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About Me:

Monkey Mama

Just a 46-year-old mom of 2 in Northern California. My kids are Monkey Monkey(MM) and Drama Llama (DL). I am married to Monkey Hubby (MH).

We were a one-income family for 13 years. In late 2015 my spouse returned to work (minimum wage/part-time/seasonal). Something recent on his resume just buys us more options for the long run. The main benefit of this job is that he just works while the kids are in school. As always, we are saving 100% of his income.

{2023 Update: I expect that MH will retire from this job when kids are done with college and/or home is paid off. I think he likes the idea of finding more interesting or full-time work, with kids both adults now. But practically, might just stick out the *good* and very flexible job as long as possible. The very part-time job is allowing him to pursue his film passions. We are only about 5-ish years away from financial independence. Would be very different if we "needed" the money or he thought he might have decades of working years ahead of him.}

We saved a lot while we were very young and also moved to a lower cost-of-living area, to make life much simpler. We still live in California though (in one of the most expensive regions of the U.S.). *Simple* and *inexpensive* is relative.

Likewise, we have never had debt aside from our mortgage.** My blog is a testament to how much simpler life is without debt; how we have that much more money to both save and enjoy!

**Caveat: I have no problem whatsoever with credit cards paid off monthly, or low-risk credit arbitrage (for example, 0%-interest debt while earning 5% on FDIC-insured cash). These are the kinds of debt we have had. Just not interested in high-interest debt, using debt to buy beyond means, and not interested in the hassle that comes with loans and payments. With age and means, the latter (hassle) is our biggest debt avoidance motivation.

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2024 Goals

[ ]Small monthly Charitable Contribution
...($35 @ 1/31/24)
...Trying to be more mindful about how the little amounts add up and are helpful.
...This is not an all inclusive list of charitable giving but it is a new habit I want to add in addition to other donations of time, goods and money

[ ]Pay cash for college
...This is so much a given, to me. But I realize not everyone can read my mind, and so will memorialize in my goal list.
...#1 We don't do Debt
...#2 The student loan system is a scammy and corrupt mess.
...Seriously, wouldn't touch these student loan servicers with a ten foot pole.
MM YEAR 1 ✔
MM YEAR 2 ✔
MM YEAR 3 ✔
MM YEAR 4

DL YEAR 1 ✔
DL YEAR 2

[ ]$10,000 to savings
...($4,529 @ 3/31/24)
...$1,000/month, plus interest
...Topping off with snowballs

[ ]$7,500 to investments
...($1,750 @ 4/30/24)
...$350/month, plus snowflakes
(Snowflakes: credit card rewards and dividends)
...Topping off with snowballs

[ ]$2,025 to mortgage
...($0 @ 4/30/24)
...Topping off with snowballs and/or excess cash
...Keeps us on track with $10K principal paydown per year

[/]9% of household income to work retirement plans
...(9% @ 3/31/24)
...This is the minimum for the match; I'd otherwise rather fund IRAs.
...Note: Total retirement savings rate is 20% (with IRAs)

Goal savings rate = 25% of gross salary, plus funding IRAs from other sources.

[ ]$14,000 to IRAs 2024 (MAX)
...($0 @ 4/30/24)
...Will fund with MH's income
...Will not fund until the year is over. This is for tax and planning reasons. I won't know what mix of Traditional/ROTH IRA we literally can contribute until we do our 2024 taxes. In addition to that, can make a more informed decision based on our financial and tax situation for the entire year.

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**Long-Term Goals**

[X]$500,000 in retirement accounts by age 45.

Current big picture goal:

[ ]$1 Mil in retirement accounts by age 52.

Stretch Goal: Achieve by age 50

Have decided to pretty much stay the course. Keep saving 20%+ to retirement. This means taking 401K match & maxing out IRAs.

NOTE: WE HAVE NEVER CONTRIBUTED LESS THAN 10% TO RETIREMENT. NO EXCEPTIONS.

If we can't achieve at least 10%, then something else has to give. I share because it's infinitely easier to save for retirement if you start early. Let the investments do the hard work for you.

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Debt: $85,000 mortgage
{Home Purchase Price $290,000}

Ongoing goal is to *never borrow money again.*

Took on a $230k mortgage in 2001 and have not added to that.

