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Gene Mundt's Blog

By Gene Mundt | Mortgage Broker
or Lender in 60451

Ch .. Ch .. Ch ... Changes. What the '2011' Tax Cuts Can Mean for You


    As a Mortgage Banker at Chicago Bancorp, I obviously have a chance to view many credit reports and are a part of many financial and credit-related conversations.  Add the fact that I'm also an IL Certified Financial Planner ... and the number of financial-related conversations I have becomes pretty staggering.  Needless to say, I have an opportunity to see first-hand just how decisions regarding the act of saviGene Mundt CBC 2011 Tax Cut Postng or paying bills, both small and large, impact the financial and credit standings of my clients.

    Because of the recent tax cut/decisions made by Congress, what many Americans will reap on their paychecks will change in 2011.  Now , let me point out ... I'm not here to argue or debate whether this recent vote was right or wrong ... so please, let's move past that and focus on the positive points I wish to make here in this post.  

What I'm hoping to showcase and highlight here is this ... Should you see extra monies coming your way in 2011 ... how do you plan on utilizing it? 

    It's time to do some PLANNING for these dollars!  Whether large or small, these extra dollars CAN make a difference to you if they are applied and implemented in the right way.  To prove that to you, I've included the tools below.  I think you'll be pleasantly surprised should you do some investigating with your own dollars. 

    To view what changes may be in store for your personal paychecks, you can go to the following website:  http://www.kiplinger.com/tools/2011_Social_Security_payroll_tax_cut_calculator.  

Just as somewhat of a guideline though, here are some preliminary numbers to consider: (Based on the 2011 tax cut, a bi-weekly form of pay, prior to any monies being contributed elsewhere ... such as insurance/medical contributions, child care, or etc.)

At a  $50,000 Yearly Salary ... your checks will see an $38 increase/per paycheck

At a  $75,000 Yearly Salary ... your checks will see an $57 increase/per paycheck

At a $100,000 Yearly Salary ... your checks will see an $76 increase/per paycheck

After $106,800 in Yearly Salary ... additional calculations apply. 

But after you find out what amount of dollars may be coming your way, then what?  Consider options you have moving forward with this money.  Again, applying a little forethought and making plans NOW may pay huge dividends for you later as you actually start realizing this pay "increase".  Let's consider some easy options you have.Gene Mundt CBC 2011 Tax Cut Post - Budgeting

To see how applying your newly-realized paycheck increase could effect paying down your credit card balances, go to the handy Credit Card Calculator installed for your benefit on my website:  http://www.genemundt.com/Credit-Card-Calculator.html.  It's pretty mind-boggling to see what benefit even a small amount of extra dollars applied to balances monthly can do. This also can have a real impact on your credit scores.  Thinking of buying or refinancing in the future?  GREAT idea to apply those savings here!

  Placing extra monies (in addition to) the regular monthly mortgage payments made can be a very tricky thing to calculate benefits of.  There is no doubt that you will payoff the mortgage earlier and save dollars.  But figuring that benefit and comparing it to placing the monies elsewhere ... not as easy.  I recommend utilizing the services of a financial planner for weighing those options.  However, should you wish to see what dollar amounts would be involved for you when taking this action ... please go to:  http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx

  Do you have a 401(k) Savings set-up for retirement benefits?  Play with some differing numbers using the following 401(k) Savings Calculator.  Again, you'll see the old saying applies ... "A little bit goes a long way".  http://www.bloomberg.com/personal-finance/calculators/401k

 Gene Mundt Chicago Bancorp '2011' Tax Cut Blog Have a child's savings account earmarked for college tuition?  I can tell you from personal experience gained when saving for our two boys' college years ... these savings can really end-up making a huge impact on their college (and after) lives.  Plus, from a lender's viewpoint I can tell you, college loan debt is becoming a real albatross around the necks of our college graduates.  Saving now can cut down on the amount needing to be borrowed later.  Thank you Mom and Dad! 



(But a tip here to parents and contributors to a child's savings:  Include the child in this savings plan.  Make sure the child takes part and see the importance of this action.  Show them the monies building up in their account.  Develop and nurture a "savings attitude" in them.  That attitude will payoff for them the rest of their lives.) 

View how balances can differ in your regular savings account too.  You don't need to be taking part in special accounts to make a big impact.  See what happens if you add even a little bit more to your regular savings account from each paycheck through this new tax cut ... http://www.bankrate.com/calculators/savings/simple-savings-calculator.aspx.  Real Savings!  Getting excited now?

What may appear and be scoffed at as a minor "blip" in your finances, can actually be quite major in its effect.  Use these calculators found here to see just what good this money can possibly mean to your present life ... your savings in a myriad of ways ... your children and their future ... your retirement.   

Plan now.  Map out your goals.  Take charge now.  Otherwise you run the risk of doing nothing and seeing and reaping no change ... no return ... and squandering it. 


*  Should you need additional tools or guidance, please do not hesitate to seek out that help.  As always, I am available and happy to provide that information, guidance, and assistance.

Comments

By Linda Kemp,  Wed Jan 5 2011, 17:58
Great post Gene! I love your sense of humor as well!

Linda
By Gene Mundt,  Wed Jan 5 2011, 18:43
Thank you Linda. I posted this on AR as well. Hope it proves beneficial to those that read it ... and entertaining as well??? lol
Hope to see you soon ...
Gene

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