While it’s always advisable to speak to a professional about managing your hard-earned income, there are a few misconceptions about money that you should know about that could improve your finances starting now. After all, every little bit of extra savings can help pay down debt, build an emergency fund, or increase retirement contributions.
The Federal Tax Bracket
The tax bracket system is the government uses to determine what you owe Uncle
Sam. In simple terms, the more you make per year, the more money you owe to the
federal government. But there are a lot of misunderstandings about taxes. Here
is what you should know about how tax brackets really work:
Let’s start with what the system is. Your bracket is determined by your AGI – Adjusted Gross Income – which is your income after deductions. There are seven brackets that range from 10% all the way up to 37%. The income you will be taxed on does vary depending on whether you are the head of the household, single, or married.
Don’t be scared to make more money and shoot for that Steph
Curry net worth (well maybe temper expectations a little). It’s true that
if you make more money, you will pay more taxes. However, you only pay the
additional percentage for the income within that certain tax bracket. The
entirety of your income will not be taxed at that certain rate.
Building
Credit is Hard
Credit is one of the most important things in modern society. It gives you
chances to get loans, obtain a home, and have emergency cash. However, a lot of
people are overwhelmed by improving or building their credit from scratch.
Luckily, it is not hard as you think.
The first thing to understand is that your credit score is very important. You can check it for free at a variety of sites. Once you know this, you at least know where you stand. Then, you can get a free credit report every year that gives you more detail about your credit situation.
From there, you simply need to do a few things. First, start to pay your bills on time each month. This is slow but sure process. Secondly, you can find loans or cards that are designed for nothing other than helping you build your credit over time. Before you know it, you could have great credit.
You Don’t Have to Get a Raise if You Want to Make More Money
Your job is your sole source of income. So of course, if you want to make more money, you would think that the only way to do it is through a raise. However, that is not the case. There are many ways to make a side income if your day job isn’t going to cut it.
First of all, everyone has extra tings that they could do without. You can go through your personal items and find old toys, tools, clothes, and other items that someone else would appreciate and pay you for. Secondly, with the internet, you can make money online with virtually any skills. Freelancing platforms are more popular than ever and give you a way to put your knowledge to use.
The reality is that if you put in the hard work, you can find new ways to make money. Perhaps you do it online or even offline, but the opportunity is there. The key is to carve out enough time each week to dedicate to this new side job so your finances can improve.