I did a 2026 tax projection and so was able to finalize my net pay and 2026 goals.

My entire raise will go to taxes and healthcare.  😒 I had wanted to eke out some extra money from bigger raise, to cover expected tax increases in near future.  I couldn't cover any of that, so I made a note in my budget spreadsheet.  I need to come up with an extra $400/month (taxes) at some point in the near future.  The obvious solution is to just move it over from the grocery budget, when I am no longer feeding kids.  I wanted to get ahead of that curve, but I don't think it's going to happen. 

Pay cash for college 

Just one more tuition payment left for MM(22).  & then there will be one...

$10K to Savings 

The Usual

$7,500 to Investments 

I am only going to be able to save ~$5,000 from my paycheck and credit card rewards.  But there's always other snowballs (like MH's income) and snowflakes.  So I will try to be a little more aggressive on this goal this year.  It should also be easier, having less college expenses.

$1,500 to mortgage 

This is the amount we need to pay to keep on our '$10K per year paydown' trajectory.  This number is going to drop down for a couple of years (as regular principal payments increase).

We've been pretty set on not tying up any more money into the mortgage (than this) while we have two kids in college.  & I think we are leaning more towards a 'mortgage payoff' fund at this point. (Piling up money to pay off eventually, with one final lump sum.)  I was just doing the math if we front loaded this goal.  It would save us a whole whopping $50.  There's many reasons for the 'mortgage payoff' fund but definitely there's just not a lot of interest to be saved with pre-payments at this point, with low-balance/low-interest mortgage.

9% Income to Work Retirement Plans 

MH and I both contribute the minimum for 401k match.  The 9% includes employer contributions.

$0 to IRAs 2026

**Stretch Goal = $17,200 (MAX) to IRAs**

Hitting Coast mode, while strangely not getting as much tax benefit from (smaller) retirement contributions.  Which I personally think is *amazing* and makes it easier to cut back on retirement contributions. 

Leaving the stretch goal for the 'unexpected money' factor. 

& to be clear, I consider MH's income to be a snowball.  So the snowballs I need for other goals are very expected.  The stretch goal is more about if money just falls from the sky.

SUMMARY

This is also an odd year where we may have some major expense decreases mid-year, with a college graduate.   (e.g. a significant reduction in healthcare and food costs.)  We may shift these amounts to building up investments, and bumping up goals.  Will see how the year goes.

Edited to add:  It's going to be a weird year of flux.  Since I started this post, I now think we will be a 4-person household early in the year.  I don't anticipate the extra houseguest to change our goals or numbers.

MM(22) Nov 2025 'Gifted College Fund': $9,115 (+$5K ROTH)

MM(22) Dec 2025 'Gifted College Fund': $7,900 (+$5K ROTH)

Rent is paid through 1/31.

Nothing much to report.  Will pay MM's final tuition payment in February.

& I have some extra cash set aside to cover MM's last month or so of rent in college town.  Didn't have much of a plan before, but I officially told MM(22) not to worry about it.   I just did some rough math and it's still crazy how we might have just enough 'gifted college money' to cover his last month of expenses.  But too many reimbursements flying around and moving parts.  (He just got 1/3 of reimbursements owed to him from 24-25 roommates.  This was money I already gave him so he technically owes back to the college fund.  Just to make this more impossible to calculate.)  Will see.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

I won't have another DL(20) update until I get his financial aid refund, in a couple of months.

O.M.G.

Disaster company sale did not go through last Friday.  😭  I just couldn't even with that.

Of course the final chapter of disaster company was a total disaster.

The buyers planned to pay cash.  But they don't understand how money works?  I was fed juicy tidbits from multiple people along the way.  The whole thing is just bonkers.

I was still optimistic we could make this work.  I think in most cases this would be a major red flag or just wasn't going to happen.  But I felt like it would work out, eventually.  Given the details.  

So last Friday they told us the wire had been sent, but it never came through.  & then they kind of went radio silent as they scrambled to figure out their crap.

I guess they came up with an acceptable down payment on Thursday.  So I get this call in the afternoon that they need the wire info because they are heading to the bank.  What!?  (This was after almost a week of crickets.  My employer is just trying to leave us off the roller coaster, like that is really possible.  & the buyers were also pretty quiet while they scrambled.)  So that was very out of the blue.  I got the wire paperwork and it all looked good.  Surely the bank agrees the money is there, and they got all the account info correct.  But it was after 2pm when they called me.  So I knew this would be a Friday thing.

