Tag

money

Death and Taxes?

I’ve already told you about the ridiculous housing market here in the Bay Area – about how my rent is 5x my mortgage and how my Arkansas house would be worth 12x more if it was in the neighborhood surrounding our apartment building. That isn’t real news, of course. You know those things before you move here.

Today, let’s talk about that other thing people “know” about California . . . the high taxes! I’m not trying to start a big political discussion here or even discuss whether or not any individual tax rate is warranted. Frankly, I don’t really care what you think about taxes; I just want to talk about the actual impact this has outside of all the theory. If you feel some kind of moral outrage when paying taxes, this post really isn’t for you.

First! The basics:
-Are California’s taxes among the highest in the United States? Overall, yes.
-Does this make any difference to me on a daily basis? No, not really.

Next! Some caveats:
-I don’t own real estate in the state of California, so I don’t have the same tax burden I did in Arkansas.
-My salary tripled when I moved here, so my comparisons are a bit apples to oranges. But it is interesting to compare what I expected based on all of the California-bashing to what I actually pay.

Do I feel the tax burden when I get paid? No.
I was fairly disappointed when I saw the net of my first check here. When I actually looked at the breakdown however, I realized that most wasn’t going to state taxes. In fact, the state taxes are fairly in proportion to what I was paying in Arkansas considering the salary increase. Where I’m really taking a hit is with federal taxes and an increase in retirement contributions to make up for some lost time when I was in my early 20s.

Let’s use my family as an example. We are talking about effective tax rate here (not marginal).
In California – we fall at 7.4% for state and 20.6% federal. In Arkansas – we averaged 4.8% state and 13.3% federal. When we are talking about money out of my pocket, our family income more than doubled and our taxes tripled – at both the state and federal level. Obviously you feel this difference when you are looking back over a year or more, but from paycheck to paycheck the increase is minimal. If you are paying attention and optimizing your finances, you can minimize it even more.

We consider this increase negligible for our day-to-day life, but important for lifetime financial planning.

Do I feel the tax burden when I’m at the grocery store? Yes.
The combined sales tax (state, county, city) for where I do my grocery shopping is 8.75%. For where we do the rest of our shopping (clothes, household goods, fun) it is 9%. In Arkansas, it was 6.5% where we did grocery shopping and 8.5% where we did everything else. So yes, higher across the board. Interestingly, the county and city tax rates were actually higher in Arkansas. Also interestingly, we shop for groceries in both Arkansas and California in a different city from where we do everything else. Just a fun tidbit.

I think it is pretty clear that we do feel that additional 2.25% in taxes on groceries. Mix that with the overall increase in the price of goods and it has made a big change in our monthly budget. Outside of the grocery store? Not so much.

Do I feel the tax burden when I’m renewing my car registration? Yes.
Oh my goodness did I hear some horror stories about how much it was going to cost to register my car. They were – across the board – highly exaggerated. But that isn’t to say we haven’t felt a significant increase here. It cost me $30 (that includes decal fee and online payment fee) per car in Arkansas. It costs $250 for my car and $300 for the van here in California.

The actual registration in California is $46. The rest is a whole host of various state and county fees. I’m not going to try to breakdown where our money actually went, but the DMV says this is the general breakdown:

Local government (cities/counties) 40.7%
California Highway Patrol 25.7%
DMV 13.9%
State highways (Caltrans) 13.0%
Air Resources Board 1.7%
Other state agencies 4.3%
State General Fund 0.7%

Do I feel the tax burden when I file my taxes? Eh.
On one hand, I didn’t have any surprised the first time I filed California taxes. We didn’t owe and we got a small refund, but nothing that would make me think I need to reevaluate how much money we’re loaning the government. On the other hand, this is where you see the full-year total and feel the difference of the higher tax rate. On yet the other hand (that is #3, if you are counting), what we get for our tax money here in California is all kinds of amazing. It is much easier to stomach the amount leaving your pockets if you feel like you are actually benefiting. Just to toss one more hand in there, our tax burden is offset a bit by the little man’s disability, medical costs, and services. So filing is a mixed bag, I guess.

So, that is the actually breakdown – massively simplified, of course – of what it is like to live out here in tax-land. The view from the ground, not from the political office. My takeaway? If you are opposed to a lot of the things that the government does out here in California? You probably wouldn’t be happy with your bill. If you are opposed to paying taxes in general? You probably aren’t ever happy. If you are anybody else? You probably will just adjust your budget and move on.

How to Survive the Great Wolf Lodge

I’ll start out by saying that this post is not sponsored by the Great Wolf Lodge.* We have been four times and friends/family/coworkers/etc. always ask about it. I have mostly good things to say – the place is super fun – but I always add one big caveat . . . it is expensive. If you don’t plan ahead, this place will drain every spare cent from your bank account. Be prepared to amputate a limb on the way in.**

It doesn’t have to be that way though. If you pay attention to my tried-and-true tips, you can keep your costs at a minimum and still have a great time.

I’m writing this from my experience staying at the Great Wolf Lodge in Grapevine, Texas. The rooms and amenities are pretty much identical, but there are some differences and extra activities vary so check your location for specific information.

