Have you ever heard the saying that a dollar saved is two dollars earned? Do you know exactly what it literally means? It all works down to personal finance basics and becoming familiar with tips on budgeting. Part of growing to be successful financially is finding out how to become proficient with precisely how you earn and spend cash. Why don't we take a closer look as to how a dollar saved is two dollars earned:

If you were to be paid $75, 000 annually in Ontario, Canada, here's where your next earned dollar would go.

Marginal tax rate35.39%

CPP/EI premiums 4.95%

Pension contributions 6.00%

Union dues 1.28%

Total 47.62%

So this should mean if you were to bring in $1.00, more than 47 cents would go toward expenses. To be able to save one entire dollar you'd need to make $1.91. That is very close to two dollars earned.

I realize that not all people will have monthly pension contributions or union dues but I wanted to offer an model that was similar to my particular scenario. If you're an American then you'll have Social Security and Medicare in lieu of CPP and EI in Canada.

Saving a dollar rather then making two could seem sensible for most people out there. For countless people cutting back on entertainment or unneeded things is far easier than heading out and making more. The progressive tax system in the western world can make it rather challenging to get ahead only by increasing your earned earnings. A good savings plan combined with keeping with tips on budgeting is just simple personal finance basics.

With these tips on budgeting you can find out how saving one dollar is basically the same as earning two dollars. You would need to earn $1.91 if you want to be able to save one full dollar, which prompts the phrase "A dollar saved is two dollars earned." Think about this scenario when deciding to put in more overtime to pay for your entertainment. It can cost you more than you can believe; obviously it is extremely inefficient.

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