When the wire money wasn't there by noon Friday (they thought it was sent) I was really losing my mind.  I. can't. even. with. this.  

The wire did eventually came through.  I later told my employer, "You know, you never told me the amount we are accepting."  LOL.  For all I know, he demanded $500K and they only sent $400K.  (While he was trying to leave us off the roller coaster ride, he hadn't told me anything about the new agreement.  I had just seen the paperwork at some point while they were negotiating.) They had sent the agreed amount.

I have so much work to do to wrap this up.  The week delay and distracted week of limbo is not helping things.  But I am so happy how ongoing operations, payroll, and employee issues are no longer my problem.  Instead of doing 50 + 15 employee's payroll every week, I will just be doing our company (15 employees).   & I think our payroll is a lot simpler (mostly salaried) and will be easier to get my assistant independent on. 

I don't know why. everything. has. to. be. a. roller. coaster.  2026 definitely is starting off with the exact same vibe of 2025.  (When I didn't even blog for 2 months, because everything was so crazy).  

Current mood:  Exhausted and numb.  I think I am mostly in disbelief.  & the reality quickly set in as we jumped directly from that roller coaster to all the nitty gritty of moving things over.  

On the home front, there's also a lot of big things going on.  The most dramatic is that DL(20)'s girlfriend will be moving here soon.  She needs a place to land on her feet.  I expect she will live here for a while and that I will have to cosign her lease.  I am kind of, whatever.  If just minding my own business creates this much drama, what if I actually did something wild and crazy?  🤷🏻‍♀️  What difference does it make at this point?  I think cosigning a lease (so that she can get on her own two feet) is actually pretty boring and would have zero impact on our finances.  The stakes seem pretty low re: dirt cheap housing in our lower cost region (compared to any frame of reference I have).  & with two young 20-somethings that could use an apartment (if she abandons it).  I will give it some thought and won't rush into anything.  But it sounds pretty boring, in the grand scheme of things.  

I am really proud of both DL and his girlfriend.  They both have very good heads on their shoulders.  I very much relate to her situation.  She has no debt.  When it came to my own lack of debt, this was always viewed through a middle class lense as a big accomplishment.  No, you don't understand.  I couldn't have afforded one penny of debt.  The interest rates are usurious when you are 20 and on your own financially.  Being in a mega high cost city, I couldn't have personally afforded $100/month for a car loan or a credit card payment.  There was just no money to entertain debt.  I personally view it as a good thing that the GF is not going to college.  She felt like she didn't have a choice.  But she easily could have made the choice to go deep into debt for a degree.  Or she could have chosen the debt spiral (re: payday loans, car loans, credit cards, etc.) simply because she didn't know any better.

Her timeline is speeding up because wages are so much higher and labor laws are so much better in our state.  I think she will be able to save money.  & then she can go the free community college route, once she establishes her residency.  The smallest kindness will change the course of her life significantly for the better. 

I just remembered the other day that we were encouaraging my niece (who also graduates college this year) to move up here.  It's going to be a year of flux, on the household front.  Might have a household size of 3-6.  I think 6 is unlikely, but the offer is out there.  Both the niece and MM graduate this summer.

DL(20) did tell me that his plan is to live at home for 2.5 more (college) years.  Piling up the money.  He is such a mini-me of his father.  

This reminds me...  One of MM(22)'s roommates last year was *drama* and had a falling out with their parents before they signed the lease?  Their GF's parents came through and agreed to pay their rent *and* co-sign a second $4K-$5K/month property.  (You know, because they already had a college kid living in another house.) I remember at the time saying, "it must be nice!"  So I feel like life has come full circle as I consider pretty much doing the same thing.  Just 18 months later. Well, let's be clear.  I did not offer to pay the rent.  It's just a similar thing.  For one $1,600/lease.  This is more my pay grade.

This is what I started to write re: 2026 Financial Goals.

I am trying to minimize IRA contributions.  But I think we will need to contribute $5K to IRAs, in order to avoid the next tax bracket (22%).  Which feels pretty steep after paying ~$0 taxes for two decades.  & also factoring how complicated taxes are and how this means an effective tax rate of 35%+.

