This old adage is not true! The reason is is
not true is due to the effect of marginal income taxes. Marginal
meaning the amount of tax you would pay on the next dollar you
earn. We have all experienced receiving a raise or a bonus only to
be disappointed with the size after taxes. Assuming a marginal tax
rate of 30%, you would need to earn an extra $142.86 to come out
with an extra $100 after taxes! Keep in mind that if you plan on
spending that $100 on an item with 8% sales tax, you could only
buy something that costs $92.60. To purchase an item that costs
$100 assuming 8% sales tax and 30% marginal tax rate, you would
need to earn an extra $154.29!
A $100 saved is worth at least $150 earned.
This fact adds to the power to using credit
counseling to lower your debt payments. By reducing your monthly
expenses up to several hundred dollars per month, debt
consolidation can offer a fresh start on the road to more healthy
personal finances. The most important benefit of consolidation is
that it can offer a fresh start on the road to a more healthy
financial situation.
A
Penny Saved is a Penny Earned