Where Did My Paycheck Go?
By Larry Lane for www.Investorzoo.com
Your paycheck is under attack. Thanks to our gracious state/local and federal government who seems bent on taxing us on everything but the air we breathe, we now have less after tax money to invest for our future and to fund our retirement. The public pays a huge tax burden and some argue taxes will be going even higher soon. The American tax payer will be funding our government stimulus package, financial bailouts and total mismanagement of our financial system. We will be paying for those who financially gambled, used their houses as ATMs and those on Wall Street who leveraged themselves into oblivion (literally). In addition to taxes, you have every day living expenses such as utilities, mortgage/rent, car payments, insurance etc. Why don’t you have any money left at the end of the month?
Taxes
Payroll taxes-If you are one of the fortunate people who are still employed, have you taken a look at your actual net pay? Depending on what state you reside in will have a dramatic effect on your actual take home pay check. According to www.paycheckcity.com, a worker who made $73,500 In New York will take home $52,000. That same worker in Washington State must make just $67,288 to take home the same $52,000. The privilege to live in the Empire state will set you back 9.1% of your earnings just in payroll taxes.
Property taxes For those of you who are homeowners, your state will expect their share of your paycheck pie in the form of property and sales taxes. This can range from .14% of your house’s assessed value in Louisiana to 1.76% in Texas. . Of course, there are state sales taxes to pay, which can range from 0-8%. Let’s not forget about the gasoline tax which ranges from 12.4 cents in Georgia to 37.5 cents in Washington State. Remember that tax is on every gallon of gas you pump.
While I’m not suggesting you pack up and move, (you probably couldn’t sell your house anyway), state sales tax, property tax, and other fees which vary greatly could be deciding factors when considering a new job or relocation.
Monthly wireless/phone service One of the most important steps you can take is to start analyzing your monthly recurring expenses. When was the last time you checked out the latest offerings from wireless carriers? If you have an older plan, you may be spending $25 or more per month. If you are a heavy phone user, there are new unlimited plans which may save you thousands of dollars per year. Do you have a home phone? If you have a wireless phone, I would argue that it is not needed. Cancel your home phone and you’ll save $250-450 per year.
Cable TV Cut your premium channels and downsize your TV viewing. Shop around for deals not only by your local cable provider, but from others such as Dish Network and Direct TV. Save $20 per month per month on your TV viewing habits and you’ve just put another $240 away for your retirement future. It usually pays to call service providers such as cable companies since they offer unadvertised specials by phone. If you’re watching TV and the reception goes fuzzy, you want to make sure someone is going to pick up the phone at 9:00 Pm on a Saturday.
Internet service Have you checked around for pricing for internet service? Typically, there are several competing companies in your area vying for your business. Like cable TV companies, it usually helps to call these types of service companies as they usually have deals and specials which are not advertised. When signing up for new service with a new company, always inquire about their disconnection policy. Is there a service contract? If so, how many days can you try the service out before being locked in? Is there an activation fee? Lastly, make sure customer service is available 24/7. Save just $10 per month and you now have an additional $120 per year to invest in your 401k.
Electricity
1. Turn Off Your Water Heater-while it may sound odd, turn off the breaker to your hot water heater. Try it for a month. I think you’ll be surprised how much you’ll save per month. After 3 months, I’m averaging about a 10% savings. Remember to turn it on before you go to sleep as it takes 30 minutes to an hour to heat up water for a shower.
2. Use Power Strips-Everything you plug into an outlet uses phantom power. Leave your computer on when it’s not in use? Have you new flat screen TV plugged into the wall when you’re at work or not using it? You are still being billed for power usage. Phantom power usage occurs when you any item plugged into the wall. Plug as many items into a single power strip. Before you go to sleep, make sure the strip is unplugged.
3. Insulation-Make a trip to Home Depot or Lowes and purchase some weather stripping for old drafty windows. You’ll be surprised how much your heating and air conditioning bill drops.
Take advantage of these energy savings. Depending on the size of your household, just a 10% savings can put an additional $100 or more annually in your pocket.
Entertainment Ok, so you don’t want to become a hermit. The cost of going out and having fun is expensive. If you’d like to save some money on entertainment and dining out, purchase an Entertainment Book. You can find these coupon books at your local book store or go to www.entertainmentbook.com. The Entertainment Book includes thousands of vendors both nationally and locally. Coupons include discounts on movie tickets, groceries as well as buy one get one meal free at local restraints. Go out to dinner just once and the book pays for itself.
As you can see, the typical household can save $1000 or more per year if some minor changes in your day to day living are made. The key is to look at you monthly recurring expenses and to slice 10% or more off those monthly expenses. Being a little cheap doesn’t hurt either!
Larry Lane is the editor for www.InvestorZoo.com, a social media website specializing in personal finance
About the Author
nvestorzoo brings you weekly deals on credit cards, high yield checking accounts as well as CD and money market yields. You’ll also find over a directory of over 10,000 financial professionals in many categories in all 50 states.
Are you a financial professional looking to help people with money issues and gain world wide exposure? InvestorZoo.com is the 1st true social network dedicated to the world of personal finance. Answer questions on our public forums, receive leads and start a profile. We are accepting profiles from any licensed professional (in good FINRA standing) or published financial author.
If you have any questions, please drop me an email at larry.lane@InvestorZoo.com or 425-591-9315..
The Law of Unintended Consequences, House Chamber, Washington DC, March 3, 2009
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