I ended up preparing our 2025 tax return this week (state software isn't ready but I have good IRS numbers).  And...  Our income level means we lose the ability to deduct Traditional IRA contributions.  What!?  So anyway, this is pointless and I have to plan ahead re: larger 401K contributions instead (if I want to reduce MAGI, or if I want to lower our taxable income.)

It gets even more weird.  I just reduced income by $10K (in tax software) to get a sense of what our effective tax rate is (trying to figure out if I should up 401K contributions to manage taxes) and our effective tax rate (on just this $10K) is only 22% for Federal.  😮 I was envisioning more like 40%, given how wonky our effective tax rate was for every extra dollar of income, when we had more tax breaks.  That's crazy!  I've never just paid a flat tax rate without losing all sorts of other deductions because we had more income. 

It's good because it no longer sounds horrifying to skip Traditional IRAs. 

A - I can't deduct those contributions anyway. 

B - A 22% tax hit is pretty small (compared to years past).  If we are used to 25%+ tax hits when we were in the 10% or 12% tax bracket.  & now 22% just means 22%.  

After all that, I don't have any reason to contribute any money to IRAs.  It was a windy road to get here (as I noticed more and more tax consequences of higher income), but I feel a lot more confident about dialing down retirement contributions.

The other piece of this equation is that we are no longer subject to 0% long term capital gains tax.  Which is some of why lowering our income (with retirement contributions) used to lower our tax rate so dramatically.  

There will have to be more thought and planning re: tax efficiency in the future.  For example, I never gave a flip about tax efficient mutual funds, when our investment tax rate was 0%.  It's a topic I might have a wee bit more interest in now.

Edited to add:  I got state tax software/update so was able to run through state numbers.  Definitely feeling the middle class squeeze here.  The tax rate moves pretty quickly from 4% to 9.30%.  Our marginal tax rate will be 8% for state, this year.  Bringing our total marginal tax rate to 30% (22% + 8%).  It will be a very simple tax calculation when it comes to my bonus this year.  (30% is kind of *shrugs* because that's the true marginal rate we were used to already.  It's been ~30% for a long time.  Just was a lot more complicated re: losing other tax breaks when we had extra dollars.)  Which is why I used my tax software for rough estimates (after losing professional work tax software).  Our taxes in 2026 can easily be done with some rough napkin math, in contrast.  There's not 5 different tax deductions/credits/rates/phase-outs interacting with each other.

Pay cash for college ✔

Just one more tuition payment left for MM(22).  Crazy!

$10K to Savings ✔

Final tally was $13,185. 

Saved at the last minute, by a cash gift.  Which made up for a wild spending year.

$7,500 to Investments ✔➕

Final tally: $7,900

Was able to surpass the stretch goal with my bonus.

$1,700 to mortgage ✔

Mortgage goal is non-negotiable.  I will not have a mortgage for more than 30 years on this house (while healthy and well employed). 

9% Income to Work Retirement Plans ✔

MH and I both contribute the minimum for 401k match.  The 9% includes employer contributions.

$6,000 to IRAs 2025❓

Decided to pass on this goal. $0 to IRAs.  

I put 30% to retirement last year, and wanted to focus on other goals.  This decision was before the cash gift.  But I think it's important to stay the course.  

We contributed 20% average (to retirement) during 2024/2025.  This is probably the #1 reason we are putting IRAs on ignore.  Will contribute $0.  The other reason I suppose is because we hit a big retirement milestone.  & the stock market is high.  I am sure there's many reasons.  I'd be more inclined to take advantage if we could get in some cheaper buys.

The twist: Just noticed that we are about $7,000 into the 22% tax bracket for 2025.  Ouch!  When our taxes were otherwise ~$0, our effective tax rate was 25%+ (on IRA contributions).  Because taxes are complicated.  So I can only imagine that we are talking about paying 35%+ for every dollar we don't put into retirement (with the 10% tax bump).  I guess this goal is on hold and I will very likely put at least $6K to our IRAs if we get a third of that money back.  I am really trying to back off retirement contributions but it's just not happening.  This is the flip side of efficiency and all those years I pointed out my friends and coworkers with 2x or even 3x our household income were netting the same.  I am feeling the middle class squeeze.  The cost of spending more is...  A 33% tax penalty?  Maybe I just need to let it go. I have 4 months to ponder.  

