In the musical "The Music Man" there is a scene where gossipy old ladies sing "Pick a little, talk a little, cheep cheep cheep". It serves as a perfect lead in to an analogy for your paycheck (those of you who have one).
When you are employed by someone you receive a paycheck for your services weekly, bi-weekly, semi-monthly or monthly. It is the financial fulfillment of your employment contract. Of course there are many intangibles such as job fullfillment, goal achievement and comradere. Ha. Ha. Ha.
Let's assume you get $1,000 per week for your services. Here it is okay to have automatic deposit into your checking account on payday. If you are sick or out of town or on vacation, your money is there for you. I use to get my paycheck and cash it on bus on the way home.
Now for my analogy. The government, the bureaucrats, and the company all have plans to reduce your $1,000. They "pick a little, take a little, and chip chip chip" at your money.
First is social security. It is a 6.2% and goes to pay for my retirement. $62. Thank You. I did it for 37 years.
Then there is 1.65% for medicare insurance. $16.50.
Oh yes, you filled out a W-4 for dependents which determines how much Federal Tax is deducted. You have no idea what you were doing! Lets say you have 20% taken off for Federal Tax or $200.
Because you live in Wisconsin, State Tax is required. Another 5%. Good-bye $50.
One of the benefits of working for a business enterprise is that normally you are allowed to participate in the health plan. It is a good benefit but employees need to pay part of the monthly premium. Let's say $50 per paycheck. Not an unusual amount.
Then there is the opportunity to set aside money into a 401k plan which is not subject to tax but it comes out of your pay and you get it when you are 59.5 years old or retire. Many companies match. Lets say the company matches you dollar for dollar up to 4%. So $40 more is set aside out of your paycheck.
There are life insurance opportunities, medical savings accounts and other potential deductions to ravage your $1,000.
If I calculated correctly, there would be $418.50 deducted from your $1,000. You get in your hand, $581.50. Jesus! It is like a train wreck. The good news is that some of the money went to your retirement through social security and the 401k is your money if you ever leave the company and it was a good investment. You need the medical coverage so it is fair for participation in a group plan.
Then when you take the $581.50 home, some of the money goes for sales tax on essential products and property tax is part of every mortgage payment. Then you have wife and kids needing care. Then the church wants money. And then you dream of the Porshe Cheyenne that you will never own.
Did you notice how nicely the saga of the paycheck fits "pick a little, take a little, chip chip chip".
Don't despair. Gets raises. Earn more. Do the 2 income family bit. Eventually you'll have lots of discretionary money and you can support your parents in their old age.
Love,
Dad (Just Chas.)
now wait just a minute!
You wrote 3-4 paragraphs of how we are losing money before we even see the money hit out account, but then you say don't despare?
seems to me it sounds like the rat on the wheel.....we just keep going around and around. The more we go around the more "they" take.