Tax Cut Agreement Could Help Atlanta Workers Lower Debt
What would you do with an extra $1,000 or more a year? You might be about to find out.
Part of the tax plan between President Obama and Congressional Republicans includes a 2 percent cut in Social Security payroll taxes. So if you're making $60,000 annually, for instance, you'll get to keep an additional $1,200 of your income each year. In the great scheme of things, it might seem like a fairly insignificant amount - but it depends on how you use it, say Atlanta bankruptcy attorneys.
If you're not paying attention, what works out to about 25 bucks a week can just sort of disappear. Maybe it will go to some extra impulse buys at the grocery store or maybe it will sneakily find its way into the cash register at your local Starbucks. But the point is, it will be gone.
But what if you made an effort to really make that money count? What if you forced yourself to save any extra money that comes your way as a result of the tax break, so that instead of looking like just 25 bucks a week, your tax cut starts adding up to $50, $100, $500, etc? All of a sudden, it seems like enough to make a difference.
If unexpected circumstances make it hard to pay the mortgage one month, you'll have some backup money. Thinking about canceling your cable? Your tax cut can keep paying for the luxury of your TV shows - then again, you can cancel cable anyway and have twice as much extra money a month. But if you really want to maximize the effect of your tax savings, apply it to your debt.
Let's imagine that you put $1,200 towards a $6,000 credit card debt. Now you're paying 20 percent less interest each month because your balance has dropped to $4,800. Your minimum payments should be lower as well, meaning it will be easier to pay more than the minimum, further lowering interest. And suddenly 25 bucks a month isn't looking so shabby. Of course, if you really want to reduce debt - or if your debt is so high that no tax cut can help you - there's a better solution. The right bankruptcy plan can provide an affordable way to start chipping away at debt while legally protecting your assets. It's free to find out if bankruptcy is right for you when you try a complimentary one-on-one debt analysis with an Atlanta bankruptcy attorney.