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Wow. That is incredibly dumb advice. You could have just put that money in a basic 1% interest savings account and you'd have had $16,160 by the end of the year. Instead, you apparently have so little willpower to save the money bit by bit, that you gave Uncle Sam $160+ in interest on YOUR OWN MONEY.
Better advice is to have $50 per pay period directly paid towards extra on your student loan or car payment or whichever debt you want to aggressively lay down. You'll save in interest on that loan (which is way more than the 1% you'd earn in a savings account) and pay down the principal faster.
Perfect advice. I know plenty of people that like to save by having the money sent to the IRS for the year and then are so happy when they get that tax return money. The majority of those people end up spending the money and never save or pay off the debt. Much better to pay directly towards the debt, especially if you can't seem to keep money in your pocket. LOL
Have the government take more taxes than necessary out of your pay check. If you can afford an extra $50 x 26 payperiod = $1300 at the end of the year to go to debt relief. I am in a higher tax bracket and I am getting back $16,000. That's right Sixteen grand. All that goes to pay off all my credit card debt. By next week the only bill I will have is my mortgage payment.
Keep up the good work on the working that second job. I had done it for over 20 years and it paid off handsomely. The exess cash I generated went into my 401k so I would think twice about giving the second job up once you get your debt down. Like you said once you get a better paying job then you can give the second one up but I really would think twice about doing that unless you are moving out of town which I did and had to give it up;
Keep up the good work.
I claim extra deductions and put the extra money in the bank. This way I make interest on my payroll tax deduction money. I've never had to pay any money back, but if I did, I would rather pay the government out of my interest earned money than to have them hold my money all year with no interest.
In Florida I claim 4 deductions and file my Income tax with only 1. I don't get much of a return back.....but I've built up a sweet savings account through the years.
I claim extra deductions and put the extra money in the bank. This way I make interest on my payroll tax deduction money. I've never had to pay any money back, but if I did, I would rather pay the government out of my interest earned money than to have them hold my money all year with no interest.
In Florida I claim 4 deductions and file my Income tax with only 1. I don't get much of a return back.....but I've built up a sweet savings account through the years.
wow, I hadn't considered that. very cool idea. Now if we can find a way to save our Social Security and other items and pay at the end of the year. Very cool.
I claim extra deductions and put the extra money in the bank. This way I make interest on my payroll tax deduction money. I've never had to pay any money back, but if I did, I would rather pay the government out of my interest earned money than to have them hold my money all year with no interest.
In Florida I claim 4 deductions and file my Income tax with only 1. I don't get much of a return back.....but I've built up a sweet savings account through the years.
I do this, too. 4 deductions is the "magic number" so that I break even- never owe and never more than $1,000 back. I'd much rather control all of my net pay throughout the year than give the Feds a loan!!
Yasee, I'm not in debt, but I never HAVE been in debt. (I don't count monthly reoccurring expenses such as rent, Phone bill etc as they are bills for services rendered in that period) But even in those cases I pay a month ahead (So if I'm 'late'... There is no fee) or just round up to the nearest $100 to keep my monthly accounting easy. (It adds up)
But, as encouragement I CAN offer that it's a GREAT way to live.
I pay cash for everything, live on less than my income, but when you do that for just a few years it's VERY easy to 'build up a stake'
Then, after a few years you are used to only spending money on things which are important to you (I used to be REALLY cheap. Now I'm not so cheap, but only buying if it's 'worthit' to me is ingrained enough that it's a nonissue and requires no thought.) You'll have enough money put back that if there is an unexpected expense, a trip, or toy you want...
You simply pay for it, as easily as people whip out the credit card.
I have no intention on being debt free until my 60s. To me people who want to be without debt are scared of taking on smart risks and are passing on the potential to increase their net wealth and cash flow. Go read up on how to wisely use leverage and stop dreaming of a small life with small goals. Stop using debt to consume and start using debt to control income producing assets.
I have no intention on being debt free until my 60s. To me people who want to be without debt are scared of taking on smart risks and are passing on the potential to increase their net wealth and cash flow. Go read up on how to wisely use leverage and stop dreaming of a small life with small goals. Stop using debt to consume and start using debt to control income producing assets.
LMFAO!!!
SCARED?
I've jumped out of Helos, been shot at, gone through doors with people trying to kill me on the other side etc.
I started investing in the stock market at age 14/15, and am still in.
My net worth is higher than it should be if I were 5 years older.
(Not that big a deal when your 55, but when your not 30 yet....)
I have an AVERSION to owing others, but I hear what you are saying about 'using other people's money'
So I sat down with one of the few 'money people' who's opinion I both value and trust.
I was looking at getting a morgage and doing just what you say. Using the money better elsewhere.
Ran the numbers several ways, and I can't make enough, after deducting both risk and taxes (Gatta factor the taxes in to you 'profits vs what you pay) to make it worth the risk. (It really is about a wash, IF things go well.)
SO, I'll keep investing my money, and my time.
-Speaking of increasing your cash flow, it's AMAZING how no debt does that! No $500 per month car payment... an "Extra" $500 per month cash flow!
I guess being scared is why tomorrow me and my pardner are going out of town to meet some people to work on getting our first consulting contract for our new business.
The last thing I bought that I did not pay cash up front for was a new 1970 Datsun 510. which I paid off in 18 months, so the last time I made a payment on something was about 40 years ago. I have never carried a credit card balance in those 40 years, either. Since then, I've been around the world a couple of times, and I've lived in 7 countries, without evr incurring debt..
Of course, every month I get invoices for things I haven't paid for yet, like utilities. Do those count as "debts" I need to get free of?
Quote:
Originally Posted by mideast
Have the government take more taxes than necessary out of your pay check.
Does the government pay you interest on that money you loan them? Would somebody else, if you loaned to them instead?
Quote:
Originally Posted by Willy702
To me people who want to be without debt are scared of taking on smart risks and are passing on the potential to increase their net wealth and cash flow.
That only works if you are smarter than the big banks, nave better connections, have more manipulative leverage, and can invest on a larger scale. I doubt if you are.
If a bank can make (say) 5% on their investments, they would not loan it to you for less. If they can't make 5% on it, why do you think you can, on the money you borrow from them?
I have enjoyed, for several decades, the psychological comfort of not being in debt and having enough liquid capital for anything I could possibly ever want or need, and if you want to convince me that I'd be happier if I were in debt, I'll be a tough sell.
We're getting close, other than our house. A small amount of student loan debt my wife brought into the marriage, which will be paid off in less than a year (possibly sooner). Paid cash for our cars, never carried credit card debt, etc. We both make decent incomes right now, but don't live an extravagant lifestyle, so we have a decent savings built up already. Life is really less stressful without payments going everywhere.
At 34 and 32, hubby and I are debt free other than a 5 digit mortgage. We hope to have that paid off by the time I hit 40. We only make $60k a year, so we are definitely middle class, average working joes. Also, our house payment is substantially less than rent would be in our market, so an arguement could be made that that payment isn't really even debt, since you have to live somewhere.
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