As we head into year three of the coronavirus pandemic, many Americans are still experiencing financial hardship — and most have insufficient emergency funds. According to CNBC, 56% of Americans could not come up with $1,000 for an emergency if they had to, and to make matters worse, inflation rose to nearly 7% by the end of 2021, making many common goods and services harder on the wallet, according to the Bureau of Labor Statistics. At times like these, it’s more important than ever to focus on just how much income you take home from your paycheck so you can budget appropriately going forward.
Related: What You Actually Take Home From a $200K Salary in Every State
Read: States Where You’re Most and Least Likely To Live Paycheck to Paycheck
To that end, GOBankingRates analyzed the tax burden on a hypothetical $100,000 salary to find how much take-home pay varied by state. Data was analyzed for both single and married filers. Seven states have a tax burden as low as 16.13% for married filers: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming. The tax burden is highest for single filers in Oregon, coming in at 30.96% for single filers earning $100,000.
One good way to use this data during the current financial crisis is to divide your anticipated take-home pay into a usable budget. Most advisers suggest some variation of a 50/30/20 budget, in which 50% of your income goes to necessities, 30% is for discretionary items and 20% is for savings. In uncertain economic times, you can try to whittle down the 30% category and shift more toward your savings. You may also be able to negotiate the payments on some of your bills in the “necessity” category as well. For example, some credit card issuers may be willing to allow you to defer payments or interest for a month or more during the current crisis.
Your Money: Stay on Track With the Financial Stability Roadmap
More than anything, times of economic stress further emphasize the ongoing need for an emergency fund. As your finances begin to improve, try to tuck away more money than you’re used to for savings. In the meantime, divert any extra income you may have toward your emergency fund. Focus on your take-home pay when figuring out your budget throughout the current crisis and beyond.
