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Tag Archives: earning extra money

Dangers of Earning Extra Money

taxes, lifestyle inflation, and extra time

      When searching for ways to pay of debt, build an emergency fund, or save for a major purchase, anyone will tell you that earning extra money is the fastest way to accomplish those goals. Increasing my income was one of the ways we were able to pay off massive credit card debt a few years ago. While the overall benefits more than outweigh any potential negatives, there are a few dangers to look out for when making extra money. Hopefully you can avoid those ¬†pitfalls to make sure that all extra income is serving its purpose. Taxes Unless you take on a traditional job for extra money, income earned from side hustles is usually paid without any tax withholdings. That means that you’re responsible for Medicare, Social Security, and income taxes. It might be tempting to go ahead and use your new found money right away, but remember that a tax bill is coming up. If you’re new at earning extra income, you should save about 30 percent for taxes. After the first year, if you continue to pull in side income, you’ll need to set up estimated quarterly payments to Uncle Sam and to your state ...

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The Six Biggest Lessons I Learned While Paying Off My Debt

Paying off debt lessons

This is a post from Richard at Frugality Magazine. Enjoy! Just before Christmas last year I reached the point of having paid off all my consumer debt – a situation that seemed insurmountable just a few short years before. When I finally accepted by debt problem – something that took far longer than it should have done – and decided I needed to shift the weight of growing interest and spending every available penny on repayments I examined every available option. What about debt consolidation? Or an IVA? Or even bankruptcy? I just couldn’t see a way that I was going to pay off the mountain of money that I owed while keeping up with even my most basic of living expenses. But you know what? After some serious consideration I opted to avoid all these potential “short cuts”. I just decided to knuckle down, become more frugal, cut my living expenses and pile the extra cash into my debt. In other words I did it the plain old boring way. The *reason* was simple – my debt was painful but I wanted to fully meet all the agreements I’d made with my creditors (a moral argument) and I also ...

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Avoiding the Impluse Buy: How to Buy New Stuff After Getting Out of Debt

Being in debt pay off mode can be a bit isolating. When you are serious about a goal like getting out of credit card debt, you don’t allow yourself to spend money on things that aren’t necessities. If you stick to your goal, it sometimes takes a long time to get rid of the debt, but it does happen. In our house, it took about two years. During that time, we got used to not spending. It was a good experience and taught us that we don’t need to buy things all the time. Impulse buying was one thing that got us in trouble in the first place. However, through normal wear and tear, household items do wear out or become obsolete. Now that all our debt outside of mortgages is paid off, it’s time to buy a few things for the house, but it’s scary. Since you have to get back on the horse at some point, I’ll share how we are deciding to make purchases after getting out of debt. What Do We Need and Why? There is actually a list of things we need or don’t really need, but feel they will add value to our lives. ...

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