I can't help but wonder if our auto fuel will go down this month. I filled up 17 gallons for $50 yesterday, which really wasn't horrid. (It's been worse). & I thought I could probably get away filling up once more this month. Dh does not to the preschool drive any more so should save him a tank. Plus no San Jose drives planned which will save 2-3 tanks over the last 2 months. I think he'll fill up twice which will put us at $160 for the month. Maybe $210 for a 3rd fill up at the end (not sure I can really make it to the first on 2 tanks). But we have been spending $300, so this is very preferable.

I also saw that post on driving for better gas mileage. My dh thought I was getting worse gas mileage than him and I rolled my eyes. I said since I drive to preschool and sit at a line of lights to get there, of course I get worse gas mileage. We generally don't do a lot of city driving otherwise. Freeway and little traffic, or just quick jaunts down the street.

Anyway, but I do have a bit of a lead foot in a sense and so I did think about it. I did try to drive really calm yesterday and cruise at 65 on the freeway. I have found setting the cruise at a slightly lower speed helps the gas mileage (in the past). Anyway, I couldn't set it any lower lest I get run over.

I was wary since the drivers around here are SO BAD. Our auto insurance doubled when we moved here and I quickly saw why. We used to pay $200/year each for perfect driving records. Now we both pay $400/year for the same thing. Blech. But god forbid you get in someone's way!!!! I mean I moved from the BIG city and so it was kind of a surprise. There are a lot of traffic issues here, and hence a lot more road rage. So I thought driving calmly might prove to be scary. It was okay, but I did see quite a few people make a point to zoom past me with a red light up ahead. Of course that might have been me last week. LOL. I am not going to do that anymore.

Well, making a bit of a game of it for now. My goal will be to only spend $100 on gas this month. It's pretty aggressive, but I'll try. At least stay as close to that as possible. Of course dh might get through the month with only one fill up of $30 (he has a much smaller tank). He has been getting out more, but most the stuff he does is quite local. Driving to work is what costs us more gas than anything. It's not a long drive; it just adds up, going there every day and all...

I have to add I am not feeling much pinch. I always leave a lot of room in my budget for things like gas and groceries. I was thinking future inflation (or gouging). As far as groceries, we have cut our bills 20% but I still leave the old budget. IT's a big round easy # to remember, and no doubt as the kids grow they will EAT more. My point being, when you do a budget, try to think down the road a bit more. Makes it easier to weather rising prices. We cut out diapers, formula, lots of milk, etc. this last year. But the kids also eat at preschool twice a week. So I leave that old big budget in place for when we have to feed them every meal again. They can eat A LOT now but I understand this will get much worse when they are teens. LOL. Luckily, have a long while to prepare for that.

Of course I have never been too wrapped up in "today" when it comes to my finances. I am always planning ahead, and it really helps. Of course I feel like I am still recovering from our medical insurance premiums. Those came out of left field and I was lucky to get some decent raises to cover them. This is the first year, since kids, that the increase wasn't astronomical (like 20-40%). So I am enjoying that (enjoying that they only went up 7% - how sad), but knowing it is better to prepare for what I know since often there is a lot you just can't foresee. I Feel like we may be getting this under control, but what's next? Likewise, a little gas or grocery increase doesn't scare me. More to the point, that's nothing compared to what we have been dealing with these last few years. Phew.

Which reminds me, they recommend full fat milk the first year, or something, after formula. Then 2%. Anyway, we have been buying less non-fat milk for us and I have just been taking to drinking the kids' milk (easier). Dh refuses to drink it (which is funny because he needs the fat. He is such a stick). & anyway, I was mentioning the other day. I said it probably wouldn't kill us just to switch to all non-fat and bulk up on sale, etc. I said we could add fat to the kids' diets other ways, I think they will survive.

Anyway, the non-fat was on sale for 60 cents cheaper than the 2% so dh switched when he went to the store yesterday. I have the feeling in the interim we'll drink whatever is cheaper. The kids and I really have no preference. I just worried because I resisted to switching to non-fat for SO long. I didn't want to get spoiled by the good stuff. Hehe. So far I think I am okay. I drink so little milk as a whole.

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I was pondering what the average payoff date is on a mortgage. I mean, in reference to age. What is the average age Americans pay off their mortgage? I was kind of curious but google did not shed much light on this question. I guess but show that more and more and more people are paying off their mortgages, well into retirement. (Or likewise, never pay off their mortgage).

My only frame of reference is our parents. They both paid them off when their eldest child turn 28. Interesting. Dh's parents are much older so put them in the 55-60 range for payoff. The funny thing is is we never prepay a dime, our mortgage will be paid when our eldest turns 28. No, we didn't plan it that way!

