Payday—what a lovely day!
If you’re like most workers, you’ll receive two documents each time you get paid: the pay stub and the check. And we don’t blame you if you only pay attention to the check. In most cases, it’s the more interesting part.
But there are some crucial moments where the pay stubs are exactly what you need. So why should you keep those pay stubs handy? Here are five key reasons.
1. Moving Into a New Place
Whether you’re renting an apartment or trying to buy a home, you’ll likely be paying periodically over a long period of time. Because of this, you might be asked to provide proof of income.
Tax stubs are an easy source of this proof. This way, you can show a landlord or realtor that you can make the payments on time.
2. Pay Stubs for Filing Taxes
How much money do you make a month? What about after taxes or after deductions?
These are questions you’ll have to answer when you file your taxes, but you might not be able to come up with the exact numbers off the top of your head.
If you have your pay stubs handy, you won’t have to calculate this yourself. Everything will be recorded right on the paper (or screen). And you’ll be able to see how much you’ve been withholding for taxes throughout the year as well.
And don’t worry if you can’t find those pay stubs—you can use a pay stubs generator to calculate each step of your income and get accurate numbers for your taxes.
3. Protecting Yourself from Theft
If you don’t 100% trust your employer, you might want to hang on to your pay stubs to protect against wage theft.
It could also happen that you’re missing out on money due to an error in payroll. So whether your employer is intentionally trying to deny you your full paycheck or not, pay stubs can be a great way to set the record straight.
4. Applying for a Loan
Trying to get money for a degree? Or need to pay for a car? If you’re applying for a loan for any reason, the lender might ask to see your proof of income.
This is for the same reason you might need proof of income when renting an apartment. It’s a way of showing that you make enough money to do your payments on time. Pay stubs are a clear, easy way of accomplishing this.
5. Retirement Plans
Saving up so you can spend your golden years on the beach? When you’re saving for retirement, it can be hard to know how much to save and when. After all, this might be the longest-term financial plan you’ve ever made!
If you build retirement savings into your paycheck deductions, your pay stubs will help you keep track of how much you’ve been saving over the course of your career. The stub will show you each level of deductions, including your retirement savings.
Save Those Stubs!
Pay stubs might seem boring, but they can help you rent a home, do your taxes, and even figure out your retirement plans! So hang on to those little pieces of crucial information. Keep them in a drawer or a folder on your computer so you can access them without having to scrounge through your things when the moment comes.
And for more tips on living a savvy life, check out the rest of this site!