1. WHERE DOES THE MONEY GO? A Lesson in Adulthood

2. Step 1: Let’s Take Out Federal Income Tax  If you will make $9, 075-$36,900  Subtract 9,075 from your income  Multiply remainder by.15  Add $907.50 to that number. This is total is your tax.    EX: 30,000-9,075= 20,925  20,925x0.15= 3,138.75  3,138.75+907.50= 4,046.25

3. Federal Income Tax  If you will make $39,900.01-$89,350  Subtract 36,900 from your income  Multiply remainder by.25  Add $5,081.25 to that number. This is total is your tax.    EX: 75,000-36,900= 38,100  38,100x0.25= 9,525  9,525+5081.25= 14,606.25

4. Federal Income Tax  If you will make $89,350.01-$186,350  Subtract $89350 from your income  Multiply remainder by.28  Add $18,193.75 to that number. This is total is your tax.    EX: 150,000-89,350= 60,650  60,650x0.28= 16,982  16,982+18,193.75= 35,175.75

5. You’re not done. Go to step 2: State tax!  If you will make $25,000-$49,999.99  Multiply your original income (not after federal tax amount) by.0336  Add $691.00 to that number. This is total is your state tax.    EX: 40,000x0.336= 1,344  1,344+691= 2,035

6. State tax!  $50,000-$149,999.99  Multiply your original income (not after federal tax amount) by.0424  Add $1,531 to that number. This is total is your state tax.    EX: 70,000x0.0424= 2,968  2,968+1,531= 4,499

7. Still not done! Have to pay for the old people! Go to Step 3: Social Security  Multiply your original income by 0.062. This is your total social security contribution    EX: 60,000x0.062= 3,720

8. Now, let’s see the money you put in your wallet…  Add federal taxes, state taxes, and social security. These are your total required deductions.  Subtract that number from your income  The result is you NET yearly pay  EX: For 50,000  FED= 8,356.25 + STATE= 3,651+ SS= 3,100  Taxes together = 15,107.25  NET: 50,000-15,107.25 = 34,892.75

9. Insurance/Retirement  Health Insurance  Obamacare is typically $100-$200 per month Depends on how much you make…  Employer Health Insurance For an individual can be $200-$400 out of your check. 34,892.75-2,400=32,492.75 ($200 p/mo.)  401K/Pension  A 401K is a savings plan for retirement. Sometimes your employer will contribute or match your contribution. You can decide how much to put in, up to typically 10% of your annual salary, it depends … 32,492.75-1,200= 31,292.75 ($100 p/mo.)  Pension If you work for the government, you put money from your current check into a pension fund. It is typically 11-13% 50,000x0.12= 6,000

10. Now, Lets See What You Make Per Month  Divide your NET yearly pay by 12.  This is what you have to live on each month.  EX (For 50,000)  31,292.75/12= 2607.73

11. Sounds pretty good, huh? Now let’s look at expenses.  Though the total check amount MAY look good compared to what you are currently used to, let’s spend some time on what you HAVE to spend to live and see what’s left.

12. Place to Live:  Subtract the monthly rental amount from your monthly income  EX: 2,607.73/3= $870  $2607.73-870= 1737  Subtract about $150 for cable and internet  Subtract about $150 for electricity and water  Subtract you cell phone bill (figure about $50 if you aren’t sure)  What do you have left?    1737-150=1587, -150=1437, -50= 1387

13. What about student loans?  For every $10,000 in student loans, expect to pay about $110 per month FOR TEN YEARS  Example: $40,000 in student loans = $440 per month FOR TEN YEARS That $40,000 dollar loan will cost you about 53,000  ASU/UofA = approx. $12,000 p/yr (x5=60,000)  60,000 = 660 p/mo.  1387-660= 727

14. What now?  Go up front and get the amount of “money” you had left after all of those deductions.

15.  Car payment  250-500 727-200=527  Car insurance  100-150 527-100=427  Gas  100-300 427-100=327  Renter’s insurance  15 327-15=312  Car maintenance  0-2,000  Groceries (Food, toiletries, and household products)  200-400 312-200=121  Pet related costs  20 121-20= 101 Time to pay the bills! How’s it looking so far? As we go through each of these, subtract the amounts we decide are appropriate from your salary.

16. More bills…  Gym membership?  Haircuts?  Clothing?  Netflix, Hulu, Amazon Prime?  Travel?  Eating out?  Movies/entertainment?  Starbucks?  Books?  Anything else?

17. Any left to put in savings?????  Welcome to adulthood. Yes, it kinda sucks.  Remember that college graduates make $1,000,000 more in their lifetime. Getting scholarships to help pay for college, will decrease your monthly bills (school loans). Writing excellent personal statements will help you earn scholarships…