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Pro tip: I read a blog post about setting aside 40% of every check for taxes and it saved me from a huge headache this quarter.
I was looking up tax stuff online last month and found this article by a freelance writer who said she puts 40% of every single payment into a separate savings account right away. I used to just guess and hope I had enough when taxes were due, which led to some tight months. So I started doing it with my last three projects, which totaled about $5,200. Just got my quarterly estimated tax bill, and for the first time ever, I had the money sitting there ready to go with some left over. It felt amazing not to scramble. The article said the percentage might change based on your state and deductions, but starting high is safer. How do you all handle setting money aside for taxes? Do you use a specific percentage or a different system?
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jennybailey6mo ago
Oh that's smart! I actually round up to the nearest hundred when I transfer, so any leftover change becomes a nice little bonus fund.
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ninataylor6mo ago
My old credit union had a round up feature that saved $40 a month without me feeling it. I switched to manually rounding to the nearest fifty on my main checking account transfers. It builds up faster than you'd expect for random treats or a small emergency. The key is putting that bonus fund in a separate spot so you don't just spend it.
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jenny426mo ago
Where do you keep that separate fund, a savings account?
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anthony_jackson315mo ago
My bank tried that round up thing and I found it just made me spend more. Seeing that extra cash in a separate account felt like free money, so I'd dip into it for dumb stuff. I keep all my cash in one checking account now because if I see the real total, I'm less likely to waste it. What did you end up buying with your bonus fund?
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