In this episode of Tightwad Tuesday, I share my story of avoiding a unibrow, fraud alert, and the resulting love connection.
When your paycheck hits your bank account, it might not look like much.
Federal, State, Social Security and Medicare taxes are taken out. Medical, dental and vision insurance and your 401(k) contribution are withdrawn before you even see your check.
Automatic deductions such as your Employee Stock Purchase Plan, car payment and transfer to savings hit, too. Your net pay looks a lot different than your gross pay. Don’t let that fool you though.
When you look at one single net paycheck, your income stream might look small but when you look at how much money you make over your lifetime, it’s astounding!
For example, if you make $50,000 and get a 3% raise each year, even if you never get a bonus or promotion, you’ll make $3.7 million dollars over your lifetime!
Even if you are at the tail end of your career, you’ll still make a lot. For example, if you have 10 years left to work and make $100K per year, you’ll make another million dollars before you retire.
Let’s face it. A lot of money flows through your hands. It might not seem like it, but it does.
The key is to keep some of it.
Check out this Lifetime Income Calculator and see how much you’ll make during your career.
If you are inspired by this idea, do something about it.
Here are 5 ways to keep some of your money:
1. Bump up your 401(k) by 1%
2. Start a Roth IRA (if you qualify)
3. Set up an automatic transfer from checking to savings or an investment account (timed to hit on payday)
4. Enroll in your employee stock purchase plan at work
If you need to, change your mindset. Tell yourself:
I make a lot of money, I’m going to keep some of it.
Are you looking to make your financial life easier? I just came across a tip you might have heard but forgotten.
Review your credit reports to spot errors – for free.
There are a lot of errors, by the way. A Federal Trade Commission’s study showed 25% of credit reports had errors and 80% of disputed claims produced some kind of modification. Since it is free, it’s worth it. Check your credit report at least once a year.
Guess what? I just got mine and it only took me 5 minutes from start to download. Most of that time was spent answering questions to verify my identity such as streets I’d lived on and dates of financial accounts I’d opened.
The credit bureaus have to give you this information. The Federal Trade Commission requires them to provide information to individuals at least once annually for no charge. You won’t obtain your credit score this way but you’ll at least get your credit information.
Go to Annualcreditreport.com, verify your identity by answering the questions and either order reports from all 3 agencies at once, or stagger them throughout the year. If you plan on making a large purchase such as a car or obtaining a mortgage, order them all at once. Also, frankly, if you are a procrastinator and just want to knock this out and be done, do it.
Otherwise, you might want to order one report now, another in the spring and the final one in the fall. That’s what I did. This way you are on top of your credit reporting throughout the year.
By the way, this is the legit site – watch out for copycats. No credit card required. Oh and if you do find an error on one of your reports, dispute it right there. It’s easy.
I’d be happy to help – I’ve done it a few times myself since the name Anderson is extremely common, my husband and I end up with some interesting items on our credit reports! So let me know how it goes.
For more information check out the FTC’s site here:
Happy New Year and cheers to meeting your financial goals in 2017.