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5 Chilling Money Statistics to Ponder This Season

Halloween, personally one of my fav times of the year, brings us delightful get-togethers, pumpkin-carving extravaganzas, whimsically crafted costumes, and too much candy. 

But this spooky season, let’s dive into a different kind of scare: the chilling facts about money that can haunt us all… 👻

Today we are uncovering 4 scary facts about money today. We’ll explore the eerie statistics that can turn anyone into a financial ghost story. But fear not! We won’t leave you in the dark. 

Only Finance is here to equip you with the knowledge and strategies to avoid becoming a statistic yourself! 

This post is about four scary money statistics and provides ways to steer clear of them.

In today’s edition:

  • Financial Haunts Unearthed: Dive into 4 statistics about money in today’s world, and equip yourself with the knowledge to shield against these financial horrors.
  • Money Horror Story: Dive into the financial journey of a couple with a $280,000 yearly income, and uncover the BIG money mistake.Priceless Peep

🤫 Let’s fill you in on the secret

1: The Grim Reaper of Poor Savings 💰

In the world of finance, insufficient savings can be likened to the Grim Reaper, lurking and ready to strike.

I mean, think about it. Unexpected expenses can pop up at any moment. Like that time I had to pay a hefty medical bill, or when my car broke down on the highway (not fun). 

And honestly, who has an extra pile of cash lying around to tackle those things? 

Not many, according to a recent study by the Consumer Bureau of Financial Protection. Apparently, only 37% of Americans have saved up at least one month of income for emergencies. 

So, what happens if you’re in that unlucky majority? Well, you might have to go into debt, take out a loan, or do a hardship withdrawal from your retirement account (if you’re allowed to). 

But let me tell you, that last option can really jack up your future financial security. When you dip into your retirement savings, you’re essentially robbing from your future self and lowering the amount of funds available for your golden years. That’s not a risk I’m willing to take. And neither should you! 

So if you’re ready to start building up your emergency fund – I’ve got just the thing for you. Check out my free E-Book where I break down all the steps on how to get started. ✨💰💸

2 Yes, Borrowing Is The Most Expensive It’s Been In 23 Years 🤯

So it looks like borrowing costs have hit a pretty scary high, causing mortgage interest rates to shoot up to a spine-chilling 7.5%. The last time we saw rates like this was back in the day of the Dot-Com Bubble Burst. 

Bad news after bad news – I know…but there are ways to protect yourself from these financial horrors. If you’re in the market for a home, it might be a good time to review your plans and see if there are any alternative options available. 

Insider tip: Look into lower-cost loan products or even consider improving your credit score to snag a more favorable rate. Trust me, a little bit of extra effort can go a long way in saving you some cold hard cash! 💸💸

#3 Bankruptcies Are Up 😟

Both companies and individuals are filing for bankruptcy at alarmingly high rates in 2023. Yikes! 😳  It’s believed that this surge is due to a combination of increased debt over the past few years and a bumpy economy.

Some strategies people can use to avoid being in this position are: 

Reassess Your Budget and Get Savvy with Discretionary Spending: Take a look at your budget and see if you can tighten the purse strings on non-essentials. Trust me, making a few small adjustments to your discretionary spending can go a long way in keeping your financial ship afloat.

Make a Payment Plan: If you’re feeling overwhelmed by debt, create a payment plan to chip away at those balances. It’s all about breaking down the big scary chunk into more manageable pieces. 

Pay More Than the Minimum on Credit Cards: Those pesky credit card balances can creep up on you if you’re only paying the minimum each month. Try to pay more whenever possible to avoid being buried under that snowballing interest.

Tackle High-Interest Debt First: Prioritize paying off your high-interest debts before anything else. It’s like slaying the biggest, scariest monster in your financial realm. Once it’s out of the way, you’ll breathe a sigh of relief.

