where does the money go? a lesson in adulthood. step 1: let’s take out federal income tax if you...
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WHERE DOES THE MONEY GO?
A Lesson in Adulthood
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Step 1: Let’s Take Out Federal Income Tax
If you will make $9, 075-$36,900 Subtract 9,075 from your income Multiply remainder by .15 Add $907.50 to that number. This is total is
your tax.
EX: 30,000-9,075= 20,925 20,925x0.15= 3,138.75 3,138.75+907.50= 4,046.25
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Federal Income Tax
If you will make $39,900.01-$89,350 Subtract 36,900 from your income Multiply remainder by .25 Add $5,081.25 to that number. This is total is
your tax.
EX: 75,000-36,900= 38,100 38,100x0.25= 9,525 9,525+5081.25= 14,606.25
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Federal Income Tax
If you will make $89,350.01-$186,350 Subtract $89350 from your income Multiply remainder by .28 Add $18,193.75 to that number. This is total is
your tax.
EX: 150,000-89,350= 60,650 60,650x0.28= 16,982 16,982+18,193.75= 35,175.75
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You’re not done. Go to step 2: State tax!
If you will make $25,000-$49,999.99 Multiply your original income (not after
federal tax amount) by .0336 Add $691.00 to that number. This is total is
your state tax. EX: 40,000x0.336= 1,344 1,344+691= 2,035
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State tax!
$50,000-$149,999.99 Multiply your original income (not after
federal tax amount) by .0424 Add $1,531 to that number. This is total is
your state tax.
EX: 70,000x0.0424= 2,968 2,968+1,531= 4,499
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Still not done! Have to pay for the old people! Go to Step 3: Social Security
Multiply your original income by 0.062. This is your total social security contribution
EX: 60,000x0.062= 3,720
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Now, let’s see the money you put in your wallet…
Add federal taxes, state taxes, and social security. These are your total required deductions.
Subtract that number from your income The result is you NET yearly pay
EX: For 50,000 FED= 8,356.25 + STATE= 3,651+ SS= 3,100 Taxes together = 15,107.25 NET: 50,000-15,107.25 = 34,892.75
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Insurance/Retirement
Health Insurance Obamacare is typically $100-$200 per month
Depends on how much you make… Employer Health Insurance
For an individual can be $200-$400 out of your check. 34,892.75-2,400=32,492.75 ($200 p/mo.)
401K/Pension A 401K is a savings plan for retirement.
Sometimes your employer will contribute or match your contribution. You can decide how much to put in, up to typically 10% of your annual
salary, it depends … 32,492.75-1,200= 31,292.75 ($100 p/mo.)
Pension If you work for the government, you put money from your current check into
a pension fund. It is typically 11-13% 50,000x0.12= 6,000
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Now, Lets See What You Make Per Month
Divide your NET yearly pay by 12. This is what you have to live on each
month.
EX (For 50,000) 31,292.75/12= 2607.73
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Sounds pretty good, huh? Now let’s look at expenses.
Though the total check amount MAY look good compared to what you are currently used to, let’s spend some time on what you HAVE to spend to live and see what’s left.
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Place to Live:
Subtract the monthly rental amount from your monthly income EX: 2,607.73/3= $870 $2607.73-870= 1737
Subtract about $150 for cable and internet Subtract about $150 for electricity and water Subtract you cell phone bill (figure about $50
if you aren’t sure) What do you have left?
1737-150=1587, -150=1437, -50= 1387
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What about student loans?
For every $10,000 in student loans, expect to pay about $110 per month FOR TEN YEARS Example: $40,000 in student loans = $440
per month FOR TEN YEARS That $40,000 dollar loan will cost you about
53,000 ASU/UofA = approx. $12,000 p/yr
(x5=60,000) 60,000 = 660 p/mo. 1387-660= 727
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Car payment 250-500
727-200=527 Car insurance
100-150 527-100=427
Gas 100-300
427-100=327 Renter’s insurance
15 327-15=312
Car maintenance 0-2,000
Groceries (Food, toiletries, and household products) 200-400
312-200=121 Pet related costs
20 121-20= 101
Time to pay the bills!
How’s it looking so far?
As we go through each of these, subtract the amounts we decide are appropriate from your salary.
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More bills…
Gym membership? Haircuts? Clothing? Netflix, Hulu, Amazon Prime? Travel? Eating out? Movies/entertainment? Starbucks? Books? Anything else?
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Any left to put in savings????? Welcome to adulthood. Yes, it kinda
sucks.
Remember that college graduates make $1,000,000 more in their lifetime.
Getting scholarships to help pay for college, will decrease your monthly bills (school loans).
Writing excellent personal statements will help you earn scholarships…