Financial Cookie Jar

If you are in a higher tax bracket, it is very important to plan your taxes, so you can find ways to pay fewer taxes and take advantage of generous personal allowances. Effective tax planning can help families to save hundreds of dollars each and every year.

Taking advantage of a personal allowance means that someone is able to pay less tax, meet rising household bills and save additional money for the future. The majority of tax breaks are in-place to encourage families to do just that.

Making adequate retirement provision is an important part of tax planning. Pension contributions are vital as they ensure that a senior has a sufficient retirement income.

Higher-rate tax payers enjoy significant tax relief; for every six hundred dollars contributed, one hundred goes into the pension pot. The percentage of a salary that can be contributed increases with age.

Inland Revenue rules permit people that do not work to pay up to three thousand six hundred dollars per annum into a stakeholder pension plan. This is an important part of tax planning for married couples, especially when only one person is a wage earner.

Once retirement age is reached, twenty five percent of the pension fund can be received without paying further taxation. It is also a good idea to open up an ISA, otherwise known as an individual savings account.

An Individual Savings Account allows individuals to save up to seven thousand two hundred dollars per annum. An ISA helps with tax planning as the returns are completely tax-free.

Married couples should utilize each of their respective ISA allowances and pay less tax than they would in a conventional savings account.

It is particularly important to contribute a sufficient amount in pension contributions in order to pay less tax and ensure an adequate retirement income. An Individual Savings Account is always preferred to a regular savings account because it allows savers to enjoy a tax-free income.

As you can see, there is no reason why you should have to suffer the consequences of overly high taxes due to your rate of income. Do some research today to see what you can do individually for your finances, to ensure that you are not going to be taken advantage of by the IRS.

Learning how to budget can be one of the most difficult things to learn. However, it is vitally important. Too many college aged students leave home to conquer the world on their own lacking in their ability to budget. Many of these students learn these budgeting skills the hard way because they do not know where to begin or do not have the self control necessary to stay within a budget. Here are a few tips on how to begin a budget:

1. Start by gathering every financial statement you possibly can. This includes bank statements, investment accounts, recent utility bills, and income statements. These statements will help you determine how much you should set aside for utilities and other expenses during the month. They will also help you know how much you have to spend during the month.
2. Divide your expenses into two different categories. These two categories should be fixed and variable. The fixed column should contain expenses such as rent, car payments, and other payments that will not change from month to month. The variable expense column should include thins such as gas, groceries, gifts, and other expenses that will vary from month to month.
3. Evaluate your total income vs. your total expenses. If your total expenses are greater than your total income, you will need to adjust your expenses to live within your income.
4. Review your budget monthly at the very least. This will help you stay on track and make small adjustments as needed.

Traveling by plane may be a lot faster, but it can also be a huge pain. The airport parking fees are horrendous. They are especially bad if you are going to be gone on a long vacation. However, you have asked around and no one can drive you to the airport. Even though it may look like there is nothing you can do but pay the horrendous fee, you still have many options that can save you money.

1. Park in an off-airport parking lot. If you can park here, you can take the free airport shuttles to the airport. While you will still have to pay a fee, the fee is usually much better priced than the fee associated with on-airport parking lots.
2. Reserve a spot earlier. Most airports will provide discounts and coupons to people who book their flight early.
3. Book through a hotel. Often hotels offer cheaper parking if you purchase a room package.
4. Park at a friend’s house. If a friend lives close to the airport, you may be able to park at their house and take a taxi to the airport for a price that is lower than parking at the airport.