Edited to add:  Then I ran tax projections and I think it will be a $0 IRA year.  But I will just leave this as a question mark until April 15th.

SUMMARY

Retirement goals will start to decrease as we enter financial independence 'coast' mode.  The 'saving for retirement' part is over and now it's about letting that money compound.  & with that, we can start to enjoy our money more.  I don't see the point on keeping the petal to the metal for the next 10 or 15 years.  We are starting pre-retirement and enjoying our money.

2026 Goals

TBD

I need to run tax projections and figure out what my actual net paycheck will be.  From there, I can set my taxable investment goal.  

Bigger Picture

The bigger picture is that we are probably going to move our longer term savings % down from 30% to 20%.  We've personally never felt comfortable putting less than 30% to savings/investments.  We are starting to experiment with 20%, which I am well aware is still higher than average.  But for us, it feels very lax.

It's probably more precise to say that we are moving retirement savings down from 20% to 10%.  Will see how the rest shakes out.  

Our net worth increased by $115K in 2025.  This works out to $14K retirement contributions & a $96K increase in stocks.  Cash/investments down $5,000 (re: college costs).  Mortgage was paid down by $10K.  Home values remain steady.

Re: my sidebar big picture goal, the goal has been surpassed.  Still have two more years to reach goal so will leave it there.  Will see how future stock market fluctuations shake out.  It's my 'financial independence' goal, which doesn't mean anything until my kids are done with college and our mortgage is paid off (only then can we live comfortably on a lot less.)  So that's one more reason to let the next two years shake out before evaluating progress on this goal.

I suppose if the 'financial independence' goal is surpassed, there's really no need to track any further.  Future net worth gains should be about 99% stock market and real estate gains.  It would not be necessary to add to our investments.  But I will make an estimate of where I expect things to land in 2026.  There's just no specific goal that would need to be hit. 

Historically, we had a goal to increase net worth by $60K per year.  & of course, I'd expect this number to go down if we are no longer aggressively saving for retirement.

Estimate Net Worth Change for 2026:

Mortgage: Paydown $10,000  <---Regular payments + $1,500

Retirement: Contribute $14,000  <---Minimum for employer match

Investment Gains: $30,000  <---Investments doing the hard work for us

TOTAL INCREASE: $54,000

Our net worth changes never look anything like our estimate (it's rare any asset class actually has an average year). But, I go through this exercise just to make sure my goal is realistic and doable.  Or in this case, just to see what we can expect this year.

I am just presuming that other savings/investing and college spending will mostly be a wash.

Note:  Current net worth is $1.4 Mil.  Enough to give us a $1 Mil nest egg and paid-for home. 

Edited to add:  I just noticed that if we cashed out everything but retirement and $30K emergency fund, we could pay off our mortgage.  So tempting!  It's not going to happen because I have college bills to pay and some of this money technically belongs to my kids.  It just makes me wonder how much longer until we just write the check and move on from mortgage life.  It might be in 2-3 years.

& to be clear, no way on earth we'd have $1 Mil, if we paid off our mortgage sooner.  It's been a financial/strategic decision to keep to this point.  & you can also argue that keeping the mortgage longer helped us to not borrow money for college (or for anything else).  But as we hit our financial independence goal and the final college stretch...  There is no longer any reason to have a mortgage.  

I just saw that the final judging video was posted on the YouTube channel.  It shows a lot of the details.

You can copy and paste the link:

https://youtu.be/2AHWPHzncww?si=3dBnxI40zR1tn0kx

One more sleep until my Christmas dreams come true...  😁

On 12/31, disaster company got served with a lawsuit.  🙄  We knew it was coming and I expect they probably heard about the company sale and wanted to slip this through.  It was just icing on the cake of a trying week.  But we had a heads up (some months ago) and everyone seems pretty *Shrugs* about it. We will be financially responsible for anything of this nature pre-2026.  It was a disgruntled employee.  (& to be clear, doesn't matter when served.  The complaint is a pre-2026 complaint.)

