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Tax withholding?
ChadTower:
--- Quote from: Ed_McCarron on October 15, 2007, 05:51:13 pm ---Chad: When Peale is giving you financial advice, it just might be time to end it all. I'm just saying.
--- End quote ---
Why is that?
shmokes:
I know full-well that this is the wrong answer, technically, but I really like it anyway. I have always withheld the maximum amount, regardless. It acts as a savings account. I am fully aware that the big difference is that a savings account earns interest and tax withholdings do not, but that's only relevant if the alternative to my withholding was that I would put the money in a savings account. I wouldn't. It would just disappear to every-day expenses. My paycheck would be slightly bigger every two weeks is all, and my lifestyle would most likely just be slightly better. What are we talking, $75 per paycheck? That's not going to make a huge difference in your day-to-day lifestyle, but when you get a $2000 tax return, you suddenly have a REALLY REALLY useful lump sum of money. Are you going to put that extra $75 per paycheck toward your credit cards, or are you going to keep paying minimums and go out to dinner a couple more times per month? Who knows? But when you get that $2000, you can plunk that right down on a credit card and then cut the sonofabitch up permanently. Or make it a vacation fund.
Of course it's better to put the extra money into a savings account if you have the discipline, but the big question is, "Are you filling up that savings account right now?" If the answer is no, then what do you have to lose by having the IRS provide the necessary discipline? A little interest, of course, but really, if you're planning to empty out the account once a year anyway, how much interest are you losing? How much interest does a savings account that never gets above a couple thousand dollars accrue in a year?
billf:
--- Quote from: shmokes on October 15, 2007, 11:46:29 pm ---I know full-well that this is the wrong answer, technically, but I really like it anyway. I have always withheld the maximum amount, regardless. It acts as a savings account. I am fully aware that the big difference is that a savings account earns interest and tax withholdings do not, but that's only relevant if the alternative to my withholding was that I would put the money in a savings account. I wouldn't. It would just disappear to every-day expenses. My paycheck would be slightly bigger every two weeks is all, and my lifestyle would most likely just be slightly better. What are we talking, $75 per paycheck? That's not going to make a huge difference in your day-to-day lifestyle, but when you get a $2000 tax return, you suddenly have a REALLY REALLY useful lump sum of money. Are you going to put that extra $75 per paycheck toward your credit cards, or are you going to keep paying minimums and go out to dinner a couple more times per month? Who knows? But when you get that $2000, you can plunk that right down on a credit card and then cut the sonofabitch up permanently. Or make it a vacation fund.
Of course it's better to put the extra money into a savings account if you have the discipline, but the big question is, "Are you filling up that savings account right now?" If the answer is no, then what do you have to lose by having the IRS provide the necessary discipline? A little interest, of course, but really, if you're planning to empty out the account once a year anyway, how much interest are you losing? How much interest does a savings account that never gets above a couple thousand dollars accrue in a year?
--- End quote ---
I'm reading this in disbelief with this kind of mentality and thinking. Does it really take that much discipline to put away $75 a month? You pay your bills each month, right? Treat the $75 every two weeks ($150 one time a month) as another bill and sock away the money in some type of interest earning account. Why on earth do you want the government to hold and do what it wants with your money? You want the IRS disciplining you? Wow. ::)
shmokes:
--- Quote from: shmokes on October 15, 2007, 11:46:29 pm ---
Of course it's better to put the extra money into a savings account if you have the discipline . . .
--- End quote ---
It's worth pointing out that it takes more discipline than simply putting the $75 into the savings account every two weeks (that's $150/mo.). A measure of discipline is also required in order to keep it there rather than emptying it out every couple months whenever "something comes up". You can roll your eyes all day long, but you can't get around the plain fact that the VAST majority of Americans do not, in fact, have the discipline that you speak of so casually. Most, actually, are in debt up to their eyeballs and live paycheck to paycheck.
Bones:
--- Quote from: shmokes on October 16, 2007, 02:39:52 am ---Of course it's better to put the extra money into a savings account if you have the discipline . . .
--- End quote ---
Pumpkins have been going up all month and I got a feeling they're going to peak right around January.
Bugger the savings account, solid investment right there.....
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