices bottom out this will directly affect homeowners paying mortgages and a home loan crisis may result comparable in scale to with the subprime crisis that crashed property rates recently. The rate of default on home payments may rise significantly. Homeowners may not have an escape route as property prices fall below the loan outstanding, thereby elevating the risk categorization of their loans.

Other significant areas where the ripples will be felt

  • The stock market

One is the stock market that will take a toss destabilizing the savings that link our retirement funds to stocks and bond investments. These savings will naturally grow at a slower pace than before, and inflation is likely to further erode the purchasing power of our savings over a longer term.

  • Bank deposits and CDs

Fixed deposits like CDs and savings account interest rates will plummet and result in slower growth of bank deposits.

  • Capital gains tax

The fiscal cliff will also raise the capital gains tax, which means you gain lesser amounts from stock appreciation than ever before. It is entirely possible that canny investors may try and liquidate certain high ranking holdings to gain the maximum from capital appreciation before the new changes take effect.

  • Estate and inheritance taxes

If you were thinking that only your income is going to attract higher taxes in 2013-14 you would be wrong, even your estate will not be spared and you may suffer a bigger burden by way of increased estate taxes. This implies that there will be substantially lower payouts to your legal heirs in the years to come. The wealthy will have to go into a huddle with their tax planners to restructure their estate holdings to stay abreast of the new changes.

Preparing for the worst economic scenarios with calm and title loans

Though economic conditions may get tougher, nothing prevents you from tightening your belt and cutting costs thereby diverting a greater share of your income to savings and investments. Creating an emergency fund now assumes vital importance; accumulating at least six months expenses will go a long way in stabilizing your finances.

The loan for vehicle title can be of immense help, especially for citizens that are in the lower and middle income groups that will be hardest hit by the expected tax amendments and spending cuts. The cash loan for title can be applied even if here is a poor credit or no credit background that gets you no for an answer when you approach banks for financial help. The car equity loan taps almost 60% of the equity in your car and this money is yours simply by securing the collateral of your car title. The pawn car loan interest rate may seem higher at 25% APR but this is offset by a flexible repayment program that lightens your debt servicing ability.