Today is also the last day before DL(22)'s girlfriend flies home.  The trip was a success.  I took them out to dinner last night.  I was nervous if she would like it here and could see living here.  Because if not, who knows where they end up.  (She is unhappy in her current situation.)  So I took them out to dinner in the 'this seems to open up a lot of conversation' vein.  She looked horrified when DL(20) brought up she had a plan to move here this summer.  But it answered my question and I told her that was not unexpected. I think she was horrified that DL told us any of this, because it was more the seed of an idea.  But DL(20) was already hoping for this possibility (at some point).  & a couple of his friends want to hook her up with housing and a job.

MM(22) is inside the rose float again this year, on parade day, for his college.  I worry if he got any sleep last night, in the cold and the rain.  They sleep in the float, they have to stay near for whatever reasons.  I mean, most likely so the parade will go off without a hitch (no MIA float operators) but also probably in case of emergency and if they need to move floats for any reason.  & I am worried about him because he was sick.  He might be able to sleep most of today.  He can't afford to miss any classes because it's a new quarter on Monday.  Last year there was a much bigger gap between Jan 1 and classes starting.  & he had to stay with the float for 4 days?  Meaning, he can't go back to his college for a few more days.  The schedule will have to be a little different this year, with the time crunch.  

Oh yeah, and their float won the grand prize!  It's the first time they have won, after 75 years of participating.  So that is pretty exciting!  It's been a rough year of infinite mechanical problems that he was involved with.  I swear he told us 3 or 4 times (some months ago) that he would be over the hump.  But they ended up having several engine problems.  It just seemed to never end.  But the engine worked well enough for judging and getting through the start of the parade.  I suppose that's the most important part.  

If I have one word for 2025, it's that it was EXHAUSTING.  I am so exhausted.

The tenor of the year changed a bit.  It was a little less constant dire news and a lot less '10 bad things happening all at once.'  Because of the tone change, and some really good things that happened, I think 2025 is going to stand out as an overall good year (head and shoulders above the rest of my 40s).  But...  Man it was an exhausting year, and it started out pretty rough.  Most of the rest of my 40s is a blur of, "I don't have time to deal with and process *any* of this."  I'd say that 2025 was less overwhelming, overall. It was a weird no-cost Murphy year.  It felt like the problems were non-stop but on the money front it was one of our lower years as far as unexpected expenses and emergency spending.  It's crazy how many bigger things happened that were $0-$50 fixes.  The perfect example is I thought my cat was dying (he was very sickly and lethargic) and it turns out he was just eating plastic.  He loves plastic, but it seems to be getting worse with age.  So what stressed me out very much was an easy fix.  (I realized when he puked up some plastic before I took him to the vet.)  I feel like this sums up 2025 pretty well.  It captures the stress and drama of all the things that ended up being "nothing" or cheap fixes.  

Some pretty amazing things happened in 2025.  

**We hit some long-term/big financial goals and ended the year with a lot of good money news.

**MH got his movie made and out into the world. 

**DL(20) figured out what he wants to do with his life.  & he found his person.  Both are major life wins.

**Our 25th Anniversary trip was pretty amazing.

I am feeling very hopeful about 2026.  

On the work front, trying very hard re: everything we can actually control.  So excited to lose a chunk of workload (eventually) if this company sale goes through.  We also replaced a $20/hour employee with two $60K+ employees.  *Fingers crossed*  

I still know that we have some very trying years in our nearer future, re: aging parents.  2025 was a pretty good year on that front, and I am just overall feeling in a more hopeful space.  So it's weighing less on my mind.  But practically, we are well aware we have some very difficult years ahead of us, sooner rather than later. 

2023 & 2024 were a lot more difficult, in contrast.  You don't expect to have a significantly easier year when you have two parents going through mental declines.  But 2025 was a weirdly peaceful/easy year on this front. 

Looking ahead to 2026:

**MM(22) graduates college!  That's pretty exciting and feels along the same lines of recent retirement savings accomplishments.  Watching the work of the last 20+ years come to fruition.  

**MH is making another movie.  This has the potential to be very stressful.  But it's the big thing that is in the works for 2026.  More on this later.

MH got some good news on the movie front today.  We found out that MM's float won a big award.  & I am hoping that tomorrow is a really good news day re: selling that company.  So I'd say that 2026 is off to a strong start.