Your paycheck is under attack. Thanks to our gracious state/local and federal government that seems hell-bent on taxing us on everything but the air we breathe, we now have less after-tax money to invest in our future and to fund our retirement. The public country has a huge tax burden and some argue that taxes will go up even more soon. The American taxpayer will fund our government stimulus package, financial bailouts, and the total mismanagement of our financial system. We will be paying for those who gambled financially, used their homes as ATMs, and those on Wall Street who leveraged themselves into oblivion (literally). In addition to taxes, you have daily living expenses such as utilities, mortgage/rent, car payments, insurance, etc. Why don’t you have money left at the end of the month?
Taxes
Payroll taxes: If you’re one of the lucky people still employed, have you looked at your actual take-home pay? Depending on the state you reside in, it will have a dramatic effect on your actual paycheck. According to paycheckcity.com, a worker who earned $73,500 in New York will take home $52,000. That same worker in Washington state must earn just $67,288 to take home the same $52,000. The privilege of living in the Empire State will cost you 9.1% of your earnings in payroll taxes alone.
property taxes
For those of you who are homeowners, your state will be expecting its share of the pie from your paycheck in the form of property and sales taxes. This can range from 14% of your home’s appraised 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 the gas tax which ranges from 12.4 cents in Georgia to 37.5 cents in Washington state. Remember that the tax is applied to 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 that vary widely could be deciding factors when considering a new job or job. a relocation.
Monthly phone/wireless service
One of the most important steps you can take is to start looking at your monthly recurring expenses. When was the last time you checked the latest deals from wireless service providers? If you’re on an older plan, you may be spending $25 or more per month. If you’re a heavy phone user, there are new unlimited plans that can save you thousands of dollars a year. Do you have a home phone? If you have a cordless phone, I’d say it’s not necessary. Cancel your home phone and you’ll save between $250 and $450 per year.
Cable TV
Reduce your premium channels and reduce the size of your TV viewing. Look for deals not only from your local cable provider, but others like Dish Network and Direct TV as well. Save $20 a month on your TV viewing habits and you’ve just saved another $240 for your future retirement. It’s usually worth calling service providers, such as cable companies, as they offer unannounced specials over the phone. If you’re watching TV and reception is fuzzy, you’ll want to make sure someone answers the phone at 9:00 pm on a Saturday.
Internet service
Have you checked the Internet service prices? There are usually several competing companies in your area vying for your business. Like cable TV companies, it’s often helpful to call these types of service companies, as they often have unannounced deals and specials. When signing up for new service with a new company, always ask about their disconnection policy. Is there a service contract? If so, how many days can you try the service before you get locked out? Is there an activation fee? Lastly, make sure that customer support is available 24/7. Save just $10 a month and now you have an extra $120 a year to invest in your 401k.
Electricity
1. Turn off your water heater – As strange as it sounds, turn off the switch on your water heater. Try it for a month. I think you’ll be surprised how much you’ll save each month. After 3 months, I am averaging a 10% savings. Remember to turn it on before you go to sleep, as it takes 30 minutes to an hour to heat up the water for your shower.
2. Use power strips: Anything you plug into an outlet uses phantom power. Leave your computer on when not in use? Do you have a new flat screen TV plugged into the wall when you are at work or not using it? You are still billed for energy usage. Phantom power usage occurs when any item is plugged into the wall. Connect as many items on a single power strip. Before going to sleep, make sure the strip is unplugged.
3. Insulation: Take a trip to Home Depot or Lowes and pick up some weather stripping for those old drafty windows. You’ll be amazed at how much your heating and air conditioning bill goes down.
Take advantage of these energy savings. Depending on the size of your household, just 10% savings can put an extra $100 or more a year 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 want to save some money on entertainment and dining out, buy an entertainment book. You can find these coupon books at your local bookstore or visit http://www.entertainmentbook.com. The entertainment book includes thousands of providers both nationally and locally. Coupons include discounts on movie tickets, groceries and buy one get one free meal at local restrictions. Go out to dinner once and the book pays for itself.
As you can see, the typical household can save $1,000 or more per year by making a few minor changes to their everyday lives. The key is to look at your monthly recurring expenses and reduce 10% or more of those monthly expenses. Being a little stingy doesn’t hurt either!
