So, In Step One we looked at How To Get The Most Out of Your Current Savings. This is the concept of not leaving available money on the table.   And, while we don’t want to leave money on the table – Guess what?  We also don’t want to pay more taxes than we owe.  What I am showing you here is completely up to you, but I would suggest that you stop giving the government an interest free loan.  That money should go into your new found High Interest Checking Account, right?   You want your money working for who?  You…

Step 2. Don’t Withhold More Taxes Than You Owe

I used to look forward to that reliable tax refund check at the end of the year.  Many of us intentionally have more taxes withheld than we owe to avoid an inconvenient tax bill at the end of the year.  However, those excess withholdings could be earning you interest .  When you start to earn enough interest on your savings, you can buy whatever it is you would have bought with that tax refund anyway.

Action Step 2: Check out the IRS’ Withholding Calculator Figure out your correct tax.  Adjust your withholdings with your employer or CPA.  Now that that extra savings and put it into your new high interest checking account.

In Savings Habit 3 we will look at something very interesting: the concept of using cash versus credit cards to pay for discretionary items.

Related posts:

1. 4 Savings Habits To Increase Your Savings – Savings Habit 1 Getting The Most Out Of Your Current Savings
2. 4 Savings Habits To Increase Your Savings – Savings Habit 4 – Avoid All Unnecessary and Late Fees
3. 4 Habits To Increase Your Savings – Habit 3 Use Cash for Discretionary Purchases
4. How To Increase Your Yield by 45% With Tax-Deferred Annuities
5. 5 Steps To Achieve Financial Independence, Step 3 – Accelerate Your Savings