Sharing Daily Discoveries About Personal Finance And Business Topics

Including Sales Tax In a Purchase Budget

You would think this is common sense but apparently it is a common issue that causes people to spend more money than anticipated. Basically, in most countries there are some kind of sales tax that is placed on top of the purchase price. Apparently, a lot of people neglect to factor that in which in turn causes them to spend more money.

A scenario would be like you have been saving up to buy this new $1000 item that you see on sale. So you save up to buy it. On the actual day when you go to make the purchase you realize it costs more because of the tax. Therefore, you technically went over budget. A more common scenario would be say you bringing in two dollars to buy a drink with the mindset that the price tag is only a dollar. When you go there though you didn’t remember that you are actually spending more because of the taxes. But, you make the purchase anyways.

Kind of an interesting thought as this isn’t something that I thought would be such a huge deal. It is true for myself that I always factor in the taxes though.

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