Money Tips Daily By Charles Kelly, Former Ifa And Author Of Yes, Money Can Buy You Happiness.

Welcome to Money Tips Daily. A Penny Saved is a Penny Earned is a saying attributed to Benjamin Franklin, although what he actually wrote was “a penny saved is two pence clear”. We get the picture, saving a penny is as valuable as going out and earning the same amount. Is that still true? Well, yes and no. In Franklin’s day, there was probably no direct income tax, but nowadays to receive a penny in your hand, net after tax, you probably need to earn at least half as much or double before tax (gross) depending on your individual tax rate. Don’t forget that we also pay indirect taxes such as VAT and tax on our homes, and there are the costs of going out to work such as travel, parking, clothing and lunches. Ok, for sake of this example and to keep the maths simple let’s say you need to earn two pence to end up with one in your hand, and let’s update the penny from 1736 penny to £100 today. If you can save £100 it is equivalent to earning £200 by go