1. Money

How to Make the Most of Your Paycheck

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When you receive your first paycheck you may be surprised at how much is being taken out. As a young single worker, you are at a disadvantage when it comes to taxes. You will have fewer deductions than those people who are married and have children will. If you do not own a home, then you will not have those deductions either. If you are in a higher tax bracket, you may be surprised to realize just how much is going to taxes each paycheck. If you are being paid with a prepaid debit card, you may also face hidden fees associated with the card. You can make the most of your paycheck by taking advantage of these benefits offered by your employer.

Difficulty: Easy

Time Required: 20 minutes

Here's How:

  1. If you sign up for the benefits offered by your employer, you can reduce your taxable income and make your dollars stretch farther. It is important to carefully consider what you are signing up for and how it may affect your tax picture. You may be surprised at what you find.

  2. As you consider what benefits to sign up for, you may feel that you can not afford them all. However, if you check with a payroll calculator, you may be surprised to see that your insurance premiums and 401K contributions really do not affect your paycheck by much. This is because the amount you are taxed on decreases, and so the tax you pay also decreases.

  3. If you sign up for the benefits, be sure to take advantage of them. The eye insurance may be great, but if you never use it, you are just throwing money away. Similarly you need to make sure that you use all of the money in flexible spending account.

Tips:

  1. You can stop living from paycheck to paycheck by setting up a budget and saving money each month. Set up an emergency fund, and then work on getting out of debt as quickly as you can. The financial habits that you set up now will benefit you in the future.

  2. Sign up for your retirement account as soon as you qualify. This is one habit that will help you in the future. You can also begin contributing to an IRA if you do not qualify for retirement accounts through your employer. It is important to begin regularly contributing to retirement so that you can retire comfortably.

  3. If your new job offers bonuses, you should not include them in your budget. the bonuses may vary from quarter to quarter, and you may not receive a bonus every year. Instead, you should create a spending plan for your bonus and use it to help you reach your financial goals more quickly.

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