What Are You Doing With Your Pay Raise?
Are you one of the working Americans that received a tax cut? This is an increse in take home pay for millions of Americans. Are you one of the Americans seeing more money in their take home check?
What are you going to do with your tax savings from the federal government? You have a choice on what you will do with this savings. Are you going to do something meaningful or are you going to squander this opportunity?
Yes this is a windfall and you have a choice on what to do with this savings. If you don't think about this opportunity, you will blow this savings and not know where it went. Here are a few ideas you might want to think about.
Rainy Day Fund
Do you have a rainy day fund to pay for an emergency or unexpected expense. Many financial experts say you should have at least 6 months of expenses in your rainy day fund. If you don't have a rainy day fund, you could use your monthly savings from the tax decrease to fund your rainy day fund.
Pay Off Some Credit Cards
Another option is to pay down some credit card debt. Start off by using your tax cuts each month to pay down your credit cards Start by paying more than the minimum payment on the credit card with the lowest balance. After you pay off the lowest balance credit, then take the tax cut plus your minimum payment on the first credit card towards your next lowest balance credit card. Continue this until you pay off as many credit cards as possible. This same approach can be used to pay down student loans.
Invest Your Tax Decrease
Another option is to use your tax reduction to invest in stocks,bonds or real estate. Check out foreclosed homes if you are thining about buying real real estate. You can use these investments to increase your net worth and save for retirement. Do you have children that you want to attend college? Start investing your tax reduction toward their eductaion. Are you contributing the maximum you are allowed into your 401k? Most employees do not take full advantage of their employer provided 401k.
Pay Down The Principle On Your Home
Do you own a home and have a mortgage? You may chose to use use your tax cut to pay down on your principle on your home. Make sure you notify your lender that you want any additional payment to reduce your principle.
Make A Decision
I strongly encourage each of you to make a decision on what you are going to do with this savings. If you make no decision, you will squander an opportunity and waste this opportunity. No one knows how long taxes will remain this low. Do no squander this opportunity.
I understand that not all working Americans will get a decrease in federal taxes. If you did not recieve a tax cut, then you can ingnore this article. Regardless if you recieved a tax cut, these are great ideas for all Americans.