Great Wolf Lodge, Grapevine, Texas (March 2015)
Great Wolf Lodge, Grapevine, Texas (March 2015)

1) Book smart.
A quick look online*** shows rooms at Great Wolf Grapevine currently ranging $200-$400 weekday and $400-$500 weekend. Last minute spring break is not a good time to plan an impromptu trip to this kind of resort. Instead, book early and look for special deals (the website nearly always has some sort of promotion going on if you are booking more than one night). Great Wolf pops up on Groupon all of the time. These deals don’t always save you that much on the nightly rate (we used one this time and saved about 20%), but they include things like food and activity credits. Also, it is very important to remember that your nightly rate includes waterpark passes. For a family of four, I would say that probably works out to about $100 of your rate (I didn’t do any real calculations here, just thought about tickets I’ve purchased to similar things). This brings us to number 2.

2) Use the waterpark.
You have access to the waterpark from the time you check in through the day you check out (you can and are encouraged to continue to access the waterpark after standard checkout time). Do not book a room at Great Wolf unless you plan to spend at least 75% of your time at the waterpark. Just the waterpark, not activities that cost extra. Personally, we usually spend at least 85% of our time on-site to get our money’s worth. This is not the kind of place to stay if you plan to spend a couple of hours swimming and the rest of the time out-and-about doing traditional vacation stuff. If that is what you are interested in, find a hotel with an awesome pool and do Great Wolf some other time. Seriously.

3) Plan your food.
Okay, now we are getting in to the more important money saving tips. Great Wolf has a number of snack bars and restaurants on-site of various prices and cuisine. Think about what you want to eat and plan accordingly. For example, they have a tasty (and fully-stocked) buffet at breakfast, lunch, and dinner. You probably don’t need to visit the buffet at each meal, especially if you are going to be swimming all day long. Maybe hit it up for morning fuel and do a cheaper snack bar option for lunch. Or pick up a $15 pizza for dinner (also on-site). You have a refrigerator and microwave in your hotel room – use this! Bring your own breakfast items, snacks, and drinks. You can’t always take these things into the activities, but since you room is only a short walk away they are always available. And while a lot of the food is priced like traditional restaurants, the more snacky items and drinks have your typical resort mark-up. This is what you want to supplement with your own supplies. I grabbed two bananas and apples on the way out of the breakfast buffet for mid-morning snacks. Worked perfectly and it was healthy! Mom win!

4) Don’t attach your kid’s band to your credit card.
One of the really nice things about Great Wolf is the wristband you get at check in. These are your “tickets” to the waterpark, but can also be your room key and credit card. We usually do room key/credit card for the adults, room key for the daughter, and just the regular band for the little man. This means you don’t have to take anything down to the waterpark except yourself; everything you need is on your wrist.
Now, you might think it will save you a lot of time by putting some money on your kid’s band, but I disagree. Let’s think about this scenario: You give little Johnny $20 for souvenirs and snacks. He immediately buys a $12 giant icee. It comes in a cup that gets free refills, so he argues that it will be a good deal (but are you really going to let him drink a bucket of soda with every meal?). Then he buys ice cream and a bag of chips. We know how kids are, so this all happens in the first two hours. Suddenly it is lunchtime and you head to the buffet. Little Johnny isn’t hungry though, so he just picks at his food. Then 2pm rolls around. Little Johnny is starving, but doesn’t have any money left and you have to pay out-of-pocket. See? Just don’t do it. Stay in charge or you could blow all of that money-saving planning.

5) Don’t do the extra activities unless you are staying for more than two nights.
Let’s be honest here – the other activities in the hotel, especially various Quest games, is simply a way to get the kids out of your hair for a little bit and burn off the sugar they have been consuming. With the questing game, you have to purchase a wand (reusable, but who is really going to remember to bring that back next time?) and pay for the game. Do you really need to pay for a couple of hours of silence if you are only staying for a short time? If you are staying longer however, buy that game, push the kids out of the hotel room, and put your feet up. You deserve that!
Just staying for a night or two? Explore some of the more cost-effective options. At Grapevine, the ropes course is a great option if your kid needs more than the waterpark. For $10 they can visit it as many times as they want and – bonus! – get to burn off energy while they climb.

Ropes course, Great Wolf Lodge, Grapevine, Texas (March 2015)
Ropes course, Great Wolf Lodge, Grapevine, Texas (March 2015)

*Email me, Great Wolf Lodge! I’ll gladly try and report back on all of your services. ☺
**Because it costs an arm and a leg . . . get it?
***Last week when I wrote this.

Cold Hard Cash

So, let’s see. . .
The daughter needs braces: $5,500
The house needs siding: $12,000
The little man needs a van: $35,000
I need a vintage Hermes Birkin bag: $15,000

Okay, that last one might be better classified as a “want”
or, more appropriately, a “never gonna happen.”

 

Why am I telling you all this? Well, we are starting a number of small ventures to raise extra money – freelance and academic writing, computer repair, a second work-from-home job, a GoFundMe campaign for the van – and one important thing that will affect you, dear readers.*

Mario Coins
Am I asking you for money? No, not directly. In the next few weeks you will start to see ads appear on Playfullytacky.com. Yes, I’m monetizing this blog. I avoided doing it for a long time, but at this point every little bit of revenue will help in a big way (and I can assure you, the revenue will be only slightly above negligible). Don’t worry – all of the content remains free and I’ll try to keep the annoying-factor down as much as possible.

I’m researching my best options right now, so you will probably see ads jumping around on the page until I finalize what I like best. I’m also in the middle of a redesign. If you aren’t reading this on playfullytacky.com, go check it out! I’m open to comments and suggestions. I especially want to know if something doesn’t work on your end.

So, get ready for some changes to the site. I hope you will keep reading my tacky tales; I enjoy writing them.

*Plus, how can a anonymous wealthy benefactor make all of our dreams come true if I don’t post about it? Be logical, people.