Your guys’ lifestyles are creeping up?
My raise was 100% eaten by taxes.
Then with everything rising, I am now making a couple thousand dollars less than I did two years ago, even with all of those raises.
That’s not possible. That’s not how tax brackets work at all.
Property tax increases could eat it up.
Then that would have been a good clarification to include in the statement. But when someone said their raises are eaten by taxes, one immediately assumes income tax.
To be fair, in places where income taxes are bracketed rather than in smooth percentages, it can happen. It’s much more common with bonuses and heavy OT to jump you up for a single paycheque, though.
“To be fair,” no it can’t, at least not in the US. The top tax bracket for income I think is around 37%. And the next lowest is in the high 20s, but I don’t know what the $ amount is, but I think you gotta clear a half mil + a year before you get to that 37%. So make a mil a year? 37%. 2 mil? 37%. No matter what you’re making you’re not getting to 100%. So I don’t know where you live, but here in the US there’s no way to hit 100% on personal income tax, the tax that’s being discussed.
Not US.
Never heard of 100% taxing here, what I have seen is raises and promotions ending up in a slightly smaller paycheque. Whether that’s due to other factors such as a higher misaligned bracket of state medical insurance or benefits, union fees, I’m not entirely sure, it was more of a warning to watch your first couple of paycheques after a raise.
What this talks about is part of the problem. It is very easy for to treat yourself a little every time you get a raise and for that to become the new normal. I certainly did that when going from school to my first job and as my salary rose in that position. I had to really sit down and put together a budget before I could start saving.
Bigger parts of the problem are salaries not keeping pace with inflation and insane housing costs.
Yet another cause is lack of financial literacy. We aren’t taught how to budget and save. Some may be taught by their parents but many don’t get that. Schools certainly won’t teach financial literacy. That would hurt consumer spending and that wouldn’t be good for short term corporate profits and continued economic growth so it won’t be in our curriculums.
Yet another cause is lack of financial literacy. We aren’t taught how to budget and save. Some may be taught by their parents but many don’t get that. Schools certainly won’t teach financial literacy. That would hurt consumer spending and that wouldn’t be good for short term corporate profits and continued economic growth so it won’t be in our curriculums.
I realize I have no idea how financially literate or illiterate the average person is.
When I was planning on moving out, I opened a spreadsheet on my computer. Maybe that’s already a leap beyond what the typical person would do?
I made a row for each expense I thought I’d have, rounded up to create some headroom. Plus a row for ‘Other’ with a sizable number to account for stuff I hadn’t thought of. Summed that up.
Made another row with my gross pay. Looked up about how much I’d keep after taxes. About 70%. Calculate that value on another row. Divide that by 12. That’s monthly net take home.
Compared that number to the number from the first section. If I’m not taking home more than my expenses, that’s a problem.
What is everyone else doing? No one taught me that. It just seemed like how I’d add up my expenses and compare to my income. It’s not perfect, but it helped me see what kind of rent was way out of reach.
