100 Words On: Why a Penny Saved Is More Than a Penny Earned

I think it was the Quaker Oats guy who famously declared that a penny saved is a penny earned. However, because of taxes, a penny saved is actually worth more than a penny earned. To illustrate, if you happen to be in the 10% tax bracket, every taxed dollar you earn is worth only $0.90; tack on FICA, state and other taxes and it’s worth even less.

The bottom line: Although striving to continually increase your income should always be your first goal, finding ways to save by cutting your spending is actually more cost effective than earning money.

Photo Credit: stevendepolo

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