My Personal Finance Journey

Personal finance observation, musing and decisions in a journey toward financial independence by 2020 with at least $3 million.

By Topics

Overall:
0. About (10)
1. My Progress (139)
2. Car & Home (107)
3. Credit (138)
4. Banking (33)
5. Saving (49)
6. Investing (308)
7. Taxes (89)
8. Spending (74)
9. Misc (97)
A. Archive (49)



MONTHLY ARCHIVE

Feb 2014 (3)
Jan 2014 (6)
Jan 2012 (1)
Apr 2011 (1)
Mar 2011 (1)
Feb 2011 (1)
Jan 2011 (1)
Dec 2010 (1)
Oct 2010 (1)
Sep 2010 (1)
Aug 2010 (1)
Jul 2010 (1)
Jun 2010 (1)
May 2010 (1)
Apr 2010 (1)
Mar 2010 (6)
Feb 2010 (2)
Jan 2010 (7)
Dec 2009 (3)
Feb 2009 (4)
Jan 2009 (8)
Dec 2008 (1)
Jun 2008 (2)
May 2008 (2)
Apr 2008 (5)
Feb 2008 (3)
Jan 2008 (15)
Dec 2007 (32)
Nov 2007 (6)
Oct 2007 (8)
Sep 2007 (9)
Aug 2007 (24)
Jul 2007 (2)
Jun 2007 (1)
May 2007 (3)
Apr 2007 (4)
Mar 2007 (4)
Feb 2007 (13)
Jan 2007 (6)
Dec 2006 (3)
Nov 2006 (7)
Oct 2006 (7)
Sep 2006 (6)
Aug 2006 (4)
Jul 2006 (10)
Jun 2006 (1)
May 2006 (3)
Apr 2006 (2)
Mar 2006 (6)
Feb 2006 (6)
Jan 2006 (3)
Dec 2005 (1)
Nov 2005 (9)
Oct 2005 (8)
Sep 2005 (13)
Aug 2005 (25)
Jul 2005 (16)
Jun 2005 (17)
May 2005 (19)
Apr 2005 (20)
Mar 2005 (24)
Feb 2005 (23)
Jan 2005 (36)
Dec 2004 (40)
Nov 2004 (34)
Oct 2004 (17)
Sep 2004 (21)
Aug 2004 (59)
Jul 2004 (37)
Jun 2004 (31)
May 2004 (29)
Apr 2004 (52)
Mar 2004 (49)
Feb 2004 (49)
Jan 2004 (31)
Dec 2003 (48)
Nov 2003 (52)
Oct 2003 (29)
Sep 2003 (8)
Aug 2003 (5)
Jul 2003 (2)
Jun 2003 (2)
May 2003 (5)
Apr 2003 (2)
Mar 2003 (2)
Feb 2003 (3)
Jan 2003 (29)


 

A Penny Saved is More Than A Penny Earned

Contributed by mm | December 17, 2003 10:15 AM PST

A penny saved is a penny earned? That's inaccurate.

The reason: each saved penny is subject to various taxes, but each saved penny is yours to keep.

In the case of mine, each additional penny of my income is subject to Federal Income Tax (25% marginal rate) and Medicare Tax (1.45% flat rate). It is not subject to Social Security Tax because my regular income has maxed out the SS Tax limit ($87,000 for 2003). Therefore, $100 saved equals $135.96 of additional income ($100 / (1 - (25% + 1.45%))).

Moreover, if local sales tax is added (8.8% in my case), each saved $100 is worth $137.58 of additional income ($147.92 = $135.96 * 108.8%). This makes savings even more powerful.

More PFBlog Articles You Might Find Interesting ...


12/19/07 | Postcard from China: Things That Are Considerably More Expensive Here | (10)
12/15/07 | 110 Days on the Road, and Other Fun Travel Statistics in 2007 | (12)
12/08/07 | Magazines for Miles by Northwest WorldPerks | (5)
08/09/07 | Free Domestic Calling For Life | (6)
01/31/07 | My Mileage Program Strategy, Part I | (23)




Subscribe to Our RSS Feed:      Add to Google      Subscribe in Bloglines

This Post Has Received 1 Comment. Share Your Opinions Too.