#4 The Best Days In The Market Tend To Happen When It’s Scariest To Be Investing… 👀

Let’s talk about the wild ride of the stock market and how it’s got people feeling a little jittery lately. I mean, I get it! Those ups and downs can make even the bravest of us want to stash our cash under the mattress. But here are some eye-opening facts to help put things into perspective.

Picture this: back in January 2003, imagine if you had $10,000 to invest. Now, if you had just left that money in the S&P 500 until the end of 2022, you’d be sitting pretty with a cool $64,844!* Not too shabby, huh?

But here’s the plot twist: if you missed out on the 10 best days in those 20 years, your returns would be slashed by more than 50%, leaving you with only $29,708. Seven of those top-performing days happened right smack in the middle of some bear markets in 2008 and 2020. 

So, what does this all mean? Well, it’s a reminder that trying to time the market can be a risky game. Sure, the fear of volatility can have us itching to bail and go all-in on cash, but history has shown that staying the course is often the wise move in the long run.

*Disclaimer: Past performance is not indicative of future results. Make sure to do your own research or seek professional advice before making any investment decisions.

📰 In the News:

The budget breakdown of a couple earning $280,000 a year, and their one ‘catastrophic’ money mistake

Ramit Sethi, the self-made money guru, recently uncovered a major financial blunder made by a high-earning couple.

In one of his latest newsletters, Sethi spilled the beans on a real-life couple pulling in a cool six figures – $280,000 to be exact. This dynamic duo, choosing to stay low-key, spilled the beans on their income, savings, investments, and how they spend their cash, all for Sethi to give it the rundown.

But here’s where things get wild: Sethi didn’t hold back on the shock factor. This couple was balling but had exactly zero stashed away in the savings or investments department. And that’s not all he spotted. The couple was dropping over $2,000 on their monthly ride, which, according to Sethi, was chill but definitely worth a second thought. He suggested they tone it down a notch and redirect that dough toward building up their savings and investments.

As all the money-savvy peeps, investing is like the cheat code for building your wealth.

Why? Well, investing means your money is out there doing the hustle for you, thanks to the magic of compounding interest. Your initial investment isn’t just making you money; it’s earning returns on the principal amount and all the interest it piles up. Over time, that means more dollars in your pocket. 💰💸

Sethi’s insights are a powerful reminder that smart money moves can set the stage for a worry-free financial future. 

Taylor’s Toolkit:

Many credit card holders don’t claim their rewards — here’s how they’re missing out on free money

I’ve got one more spine-tingling stat to drop on you… Not cashing in your rewards could mean waving goodbye to hundreds of bucks every year. 

Shockingly, nearly 25% of Americans haven’t cashed in their credit card rewards over the past year. Some folks were squirreling them away for a special splurge, while others felt their rewards were about as valuable as a ghostly apparition – or simply got spooked by the redemption process.

But lucky for you, I’ve got a nifty solution up my sleeve! 🎩✨ I’m also thrilled to be a co-founder of Savvy, the app that’s all about scoring savings on every single purchase. It’s become my trusty sidekick, and I pull it out every time I’m about to make a purchase to uncover all the deals and savings I can stack up.

 If you want to get the most bang for your hard-earned buck, head over to the App Store now and download Savvy. ✨💸

That’s it for this week!

I hope this week’s post gave you the motivation to start making some money moves to secure your financial future. You see, there’s a lot of bad financial news out there right now, but don’t let that scare you into inaction. We can always pivot and adapt to make sure we’re prepared for anything that comes our way.

So, as we head into the festive season, armed with these stats, I hope you’ll make small, practical steps that can make a real difference in your financial future. Because let’s be real – there’s nothing spookier than not being prepared for unexpected financial challenges.

This post delved into 4 alarming money statistics and provided insights on steering clear of them.

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5 Chilling Money Statistics to Ponder This Season

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Filing Taxes for the First Time? Here’s Everything You Need To Know

Are you in a bind because you’ve never filed a tax return before? And to top it off, you just learned that you’ll need to file one this year? April 15th:

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filing your taxes
Are you in a bind because you’ve never filed a tax return before? And to top it off, you just learned that you’ll need to file one this year?
 
