WHERE DOES THE MONEY GO?

A Lesson in Adulthood

Step 1: Let’s Take Out Federal Income Tax

If you will make $9, 075-$36,900 Subtract 9,075 from your income Multiply remainder by .15 Add $907.50 to that number. This is total is

your tax.

EX: 30,000-9,075= 20,925 20,925x0.15= 3,138.75 3,138.75+907.50= 4,046.25

Federal Income Tax

If you will make $39,900.01-$89,350 Subtract 36,900 from your income Multiply remainder by .25 Add $5,081.25 to that number. This is total is

your tax.

EX: 75,000-36,900= 38,100 38,100x0.25= 9,525 9,525+5081.25= 14,606.25

Federal Income Tax

If you will make $89,350.01-$186,350 Subtract $89350 from your income Multiply remainder by .28 Add $18,193.75 to that number. This is total is

your tax.

EX: 150,000-89,350= 60,650 60,650x0.28= 16,982 16,982+18,193.75= 35,175.75

You’re not done. Go to step 2: State tax!

If you will make $25,000-$49,999.99 Multiply your original income (not after

federal tax amount) by .0336 Add $691.00 to that number. This is total is

your state tax. EX: 40,000x0.336= 1,344 1,344+691= 2,035

State tax!

$50,000-$149,999.99 Multiply your original income (not after

federal tax amount) by .0424 Add $1,531 to that number. This is total is

your state tax.

EX: 70,000x0.0424= 2,968 2,968+1,531= 4,499

Still not done! Have to pay for the old people! Go to Step 3: Social Security

Multiply your original income by 0.062. This is your total social security contribution

EX: 60,000x0.062= 3,720

Now, let’s see the money you put in your wallet…

Add federal taxes, state taxes, and social security. These are your total required deductions.

Subtract that number from your income The result is you NET yearly pay

EX: For 50,000 FED= 8,356.25 + STATE= 3,651+ SS= 3,100 Taxes together = 15,107.25 NET: 50,000-15,107.25 = 34,892.75

Insurance/Retirement

Health Insurance Obamacare is typically $100-$200 per month

Depends on how much you make… Employer Health Insurance

For an individual can be $200-$400 out of your check. 34,892.75-2,400=32,492.75 ($200 p/mo.)

401K/Pension A 401K is a savings plan for retirement.

Sometimes your employer will contribute or match your contribution. You can decide how much to put in, up to typically 10% of your annual

salary, it depends … 32,492.75-1,200= 31,292.75 ($100 p/mo.)

Pension If you work for the government, you put money from your current check into

a pension fund. It is typically 11-13% 50,000x0.12= 6,000

Now, Lets See What You Make Per Month

Divide your NET yearly pay by 12. This is what you have to live on each

month.

EX (For 50,000) 31,292.75/12= 2607.73

Sounds pretty good, huh? Now let’s look at expenses.

Though the total check amount MAY look good compared to what you are currently used to, let’s spend some time on what you HAVE to spend to live and see what’s left.

Place to Live:

Subtract the monthly rental amount from your monthly income EX: 2,607.73/3= $870 $2607.73-870= 1737

Subtract about $150 for cable and internet Subtract about $150 for electricity and water Subtract you cell phone bill (figure about $50

if you aren’t sure) What do you have left?

1737-150=1587, -150=1437, -50= 1387

What about student loans?

For every $10,000 in student loans, expect to pay about $110 per month FOR TEN YEARS Example: $40,000 in student loans = $440

per month FOR TEN YEARS That $40,000 dollar loan will cost you about

53,000 ASU/UofA = approx. $12,000 p/yr

(x5=60,000) 60,000 = 660 p/mo. 1387-660= 727

Car payment 250-500

727-200=527 Car insurance

100-150 527-100=427

Gas 100-300

427-100=327 Renter’s insurance

15 327-15=312

Car maintenance 0-2,000

Groceries (Food, toiletries, and household products) 200-400

312-200=121 Pet related costs

20 121-20= 101

Time to pay the bills!

How’s it looking so far?

As we go through each of these, subtract the amounts we decide are appropriate from your salary.

More bills…

Gym membership? Haircuts? Clothing? Netflix, Hulu, Amazon Prime? Travel? Eating out? Movies/entertainment? Starbucks? Books? Anything else?

Any left to put in savings????? Welcome to adulthood. Yes, it kinda

sucks.

Remember that college graduates make $1,000,000 more in their lifetime.

Getting scholarships to help pay for college, will decrease your monthly bills (school loans).

Writing excellent personal statements will help you earn scholarships…