Which takes me to why I wondered in the first place. I am looking forward to refi-ing for a lower interest rate. I have no urge to stretch my loan out longer though. We would prepay the difference, keeping our old mortgage payment in the end. But enjoying the faster payoff with the lower interest rate. 'Tis the point.

Anyway, on these forums and in real life the reaction to an idea of refi is funny. I guess since the norm is to drag out the loan as long as possible and borrow more against it, those are the assumptions people make when they hear refi. Of course, knowing I am staunchly opposed to prepaying mortgage payments TODAY, I think that is much misunderstood.

Um, my goal is to pay off my mortgage at age 45! Likewise, I don't get the lure of extending it forever. But just because it doesn't make sense for us to send in prepayments right now, in no way shape or form means I am against paying off a mortgage.

So I wondered when the average age is. I figured 45 would be rather on the young side. I am starting to think being on the current track to 55 is most definitely on the young side. I just wanted to be clear I have no desire to have a mortgage in retirement. In fact we intend to pay of our mortgage WELL before retirement. But with youth on our side we really have the luxury to do both. To put the mortgage on the back burner for now, focus on our investments, and still pay it off quite young. So I am not inherently against prepaying a mortgage (not considering all the prepayments we will make in our life - and the ones we made when we had more means). I am also not against putting it on the back burner when it makes sense. As usual I fall rather square in the middle. There are benefits to both. In fact, we discuss dividing dh' future wage 50% to mortgage and 50% to investing. A lot of the benefit of investing is lost in that situation since our tax-deferred investments should all be maxed out on my income, by that point, and the rules change when you talk taxable investments. We could pretty much flip a coin, and decided we'd do both 50/50 for a while. & go from there. See what we were enjoying more, or if we should just hedge our bets by doing both. That's more how we do things. We aren't very "either/or," as a whole.

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I decided my $11500 ROTH conversion cost us $2600 in taxes. Bummer. I also double checked once again, but I think my withholding is really okay. Even with all the balance transfer interest, without the ROTHS, we would have been quite breakeven for the year. So I will leave my withholding as is.

Our effective tax rate in 2007, even with an extra $11,500 in taxable income, was 9% federal and 1% state.

I should look at that again. Honestly, it sounds quite high. I don't think we even paid that much. Now that I think about it I wonder if that rate is calculated before the child tax credit. We got a $2k. I think ROTH conversion and all our taxes were closer to $6k, not $8k. Something for me to check... (I really though the effective rate took into count tax credits though. So I will look that up).

Don't ask me what that rate is once we get the $1600 rebate congress is tossing around. IT will be rather low.

Anyway, our marginal tax rates are 15% & 5%. Even with the ROTH. That's crazy to me. Thank you kids and mortgage. & insane health insurance premiums (not sure I really thank that though. LOL).

I worried about my raise starting to bump us up a bit more to higher tax brackets. But we seen to be nowhere near it. Nowhere near it at all. So I am happy to leave my withholding as is, another year or 2.

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ETA: Well I guess I had to re-educate myself. The effective tax rate was tax divided by taxable income. Our taxable income is WAY below our actual income, so that makes sense.

Our effective rates per my calculation (total tax by TOTAL income) were 5.7% Fed & 1.6% state, with an extra $11,500 taxable income (ROTH conversion).

Which means out effective rate without that was 4% Fed & 0.9% state. Which means, yes, I can keep 90% of my paycheck still.

Actually, I Am keeping 86% of my monthly paycheck, but I have pretty much nothing more withheld when it comes to my overtime bonus in the spring. So it pans out. 8.5% payroll taxes (includes CA SDI) and almost 5% to fed/state means 13.5% of my wages go to tax. Not bad. Or keep 86.5% of it all. That's with all the extra interest we are earning now too.

My federal "effective" rate, ROTH conversion and all, will be 3.6% with this whole rebate thing. My tax return will show almost $90k income and my taxes of $5k will be reduced to $3400 post rebate. Crazy.

Does this seem fair to you? Do you see why it scares the crap out of me what my taxes will rise to down the road??? YIKES. Well, I am enjoying. Usually California does not get the fair end of the stick. Certainly not with AMT. Which I guess worries me more, what our taxes will be down the road. I have tried hard not to get terribly used to this. I am sure the short end of the stick will eventually appear. IT's been like this ever since my spouse stopped working. One year the government paid me to have kids. !! We sure had a knack for timing though. IT has been a tremendous help, the one income years, not paying taxes. We didn't really pay any 2-3 years. With all my raises we are starting to pay a little more. But not much...