Page 42 - Book1E

If we are running deeply into debt, we shall continue to run deeper into debt unless we change direction.
—Richard L. Evans
I have discovered the philosopher’s stone that turns everything into gold: it is, ‘Pay as you go.’
—John Randolph
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deductions that come out of everyone’s paycheck—Federal Income Tax, State Income Tax (this varies from state to state), Local Income Taxes, Social Security Tax, and Medicare Tax. Other deductions may include health insurance, life insurance, dental insurance, flex money or cafeteria plan, and 401(k) or other deductions for retirement. If your company offers an on-site cafeteria or fitness facility, those may also appear as deductions.
Your paycheck does not reflect what you earn, but what you take home. A job also often includes additional out-of-pocket expenses. These can include the gas it takes to get to work, parking, clothing purchases, dry cleaning expenses, lunch or snacks, coffee funds, water funds, or a
drink after work with associates from the office. All of these need to be deducted to determine what you can afford in addi- tional monthly payments every month.
Can you increase what you bring home? Can you reduce the amount of taxes deducted or the amount spent on discre- tionary items that are unnecessary and vol- untary? Have your FFEF credit counselor help you understand where you can reduce some of these deductions and increase what you earn.
Getting into debt often leads us to believe that we’re not making enough money. This can be a destructive mindset. The truth is, that is probably not the case at all. If you consider that many third-world citizens
live on less than $1 a day, you are probably making a lot of money. Try believing you make enough and then adapt to living within your means. FFEF credit counselors can help you create a budget that will allow you to do that.
Poor Cash Flow