DH is a new big law partner and I have no clue how to budget

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here. Thanks for the replies!

DH doesn’t want to do an financial advisor right now, and I’m okay with that. He has spoken to numerous other parters at his firm, and they all are doing something different. Many have financial advisors, but many don’t. And the financial advisors we have spoken to don’t appear to be offering any advice we haven’t already considered (and much of it we are already following). Also, my issue has been taken care of with the free advice offered on DCUM (plus the idea of doing 529s at the end of the year!).

We do have an accountant, though.

We have an account with money we set aside last year to give us a financial buffer for this year, and DH said he’ll transfer all our extra money into that account each time he gets one of his bigger checks. So our regular checking account balance wont’ show any money we shouldn’t be touching. I think this is going to take care of my issue. I figured this had to be a pretty simple fix.

Just fyi, there was no extra money from our quarterly draws after tax payments. Sadly. And make sure you understand how much medical will be. It was 4-5k per month for us, so a high chunk out of the monthly paycheck. Made it hard to save during the year.

Yea I work just for the healthcare tbh.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For my final estimated quarterly tax payment last year we were anticipating something like 40k-50k, based on our accountant’s projections. He popped up several days before the due date and said we should pay $250k+. Insanity. We did have a massive year and some unexpected income, but even with that it’s clear he just had us underpaying throughout the year.

Moral of the story: find a really, really good CPA who understands your firm’s approach and documents.

A large portion of DH's income comes at the end of the year (combination of clients paying bills in December and end-of-year bonus). If this is what happened to you then you've got to use that bonus/bigger distribution to pay your tax bill. Not uncommon. If you use the annualized installment method on your taxes or pay the safe harbor amount, you should be able to avoid a penalty for underpayment.

I love how your tax bill is greater to an 97% of the US income, and you can’t figure out your taxes.

Ok. They probably get like no deductions at all, you do realize that, right? So maybe you can say thank you. These people at the bottom of the highest tax brackets are funding your tax benefits.

Doubling down on the trolling by trying to be an even more unspeakable a$$hat I see! Bravo.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here. Thanks for the replies!

DH doesn’t want to do an financial advisor right now, and I’m okay with that. He has spoken to numerous other parters at his firm, and they all are doing something different. Many have financial advisors, but many don’t. And the financial advisors we have spoken to don’t appear to be offering any advice we haven’t already considered (and much of it we are already following). Also, my issue has been taken care of with the free advice offered on DCUM (plus the idea of doing 529s at the end of the year!).

We do have an accountant, though.

We have an account with money we set aside last year to give us a financial buffer for this year, and DH said he’ll transfer all our extra money into that account each time he gets one of his bigger checks. So our regular checking account balance wont’ show any money we shouldn’t be touching. I think this is going to take care of my issue. I figured this had to be a pretty simple fix.

Just fyi, there was no extra money from our quarterly draws after tax payments. Sadly. And make sure you understand how much medical will be. It was 4-5k per month for us, so a high chunk out of the monthly paycheck. Made it hard to save during the year.

Well when I say “extra” I mean we are keeping what we received each month in 2020 and putting the rest into that account. The raise I referred to earlier was actually a raise during 2021 but it happened late in the year and I knew that DH would be taking home less than that bigger number the first year of partnership so I continued to think of his salary as the 2020 number. Between the money we put away last year and what we are putting in the account we don’t normally use, we should be okay. My issue isn’t not being able to pay taxes so much as it is just keeping general track of everyday spending. Like right now the money we have in our main checking account is what we have until the end of June, and it feels good to have that concrete number. And medical is already deducted so it’s a high number but not something I have to think about when looking at how much is in the account.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. Thanks for the replies!

DH doesn’t want to do an financial advisor right now, and I’m okay with that. He has spoken to numerous other parters at his firm, and they all are doing something different. Many have financial advisors, but many don’t. And the financial advisors we have spoken to don’t appear to be offering any advice we haven’t already considered (and much of it we are already following). Also, my issue has been taken care of with the free advice offered on DCUM (plus the idea of doing 529s at the end of the year!).

We do have an accountant, though.

We have an account with money we set aside last year to give us a financial buffer for this year, and DH said he’ll transfer all our extra money into that account each time he gets one of his bigger checks. So our regular checking account balance wont’ show any money we shouldn’t be touching. I think this is going to take care of my issue. I figured this had to be a pretty simple fix.

