Do You Make Too Much Money?

Most of you know that I decided to leave my cushy job so that I could have more time with Samuel. One of the reasons I decided to leave was,

I made too much money.

I know this sounds crazy, so hear me out.

Most parents who have to pay for childcare of any kind know how difficult it is to right those gigantic checks. And for many people, paying for childcare is pretty much equal to a salary, so one parent stays home. For us, my income was more than childcare, and since we do need some extra income, I kept working part-time at my job.

Since I work as a contractor, I send my own quarterly federal income tax payments to the government. This is always a joyous time at our house where we reflect on all the things our bank account is being emptied to pay for. Not.

When I added up childcare and taxes, it seemed to be about 50% of my income. To me, that was ludicrous!!! Why would I work twice as much as I should when I would rather be taking care of Samuel anyway?

When I was an employee and had income tax deducted from my check, I never thought twice about it. But have you ever looked at the income tax brackets? You might be making too much money for your tax payments to make frugal sense.

For example, in 2010, our adjusted gross income (AGI) was $16,000 less than 2009 for various reasons. And in 2010, we paid $10,000 less in taxes! Does that make any sense to you!? Why would I work so hard (and away from my little one) for that extra $16,000 just to keep 37.5% of it!?

I wouldn’t. Which is why I wanted to find out exactly how much money I needed to make. Then, I just needed to find a job change that would allow me to make that income. No more. No less.

And I had to stop putting value on the amount of money I brought home.

Here are the two things I looked at:

The Income Tax Brackets

There is a 10% jump in the tax percentage you owe when you start making a certain amount of money.

Just look at the numbers in the 2011 table for married filing jointly: if your joint AGI is between $17,000 and $69,000, you will pay 15% for your income in that bracket (the income over $17,000). If your joint AGI is between $69,000 and $139,350, you will pay 25% for your income in that bracket (the income over $69,000).

That is just not worth it to me.

Our Budget

Because we have followed Dave Ramsey for quite a while, we always try to make a zero-based budget every month. In other words, we assign each dollar we are bringing home to something.

Here’s what I saw: When our income grew, our savings and giving grew, but so did our spending.

Since we had that extra money floating around in there, even with extra savings and giving, why not get a $40/month massage subscription? After all, I need it for all of the computer work I do. When I’m stressed and exhausted? “Can we just order in!?” – Up goes the dining out budget. You can think of countless examples of this: work clothes, compulsive weekend spending, etc.

I looked at our budget to see exactly what I needed to make.

And we prayed. Boy, did we pray that we were making the right decisions.

And so far, I think we did! I am loving my extra time with Samuel.

But what happens when my filming project is over? Will the other avenues I’ve been seeking really pan out? Will I have to look for something else? Will it be impossible? I don’t know the answers to those questions yet, but I do know that I can trust that God will take care of us. And that’s worth money in the bank.


2 thoughts on “Do You Make Too Much Money?

  1. Karyn

    I’m kind of in awe about the tax bracket information. How could I have been so naive/blind to that!? I think I need to take a closer look at what we’re paying now compared to previous (lesser earning) years. How discouraging it is to see how much is truly taken out…

    1. Stephanie Post author

      I know, girl! When I saw that, I was SO MAD at myself. For some families, it is still worth it to them to keep their career, keep the other 75% ( minus social security, medicaire, health insurance, etc. ), and keep it up! For us, it just isn’t. It’s almost like you are penalized for reaching a comfortable earning point for your family. But if that’s what’s needed to keep me dependent on God, so be it!

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