Karthik Commented on March 2, 2005


ITYM .."each *earned* penny is subject..." in the beginning of your post.
----
The reason: each saved penny is subject to various taxes, but each saved penny is yours to keep.
----

Read More ... 73 Posts In The Same Category


12/19/07 | Postcard from China: Things That Are Considerably More Expensive Here | (10)
12/15/07 | 110 Days on the Road, and Other Fun Travel Statistics in 2007 | (12)
12/08/07 | Magazines for Miles by Northwest WorldPerks | (5)
08/09/07 | Free Domestic Calling For Life | (6)
01/31/07 | My Mileage Program Strategy, Part I | (23)
01/25/07 | TiVo Is Entering China! | (14)
11/07/05 | Group Life Insurance Not Always The Best | (5)
08/17/05 | Virgin Mobile Introduces Two More Rate Plans | (3)
08/02/05 | The Good and the Bad from My Trip | (5)
06/08/05 | Customer Service Tips for ReplayTV
05/28/05 | A Love-Hate Week With TiVo, Part 2 | (3)
05/27/05 | A Love-Hate Week With TiVo, Part 1 | (6)
02/17/05 | Now Medicare Is A Problem, Too | (1)
02/09/05 | Online DVD Rental: Netflix vs Blockbuster | (5)
02/02/05 | Amazon Prime: All-You-Can-Eat Express Shipping
12/25/04 | Want To Buy A TiVo? Get $20 Here
12/25/04 | TiVo: Cannot Be More Satisfied | (3)
12/18/04 | TiVo Ordered | (3)
12/17/04 | 2005: Should I Get A TiVo? | (9)
12/09/04 | Cheapest Health Insurance Found Out West | (1)
12/07/04 | Rip-Off Report
12/03/04 | Introducing Virgin Mobile's Annual Guarantee
11/30/04 | Benefits 2005, Part 5: Everything Else
11/20/04 | Benefits 2005, Part 4: Accidental Death and Dismemberment
11/16/04 | Coupon Mountain
11/16/04 | Customer Relationship Bonus From Northwest Airlines | (2)
11/15/04 | Benefits 2005, Part 2: Term Life Insurance | (1)
11/03/04 | $100 Fidelity Bonus for eBay Customers | (2)
10/02/04 | Vonage: Much Improved VOIP Technology (And Referral Deal) | (5)
09/07/04 | Time for Lotto?
08/22/04 | If You Miss Shipping Charges, You Miss Big | (1)
08/09/04 | MyRatePlan, A Good Data Compiler
07/29/04 | The Cost of Being Frugal
07/28/04 | A Closer Look at 2004 Sales-Tax-Free Holidays
07/02/04 | AuctionDrop Helps You to Sell at eBay
06/10/04 | PayPal Buyer Credit
05/23/04 | Dirt Cheap Magazine Subscriptions
04/29/04 | Vonage CFI Backfired
04/15/04 | Cancelling USAToday (CFI)
04/10/04 | Do Not Renew Magazines Thru Attached Leaflets | (2)
03/30/04 | Downgrading Comcast Cable (CFI)
03/09/04 | Gas Price Tracker
03/07/04 | Vonage's New Low Rate Plan (CFI)
02/24/04 | ExactChoice Study and Analysis
02/06/04 | VirtualBank Referral Deal
02/04/04 | ExactChoice.com - Buying Guide for Computers | (3)
01/28/04 | Opening eMoney Market Account at VirtualBank (CFI) | (2)
01/22/04 | Switching to Virgin Mobile
01/17/04 | ShareBuilder Visa Rebate Received
01/11/04 | Free Magazines from Northwest Airlines (CFI)
01/07/04 | Killing Verizon | (2)
01/03/04 | No Go for Flexible Spending Account - Dependent Care
12/31/03 | Finding Cheap Magazine Subscriptions | (1)
12/29/03 | AuctionSniper.com Wins You EBay Bids
12/22/03 | Clicker Shock: Travel Fees Can Be Hard To Figure
12/19/03 | Consumer Expenditure Survey
12/17/03 | Enrollment of Flexible Spending Account - Healthcare
12/15/03 | Exchange Gift Cards at CertificateSwap.com | (3)
12/05/03 | iShip.com Helps to Reduce Shipping Cost
12/03/03 | Stamps.com: Do They Really Want New Customers?
11/30/03 | Broadband Phone Service: Vonage and Others | (2)
11/28/03 | Selling Mileage for Cash | (1)
11/19/03 | Comparison Shopping: People Magazine Subscription | (1)
11/17/03 | Markup by Retailers | (2)
11/12/03 | Medical Insurance for Visiting Parents
11/03/03 | Clubphoto.com: Best-Value Online Photo Printing
10/22/03 | Desktop Purchase from Overstock.com
10/19/03 | Comparison-Shopping Tools Lure Travelers
10/04/03 | Upromise.com
09/25/03 | Cheap Long Distance Service | (2)
09/16/03 | Benefit from Promotions | (3)
08/22/03 | Cheap Gas - Arco and Safeway | (1)








This page was last rebuilt at January 27, 2014 07:54 AM PST.
  

RSS FEED





PERSONAL FINANCE BLOGS I READ

Consumerism Commentary
Get Rich Slowly
My Money Blog
All Financial Matters
The Simple Dollar

.
Error 500 - Internal server error

Error 500 - Internal server error

An internal server error has occured!
Please try again later.



Copyright 2003-2014, PFBlog.com. All Rights Reserved. (Privacy Policy)