Between my latest non-fiction project and tax season I’ve been thinking a lot lately about money…
One of the things I’ve been seeing is people’s perception of extra money and how it can get you into trouble. We all know that the tax man wants his cut, and a higher tax bracket or getting caught cheating on your taxes gets you in trouble, but what about cases that don’t raise your tax rate? What about times where the tax man has already taken his cut…?
Yes, I’m saying the “three paycheck month” can bite you!
Actually it happens all the time… Someone thinks “I get $2000 per pay check and I have an extra pay check this month. So I have $2000 to spend on a toy.” Then it happens; the bank comes back with an overdraft for a few hundred dollars. How did it happen?
Well, it’s because that ‘extra’ pay check isn’t as ‘extra’ the person thought. Sure it doesn’t have any monthly expenses coming out of it, but not all our expenses are monthly. For a lot of us food, fuel, and similar items are weekly expenses. That means we’re paying for them every week, not just four weeks per month. And they come out of those ‘extra’ checks too…
There might actually be some unallocated money in that third paycheck, but the whole check isn’t necessarily ‘extra’. The good news is if we plan how to sue that extra check we can do some real good and or have some real fun.
It’s just like everything else dear reader. You plan and choose and that’s how you get through.
That’s it for this one dear reader. See you next post.