Monday Is Tax Freedom Day – How Many Days Do You Work For Other Items In Your Budget?

by Hank Coleman

Monday is “Tax Freedom Day”.  The average American tax payer, if there is such a creature, pays approximately 28% in income tax.  With 365 days in the year, that works out to 103 days out of each year that we all work at our jobs just to pay for our taxes.  These calculations come from the Tax Foundation, a tax education group. 

So, I began thinking about how long it takes for me to “pay” for certain items in my household budget.  For example, I work about eight days out of each month to earn enough money pay for my mortgage.  So, if I get paid about $100 a day after taxes and my electric bill is approximately $800 a month, then that is where I would get the eight days a month calculation.  Make sense? 

So, a monthly budget looks something like….

Taxes        
Mortgage                              
Insurance (Life & Car)       
Car Payments                      
Gas                                        
Retirement Savings            
College Savings                 
Cable Bill                              
Cell Phone Bill                    
Groceries                              
Eating Out                
TOTAL                       
7 days
8 days
1.5 days
4 days
1 day
4 days
1.5 days
0.5 days
1 day
1 days
0.5 days
29 days

 

FYI….the $100 a day was an example.  My take home pay, like yours, will be a little different, and each of our calculations will be a little different.  But, I actually like this exercise because it shows you in a little different format where your money goes and where you may need to curb spending.  Do you really need to save so much when you have a lot of debt to pay off? 

So, I have 29 days that I have to work during the month so I can use the last two days in order to earn fun things like going to the movies, saving for vacations, etc.  I think I am depressed now.  I really hate February too.  Talk about a month with not enough days in it!  If it isn’t a leap year, then I’m in the red for the month!

Has anyone else ever thought about the expenses in their lives in this way?

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{ 1 comment… read it below or add one }

The Weakonomist April 12, 2009 at 9:44 pm

I like the idea of a tax freedom day. Very interesting. I tend to avoid doing the kind of math you talk about though because the results will only depress me. I try not to think of my job as a method to create the money for the things I pay for. Instead I try to think of my job as simply an excuse to leave the house!

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