Money Matters: The Money Trap

Are you tired of not being able to take that dream vacation? Do you constantly find yourself doing nothing but paying interest on top of interest? Do you want to make a better future for yourself, your kids, and your potential grandkids?

Everyone has a money problem nowadays and the main complaint is not making enough for the lifestyle you want. What if there was a way to adjust your income to where you get the most of it instead of the least? Do you know where your money goes or why there always seems to be so little? I’m here to help you figure that out and get back on the track that will make your retirement lifestyle not all pinching pennies.

America is a capitalistic society. And this is true. It takes money to earn money. The question is how to get that money working for you. There are three main types of income.

W-2 Income: You work, you’re taxed, then you spend.

Working for someone else with a W-2, a person is being taxed approximately 28-33 percent. That means that nearly one third of their income goes back to the United States. If you get back money in taxes, that means that you paid too much into it, which is 80 percent of America. With inflation being the silent income killer, you have less and less money in your pockets to live comfortably after all bills and debts are paid. Check your form W-4 to make sure that you have it completely up to date and all allowances and that your withholdings are correct. Remember, Uncle Sam doesn’t pay interest on your refund.

Business Income: I earn, I spend, I'm taxed.

Business income is taxed at 18- 23 percent. That can be nearly half of what you’re paying in working for someone else. I’m not saying immediately quit your job and start a business, you still need that money until your business begins to profit and you can spend more time doing it. Even an artist needs money for supplies while waiting to get noticed. Yes I know, it takes money to make money. The question is, are you willing to invest that money for you to begin earning the money?

Investment Income: Money Growing Itself

The number one thing that gets said by most people is that they don’t have the money to invest. If you had $2k laying around, would you invest it or spend it on something that you might not necessarily need but wanted your lifestyle to look better in the eyes of other people? Ninety five percent of the population is the type that would prefer to look better no matter how much debt they go into. If you have an extra $5, $10, $20, $50 a month, you can set it aside and invest it. I’m not suggesting go into the high risk stocks and bonds without any knowledge, but there are other ways to invest. IRAs have a much higher interest rate than a checking or savings account, and property with the way inflation is going will be worth more in 20 years than it is today. I’d rather pay the 15 percent tax rate on $2k than upwards of 33 percentpersonally.

Things That'll Get You Where You Want to Be

There's many things that a person can do to get where they want to be with their money. Even just starting out to get on the right track of retirement and living the lifestyle that you want.

Get Cash Back When Shopping

“Impossible” I had someone tell me once when I brought this up. There’s actually many ways to do so, you just have to know how to do it. There’re apps where you scan your receipt and there’s also specialty malls where, when shopping through them at an even larger variety of stores, you can get upwards of 30 percent cash back. Example, you spend $100 at Walmart online on things you want and need, wouldn’t it be nice to get $30 back in your pocket or to buy something else? One example is this mall where they have free printable coupons as well for your normal shopping trips.

Well over 200 stores including Lowes, Walmart, Home Depot, Office Depot/Max, and more.

You just download the app, choose the items you want, buy them at the store, and scan the receipt that has the items.

Tracking your income, expenses, and all other items can help you figure out where your money goes. It may be hard to remember sometimes if you have to drive for work to track those miles as well, especially if you’re self-employed. There are many apps that help with that, but this is one I find most helpful. The Cashflow Manager and it has a low monthly rate of $11. That can be written off as a business expense on your taxes.

What is your credit score? I know that’s something that can be difficult to keep track of, let alone figure out how to bring it up. Yes it’s true that the first thing would be to eliminate past debt that bogs your credit score down, but did you also know to avoid hard inquiries? Something as small as applying for a new credit card puts inquiries on your report and bogs it down as well. I’m sure that there are many different ways to get credit education, learn income shifting strategies, and increase your cash flow. I’ve personally found that the 750 credit plan works very well and has a lot of other resources included with it that help you get on the right track of getting out of debt and getting your credit score up.

Get Rich Quick...I think not.

None of the things in which I’ve suggested are in any way a get rich quick scheme. They are tools to help you learn to manage your money better and invest it in ways where you do not pay so much in taxes, have more in your pocket, and are able to invest it to where you have money waiting for your retirement as well as to where your children or grandchildren do not have the amount of struggle issues that many Americans have today. Long lasting money is not from a scheme. It is a buildup over time, and with smart budgeting, planning, execution of the plan, and investing, you can have the money in which you desire.