Millennials have had a rough road when it comes to money. Not only did they come of age during the Great Recession, which made jobs scarce and benefits even scarcer, but many saw their parents lose big time in the stock or real estate markets, which scared them off of making their own investments. Still, there’s no more time for excuses, because millennials are all grown up and taking on increasing amounts of responsibility. From mortgages and parenthood to caring for aging parents, millennials are facing big financial milestones, whether they’re ready or not.
According to Bank of America’s Year-End Millennial Snapshot, which analyzed 2015 data from over 3,500 millennials, this young cohort of 20- and early 30-somethings continues to struggle financially: a tough job market, hesitancy to invest and student loans are just a few of the challenges in their way to prosperity. Still, the data suggest they are firmly committed to achieving financial independence one day. About half of millennials said the Great Recession changed the way they think about saving, investing and spending, with 40 percent saying they are
On the list of things you hate, somewhere in there is probably learning that something you didn’t think you had to pay tax on, you do.
Any money that comes into your life can be taxable, says San Diego-based tax attorney Sam Brotman.
“Technically, under Internal Revenue Code Section 62, the IRS can find a way to tax almost every way of receiving money … Even finding $20 on the street would be considered taxable, and the IRS would want their fair share of the money that you receive,” he says.
On a practical note, Brotman says most people don’t report that $20 bill, and “the reality of the situation also is that the IRS does not have enough enforcement resources to come after people who forget to declare little items on their return. It would cost them more to come after those people than they would get in tax revenue for the government.”
Still, $10 you won from a lottery ticket and $1,000 in winnings is another story. If you want a heads up on what unusual monetary situations are taxable, and what you should be
Being financially literate, or understanding all aspects of your financial life, is crucial to becoming confident about money. But often, we’re too embarrassed or uncomfortable to talk about money openly.
According to a 2013 Wells Fargo survey of over 1,000 adults, 44 percent of respondents said “personal finances” is the hardest topic to discuss with others, followed by “death” at 38 percent and “politics” at 35 percent.
Money topics such as debt, student loans, salary, credit scores and even saving for the future can cause paralyzing anxiety. A 2014 National Foundation for Credit Counseling study on financial literacy showed that only 2 in 5 adults believe that, if their money could talk, it would say. “We’ve been a successful team.”
So to help improve your relationship with your money, we’ve raised 10 potentially embarrassing money topics and offered some suggestions to tackle them with confidence.
1. Spending well above your means. Though keeping up with the Joneses feels like a problem we should have grown out of in high school, we are all guilty of this from time to time. Insisting on paying for dinner out with that friend who makes twice what you do so