April 15th: Tax Day always falls on that date, unless April 15 falls on a weekend or holiday. 
 
If you are filing your taxes for the first time, we have everything you need to know. And yes, we will be sharing how to file your taxes for free (or at a super low cost).

In this post, we are sharing everything you need to know if you are filing taxes for the first time.

A BEGINNERS GUIDE TO FILING TAXES

Essential tips for all you first-time filers out there ⬇️

Figure Out If You Have to File a Tax Return

To determine if you need to file a tax return, there are a few key factors to consider. 
 
In general, if your gross income in 2023 was at least $13,850, you’ll likely need to file a tax return in 2024.
 
Keep in mind that different rules apply to married individuals, older Americans, and heads of household. 
 
It’s important to note that even if you can be claimed as a dependent on someone else’s tax return, the $13,850 threshold still applies to you. 
 
If you are considered a dependent, you must file a return if you have accumulated at least $1,250 in “unearned” income, such as interest from investments.

Get Your Documents Together Early

 
Once you’ve determined that you need to file a tax return, it’s time to gather the necessary documents to complete it.
 
Here’s a list of essential documents to gather:
 
W-2: If you have a job, your employer is required to send you this form by the end of January. It provides details on your earnings for the previous year and the amount of tax withheld.
 
1099s: These forms report income that doesn’t come directly from a traditional employer. They include earnings from freelance work, “gig” pay, interest and dividend income, as well as income from third-party platforms like Venmo and PayPal.
 
Receipts: As a first-time taxpayer, it’s important to start keeping records of transactions that may need to be reported on your tax form. This includes income, expenses, and potential deductions. For example, keep track of any charitable donations you make or significant medical bills you incur.
 
By gathering these essential documents, you’ll be well-prepared to complete your tax return accurately and efficiently.

Gather Important Personal information

You’ll need the following personal information on hand to file taxes:
 
  • Social Security Number (SSN) or Taxpayer Identification Number
  • (TIN) for yourself and any dependents
  • Full name and date of birth for all individuals on your return.
  • Proof of identity with a valid photo ID
  • Bank account information, including your routing and account numbers, if you want to receive your tax refund via direct deposit.

Figure Out If Someone Can Claim You as a Dependent

 
It’s important to determine whether someone can claim you as a dependent, especially if you’re living with your parents or receiving any financial support from them.
 
According to TurboTax, parents can claim you as a dependent if you’re under 19 years of age, or under 24 and a full-time student, and they provide more than half of your financial support.
 
While parents can receive tax benefits by claiming you as a dependent, it’s also crucial for you to report this dependent status on your own tax return. 
 
Be sure to check with your parents and discuss whether they plan to claim you as a dependent and how it may affect your taxes. Always stay informed to ensure that you’re taking all the necessary steps towards financial success.

Figure Out If Someone Can Claim You as a Dependent

 
It’s important to determine whether someone can claim you as a dependent, especially if you’re living with your parents or receiving any financial support from them.
 
According to TurboTax, parents can claim you as a dependent if you’re under 19 years of age, or under 24 and a full-time student, and they provide more than half of your financial support.
 
While parents can receive tax benefits by claiming you as a dependent, it’s also crucial for you to report this dependent status on your own tax return. 
 
Be sure to check with your parents and discuss whether they plan to claim you as a dependent and how it may affect your taxes. Always stay informed to ensure that you’re taking all the necessary steps towards financial success.

Determine Your Tax Filing Status:

Here are the five primary filing statuses: 
 
  • Single: If you’re unmarried.  
  • Married (filing jointly): For married couples who want to combine their income on one return.
  • Married (filing separately): For married couples filing separately.
  • Head of household: For unmarried individuals who support dependents.
  • Qualifying widow/widower with dependent child: If you’re a surviving spouse with a dependent child. 
 
Include the appropriate filing status on your forms, when filing your taxes for the first time.