Just fyi, there was no extra money from our quarterly draws after tax payments. Sadly. And make sure you understand how much medical will be. It was 4-5k per month for us, so a high chunk out of the monthly paycheck. Made it hard to save during the year.

Well when I say “extra” I mean we are keeping what we received each month in 2020 and putting the rest into that account. The raise I referred to earlier was actually a raise during 2021 but it happened late in the year and I knew that DH would be taking home less than that bigger number the first year of partnership so I continued to think of his salary as the 2020 number. Between the money we put away last year and what we are putting in the account we don’t normally use, we should be okay. My issue isn’t not being able to pay taxes so much as it is just keeping general track of everyday spending. Like right now the money we have in our main checking account is what we have until the end of June, and it feels good to have that concrete number. And medical is already deducted so it’s a high number but not something I have to think about when looking at how much is in the account.

I don’t totally understand what you’re saying. As a non numbers person, here’s how I think of it. Take home is around 850k total. Including drawers and end of year. So, about 410 post taxes. The monthly salary drawer is on par with getting paid 250k for the year. Tax Drawers make up about 300k. So, now you’ve made 590k, post taxes, and have about 400k left give or take for payouts, but will pay taxes on those of about 60-70 percent.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. Thanks for the replies!

DH doesn’t want to do an financial advisor right now, and I’m okay with that. He has spoken to numerous other parters at his firm, and they all are doing something different. Many have financial advisors, but many don’t. And the financial advisors we have spoken to don’t appear to be offering any advice we haven’t already considered (and much of it we are already following). Also, my issue has been taken care of with the free advice offered on DCUM (plus the idea of doing 529s at the end of the year!).

We do have an accountant, though.

We have an account with money we set aside last year to give us a financial buffer for this year, and DH said he’ll transfer all our extra money into that account each time he gets one of his bigger checks. So our regular checking account balance wont’ show any money we shouldn’t be touching. I think this is going to take care of my issue. I figured this had to be a pretty simple fix.

Just fyi, there was no extra money from our quarterly draws after tax payments. Sadly. And make sure you understand how much medical will be. It was 4-5k per month for us, so a high chunk out of the monthly paycheck. Made it hard to save during the year.

Argh sorry wrote on phone. Point is, after taxes it’s making about 410k, and as a senior associate it was around 500k, so it’s less, yes, by a lot.

Well when I say “extra” I mean we are keeping what we received each month in 2020 and putting the rest into that account. The raise I referred to earlier was actually a raise during 2021 but it happened late in the year and I knew that DH would be taking home less than that bigger number the first year of partnership so I continued to think of his salary as the 2020 number. Between the money we put away last year and what we are putting in the account we don’t normally use, we should be okay. My issue isn’t not being able to pay taxes so much as it is just keeping general track of everyday spending. Like right now the money we have in our main checking account is what we have until the end of June, and it feels good to have that concrete number. And medical is already deducted so it’s a high number but not something I have to think about when looking at how much is in the account.

I don’t totally understand what you’re saying. As a non numbers person, here’s how I think of it. Take home is around 850k total. Including drawers and end of year. So, about 410 post taxes. The monthly salary drawer is on par with getting paid 250k for the year. Tax Drawers make up about 300k. So, now you’ve made 590k, post taxes, and have about 400k left give or take for payouts, but will pay taxes on those of about 60-70 percent.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. Thanks for the replies!

DH doesn’t want to do an financial advisor right now, and I’m okay with that. He has spoken to numerous other parters at his firm, and they all are doing something different. Many have financial advisors, but many don’t. And the financial advisors we have spoken to don’t appear to be offering any advice we haven’t already considered (and much of it we are already following). Also, my issue has been taken care of with the free advice offered on DCUM (plus the idea of doing 529s at the end of the year!).

We do have an accountant, though.

We have an account with money we set aside last year to give us a financial buffer for this year, and DH said he’ll transfer all our extra money into that account each time he gets one of his bigger checks. So our regular checking account balance wont’ show any money we shouldn’t be touching. I think this is going to take care of my issue. I figured this had to be a pretty simple fix.

Just fyi, there was no extra money from our quarterly draws after tax payments. Sadly. And make sure you understand how much medical will be. It was 4-5k per month for us, so a high chunk out of the monthly paycheck. Made it hard to save during the year.

