Life is expensive, and while you may be filled with resolve and self-control, what happens when income loss isn’t your choice? We all feel defeated by unavoidable costs, but often fail to examine them from another angle. Alter your perspective by challenging the items below. The result could change your life.
- Income taxes. Two things in life are certain: death and taxes. A warm sentiment, eh? Despite the negative connotations, filing federal and state income taxes doesn’t have to be a downer. There are plenty of ways to minimize your tax burden and gain a return in April. Talk to your financial planner about strategies and file your taxes in multiple ways. For example, does a long form offer better savings than the short form? How does your income bracket affect your qualifying deductions? Ask these question before Uncle Sam collects next year. Forethought makes all the difference.
- Property taxes. Homeowners understand the uncertainty surrounding property taxes. A reassessment can wreak havoc on a well-balanced budget. Consider the following example:
Ash and Stella Vonn bought their home two years ago. The neighborhood is growing fast and property values are improving. While the Vonns are excited about neighborhood growth, they are discouraged by their tax bill. A hasty assessment has increased their burden by $700 a year.
A tax bill is daunting, but it isn’t set in stone. Learn more about the appeals process to keep your taxes low.
- Salary. There’s no room for shyness where salary is concerned. Understanding your value is the first step in earning a fair paycheck. Consider Jane’s situation:
Jane is a 25-year-old administrative assistant at a Fortune 500 company. She’s held her position for three years and has become a vital member of the office staff. Before her annual review, Jane researches similar positions based on skillset and experience. To her surprise, she qualifies for several HR manager jobs within the same field. During her review, Jane presents the facts to her boss, asking for a title change and a sizable raise. Her professionalism is rewarded.
Don’t allow timidity to limit your earning potential. Do some research to determine your professional worth and summon the courage to ask for it.
- Cost of living. It’s easy to feel discouraged in the face of rising costs. Rent, food and gasoline are just a few of the expenses that chip away at a budget. That said, don’t allow excuses to facilitate poor finances. There are plenty of ways to cut spendingand stay on track.
- College. Education is expensive, period. Whether it’s a personal goal or planning for your kid’s future, planning is crucial. Despite the looming costs, don’t assume a flat rate for every degree. For example:
Josie, Morgan and Steven are high school seniors. Each student was accepted into the same four-year university. Tuition and fees total $19,500 per year. The students manage the expense in the following ways:
- Josie attends the university for four years, using student loans to fund her education. Total expense: $78,000.
- Morgan attends a community college for two years to complete his core requirements. He completes his junior and senior years at the university. Total expense: $51,000.
- Steven follows Morgan’s path, but opts to apply for scholarships and work-study programs while attending the university. He is awarded $25,500 during his final college years. Total expense: $25,500.
As we learned from these students, education expenses are variable. While Josie struggled with student loans, Steven earned the same degree for a fraction of the price. Take a lesson from his wisdom and apply the same strategies to your own life. You’ve got nothing to lose.