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Net Worth: Increase net worth by $600,000 in the next 10 years. This is my "financial independence" goal.

2017: +$ 70,000 (partial year)
2018: +$ 51,000
2019: +$105,000
2020: +$104,000
2021: +$215,000
2022: <$ 65,000>
2022: +$ 85,000
TOTAL: +$565,000

This is in line with prior goal, saving 100% of our expenses every year.

{Our expenses are far more consistent than our income. Also, helps to prevent "living up to income."}

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My Pages

Taxes: Note to Self

April 17th, 2023 at 02:01 pm

I was so pleasantly surprised how low overall our taxes were last year (with MH working full year, with my raise and bonus, etc.) that I never noticed that we had graduated out of the 12% tax rate. 😵 Which also means... No more 0% tax on investments.

Which means... I need some time wrap my brain around that and actually think about taxes when it comes to investments. We've been spoiled for so long.

I went back and looked more closely because I thought maybe it was just the investments (I sold a lot of investments last year). In the end, taxable income was $89K and that only included about $3K of investment income. The rest is pretty simple. Mostly just salaries and the standard deduction. (Though we will obviously have a lot more bank interest in 2023.) With our (more than 3%) raises this year, we are clearly in a new tax bracket. 22%.

It's going to get nasty with the I Bonds. Tax-free if used for "college tuition". Not going to be tax-free re: our very low tuition costs. So that's one more tax thing I will have to think about and plan around. I had wanted to use the I Bond money for college rent. But it might make the most sense to just consider the I Bonds our emergency fund, so that we can then tap more accessible cash (without any tax consequences).

I will also have to reconsider utilizing my work 401K. If we are really close re: hitting the next tax bracket and losing 0%-tax investment space. It might be worth throwing a few thousand dollars into a 401K if it gets us back to tax-free investments. Will just have to see how the year shakes out.

Another note to self:

First ~$13K of earned income is tax-free for the kids. Have been having them claim exempt. In the end, MM(19) made $6,000 in 2022. What I didn't think about was that only $5,200 of CA wages are exempt (single standard deduction). MM(19) ended up owing $3 to California. I suppose he can continue to claim exempt for Federal. (Can do so if prior year and current year are both $0 tax years). But technically is no longer able to claim exempt (California) because he paid $3 tax for 2022. Will have to keep an eye on that. DL(17) is more likely to just work something like 15 hours per week year round, so he will probably start piling up the dough pretty quickly. Will have to have him submit a separate California W4.

I appreciated that we realized this without a big tax bill to pay!

Posted in Just Thinking, Taxes | 5 Comments »

5 Responses to “Taxes: Note to Self”

mumof2 Says:
April 18th, 2023 at 01:40 am 1681782003
1681782003

where did you find this I have just upped our taxes from his retirement pension because we apparently owe last year and this year federal taxes and we have never owed before..would be nice to get more info
MonkeyMama Says:
April 18th, 2023 at 01:53 pm 1681826005
1681826005

@mumof2 ~ https://www.nerdwallet.com/article/taxes/federal-income-tax-brackets
livingalmostlarge Says:
April 18th, 2023 at 11:14 pm 1681859684
1681859684

I've never gone on extension before but I did this year. I just didn't have bandwidth for us.
terri77 Says:
April 19th, 2023 at 11:11 am 1681902672
1681902672

I never realized that you had 0% taxes on investments if you remain below 12% income bracket. More reason for me to stay traditional rather than Roth in my TSP. Though I may have already exceeded this tax bracket. Doesn’t seem quite fair that tax brackets are the same everywhere when some live in pricey California while others like me live in low cost of living states.
MonkeyMama Says:
April 19th, 2023 at 03:14 pm 1681917294
1681917294

@Terri - It's no big deal. We get large tax breaks for doing the one-income/kids thing. I am guessing you pay 5x the tax I pay, as a single person. I will never complain about our one-income/kids tax situation. Most years we have paid in the realm of $0 (tax).

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Monkey Mama*s Monkey Money Blog

Over Prepare, Then Go With The Flow

Taxes: Note to Self

5 Responses to “Taxes: Note to Self”

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