Well when I say “extra” I mean we are keeping what we received each month in 2020 and putting the rest into that account. The raise I referred to earlier was actually a raise during 2021 but it happened late in the year and I knew that DH would be taking home less than that bigger number the first year of partnership so I continued to think of his salary as the 2020 number. Between the money we put away last year and what we are putting in the account we don’t normally use, we should be okay. My issue isn’t not being able to pay taxes so much as it is just keeping general track of everyday spending. Like right now the money we have in our main checking account is what we have until the end of June, and it feels good to have that concrete number. And medical is already deducted so it’s a high number but not something I have to think about when looking at how much is in the account.

I don’t totally understand what you’re saying. As a non numbers person, here’s how I think of it. Take home is around 850k total. Including drawers and end of year. So, about 410 post taxes. The monthly salary drawer is on par with getting paid 250k for the year. Tax Drawers make up about 300k. So, now you’ve made 590k, post taxes, and have about 400k left give or take for payouts, but will pay taxes on those of about 60-70 percent.

But the paychecks aren’t each 1/12th of the yearly take home pay. They are all wildly different amounts. I don’t budget according to what the annual take home is, but rather what’s in our account at any given time.

[Anonymous]

The best way to budget is to know all of it-- it doesn't mean that you both can't track things, but you need to know the full financial picture, including taxes. We tried this divide/conquer, but it doesn't work well.

I would stay at your same spending rate for a year until you get your arms around bonuses, stock, taxes, etc. We got less excited about DH's big raises when we realized they launched us into a much higher tax bracket and our take home was smaller than we thought.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. Thanks for the replies!

DH doesn’t want to do an financial advisor right now, and I’m okay with that. He has spoken to numerous other parters at his firm, and they all are doing something different. Many have financial advisors, but many don’t. And the financial advisors we have spoken to don’t appear to be offering any advice we haven’t already considered (and much of it we are already following). Also, my issue has been taken care of with the free advice offered on DCUM (plus the idea of doing 529s at the end of the year!).

We do have an accountant, though.

We have an account with money we set aside last year to give us a financial buffer for this year, and DH said he’ll transfer all our extra money into that account each time he gets one of his bigger checks. So our regular checking account balance wont’ show any money we shouldn’t be touching. I think this is going to take care of my issue. I figured this had to be a pretty simple fix.

Just fyi, there was no extra money from our quarterly draws after tax payments. Sadly. And make sure you understand how much medical will be. It was 4-5k per month for us, so a high chunk out of the monthly paycheck. Made it hard to save during the year.

Oh, sorry. Ours are. We get a set amount for salary. And then the drawers are on top of that.

Well when I say “extra” I mean we are keeping what we received each month in 2020 and putting the rest into that account. The raise I referred to earlier was actually a raise during 2021 but it happened late in the year and I knew that DH would be taking home less than that bigger number the first year of partnership so I continued to think of his salary as the 2020 number. Between the money we put away last year and what we are putting in the account we don’t normally use, we should be okay. My issue isn’t not being able to pay taxes so much as it is just keeping general track of everyday spending. Like right now the money we have in our main checking account is what we have until the end of June, and it feels good to have that concrete number. And medical is already deducted so it’s a high number but not something I have to think about when looking at how much is in the account.

I don’t totally understand what you’re saying. As a non numbers person, here’s how I think of it. Take home is around 850k total. Including drawers and end of year. So, about 410 post taxes. The monthly salary drawer is on par with getting paid 250k for the year. Tax Drawers make up about 300k. So, now you’ve made 590k, post taxes, and have about 400k left give or take for payouts, but will pay taxes on those of about 60-70 percent.

But the paychecks aren’t each 1/12th of the yearly take home pay. They are all wildly different amounts. I don’t budget according to what the annual take home is, but rather what’s in our account at any given time.

[Anonymous]

Anonymous wrote:The best way to budget is to know all of it-- it doesn't mean that you both can't track things, but you need to know the full financial picture, including taxes. We tried this divide/conquer, but it doesn't work well.

I would stay at your same spending rate for a year until you get your arms around bonuses, stock, taxes, etc. We got less excited about DH's big raises when we realized they launched us into a much higher tax bracket and our take home was smaller than we thought.