Find Out If You Qualify for Deductions or Credits

 
When it comes to taxes, deductions and credits can both help decrease your overall tax liability. Tax deductions work by reducing the amount of your income that is taxable while tax credits decrease the amount of tax you owe.
 
For first-time taxpayers, there are a few common deductions and credits that may apply:
 
  • The student loan interest deduction is one example of a deduction and can possibly result in a maximum deduction of $2,500 for the interest paid on student loans.
 
  • The American Opportunity Tax Credit is a credit that can be claimed by those individuals for whom no one can claim as a dependent, allowing for up to $2,500 credit for college expenses.
 
  • The Earned Income Tax Credit may be an option for individuals who earned a low income in 2023. It is essential to consult the IRS tables for information on how to qualify for this credit based on your income level.
 
  • Lifetime Learning Credit: A credit that helps cover the costs of post-secondary education, including tuition and related expenses, for eligible students. 
 
  • Educational expenses deduction: This deduction covers certain educational expenses. 
 
  • Home Energy Tax Credits: A credit for homeowners who make qualifying energy-efficient home upgrades.
 
  • Energy Efficient Home Improvement Credit: A credit for homeowners investing in energy-efficient home improvements. 
Deductions and credits can be a valuable tool when it comes to claiming your taxes.
 
Getting your taxable amount to the lowest possible is important if you want to pay less in taxes. It’s crucial to research which ones may apply to your situation and take advantage of them while preparing your tax return.

Decide if You Need Help

If you’re a first-time taxpayer, you have the option of either doing your own taxes or hiring a professional. 
 
Many Gen-Z individuals choose to do their own taxes, which is generally fine if your tax situation is straightforward.
 
By taking the DIY approach, you can potentially save money and complete your tax return quickly using tax software or the official IRS Free File program.
 
 Calculate your estimated Tax Return using Turbo Tax.

Completing Your Tax Filing

 
Once you’re prepared to file your taxes, it’s important to ensure the accuracy of your tax return. Take the time to review your personal information, income, deductions, and credits for any errors or omissions.
 
Online Filing: If you choose to file online, the platform you use will typically guide you through the process. Before proceeding from one page to the next, carefully verify the information provided for an easier filing experience.
 
 
Tax Professional Assistance: When working with a tax professional, they are responsible for reviewing their work. However, it’s crucial to provide them with accurate information from the start. If needed, ask for a walkthrough of your return to gain additional peace of mind.
 
Nonprofit Organization Assistance: If you’re seeking help from a nonprofit organization, you might be required to attend in-person sessions and bring all necessary documents. The organization will then assist you in submitting your tax return.
 
Paper Filing: If you opt for paper filing, complete all mandatory forms accurately, attach supporting documents, and send the package to the appropriate IRS address. Take the time to double-check everything before mailing your return, and remember to include a signed and dated copy.
 
It’s crucial to file your return by the tax deadline to avoid any late penalties. For the 2024 tax year, the deadline is April 15, 2024.

Pay the IRS if you owe taxes

After filing your taxes, you’ll either receive a tax refund or a notice of the amount you owe to the IRS. If you end up owing money, you’ll need to know how to pay what you owe.
 
You have a few options:
 
  • Use IRS Direct PayThis online service lets you pay your tax bill directly from your bank account. It’s a secure and convenient way to pay the IRS without any fees. 
  • Pay with a credit or debit card: You can pay your taxes using a credit or debit card through authorized payment processors, but this method includes fees. 
  • Pay in installments: If you can’t pay your tax bill in full, you may be eligible for an installment payment plan with the IRS. This allows you to pay your tax debt over time in manageable installments. 
Whichever method you choose, pay what you owe on time to avoid any penalties.

Common Tax Mistakes to Avoid For First-Time Filers

  • Misreporting any earned income
  • Not claiming qualified deductions or credits
  • Forgetting to sign and date your Tax return
  • Missing the date to file
  • Not keeping organized and accurate records.
  • Inaccurate Filing Status

This post was all about, everything you need to know before filing your taxes for the first time.

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