This. You don’t have any more money. Likely quite a bit less. It’s what it is. And no tax deductions.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The best way to budget is to know all of it-- it doesn't mean that you both can't track things, but you need to know the full financial picture, including taxes. We tried this divide/conquer, but it doesn't work well.

I would stay at your same spending rate for a year until you get your arms around bonuses, stock, taxes, etc. We got less excited about DH's big raises when we realized they launched us into a much higher tax bracket and our take home was smaller than we thought.

This. You don’t have any more money. Likely quite a bit less. It’s what it is. And no tax deductions.

Ha well this is why I want to know how much I have! The comment about a raise was just to say that the raise contributes even more to my confusion. I know it’s a little confusing but I’m not talking about a raise from last year, I’m talking about a raise from the year before which I do think makes it so take home pay is more than it was in 2020. So I don’t think there is more than last year, just more than 2020.

But ultimately it doesn’t matter because I haven’t known what my “spending rate” (in terms of dollar amount) was for years, just that it has always been well within our means based on our financial goals. And I won’t know whether this year it’s more or less or the same. And I don’t think that it matters, I just want to keep spending well within our means.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The best way to budget is to know all of it-- it doesn't mean that you both can't track things, but you need to know the full financial picture, including taxes. We tried this divide/conquer, but it doesn't work well.

I would stay at your same spending rate for a year until you get your arms around bonuses, stock, taxes, etc. We got less excited about DH's big raises when we realized they launched us into a much higher tax bracket and our take home was smaller than we thought.

This. You don’t have any more money. Likely quite a bit less. It’s what it is. And no tax deductions.

Ha well this is why I want to know how much I have! The comment about a raise was just to say that the raise contributes even more to my confusion. I know it’s a little confusing but I’m not talking about a raise from last year, I’m talking about a raise from the year before which I do think makes it so take home pay is more than it was in 2020. So I don’t think there is more than last year, just more than 2020.

But ultimately it doesn’t matter because I haven’t known what my “spending rate” (in terms of dollar amount) was for years, just that it has always been well within our means based on our financial goals. And I won’t know whether this year it’s more or less or the same. And I don’t think that it matters, I just want to keep spending well within our means.

The best way to deal with this is to keep expenses the same and get through it. By year 3 it really does not matter anymore as there is more money than you can spend.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. Thanks for the replies!

DH doesn’t want to do an financial advisor right now, and I’m okay with that. He has spoken to numerous other parters at his firm, and they all are doing something different. Many have financial advisors, but many don’t. And the financial advisors we have spoken to don’t appear to be offering any advice we haven’t already considered (and much of it we are already following). Also, my issue has been taken care of with the free advice offered on DCUM (plus the idea of doing 529s at the end of the year!).

We do have an accountant, though.

We have an account with money we set aside last year to give us a financial buffer for this year, and DH said he’ll transfer all our extra money into that account each time he gets one of his bigger checks. So our regular checking account balance wont’ show any money we shouldn’t be touching. I think this is going to take care of my issue. I figured this had to be a pretty simple fix.

Just fyi, there was no extra money from our quarterly draws after tax payments. Sadly. And make sure you understand how much medical will be. It was 4-5k per month for us, so a high chunk out of the monthly paycheck. Made it hard to save during the year.

Yea I work just for the healthcare tbh.

Same - I will continue to work just for healthcare

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. Thanks for the replies!

DH doesn’t want to do an financial advisor right now, and I’m okay with that. He has spoken to numerous other parters at his firm, and they all are doing something different. Many have financial advisors, but many don’t. And the financial advisors we have spoken to don’t appear to be offering any advice we haven’t already considered (and much of it we are already following). Also, my issue has been taken care of with the free advice offered on DCUM (plus the idea of doing 529s at the end of the year!).

We do have an accountant, though.

We have an account with money we set aside last year to give us a financial buffer for this year, and DH said he’ll transfer all our extra money into that account each time he gets one of his bigger checks. So our regular checking account balance wont’ show any money we shouldn’t be touching. I think this is going to take care of my issue. I figured this had to be a pretty simple fix.

Just fyi, there was no extra money from our quarterly draws after tax payments. Sadly. And make sure you understand how much medical will be. It was 4-5k per month for us, so a high chunk out of the monthly paycheck. Made it hard to save during the year.

Yea I work just for the healthcare tbh.

Same - I will continue to work just for healthcare

Same.