$70k The New Minimum Wage?


How much money do you need to be happy?

I’ve been thinking about this since I read the Should I Try To Make Less Money? post last week.  It reminded me of a study I read years ago about the financial tipping point where there is no more emotional satisfaction derived from a higher salary. I’m not saying that you can’t live a more fabulous life (travel, buying stuff) if you earn more than that amount, but that earning more will not impact your emotional satisfaction.

The article states that a salary around $75,000 is the tipping point. This means that a person’s basic needs are met and they are emotionally satisfied. In other words, you can pay the bills. You don’t worry about covering the costs of housing, food, transportation.

Should $75k Be The New Minimum Wage?

Yesterday I read a story about Gravity Payments CEO Dan Price. Mr Price raised the minimum wage in his company to $70,000. For some employees, that will be a 50% pay increase. Mr. Price is currently earning $1,000,0000 per year and will reduce his own salary to fund the higher salaries for employees. Gravity Payments is a privately held company. There are no investors to satisfy with earnings reports, which gives them a little more flexibility.

But what about other companies? Do you know a CEO that would reduce his income in order to increase his employee’s salaries? I’ve worked with CEOs that talk about taking care of their employees, but they would not reduce their own salary. I’ve also learned that many CEOs are trying to keep up with the Jones, without realizing that they are the Jones. It’s hard for many of us to imagine, but there are people earning $1,000,000 that cannot live within their means.

Have you Thought about it?

Have you thought about how much money you need to earn to feel secure? Is $70,000 enough? That study was published several years ago, should the number be adjusted for inflation?

My Thoughts

We have increased our income a significant amount over the last couple years. That increase has been at the cost of long work hours and travel. When I finished our tax return this week and reviewed our taxes in comparison to the prior year, there were a few things I noticed:

We increased our income by $10,000

Approximately 30% of that increase went to taxes

We lost several deductions and refundable credits by moving into a higher tax bracket.

 Was the $10,000 increase worth the extra hours of work? Did the money contribute to our emotional well-being?

It was worth it because we put all the extra money towards debt repayment. I could see myself doing it for a couple more years to pay off my student loans. When the loans are paid off, I would rather work less. We live a comfortable life now so I think we could reduce our income and still be happy.

Have you thought about reducing your income?

Student Loan Update

Student Loan Update

It’s been almost a year since I posted my Student Loan Debt Destruction Plan. I think it’s time to give an update on my payment progress.

The Plan

This was my dirty little secret one year ago:

Private Loan $ 17,687.06
Loan #1 $ 8,906.01
Loan #2 $ 18,960.15
Loan #3 $40,637.60
Total $ 86,190.82

I cringe every time I see that number. Actually, I feel embarrassed because I studied Finance. I should have known better. How did I get so far in debt? That’s another story.

What’s done is done and it was time to fix things. The plan was to increase my monthly payment from the $800 minimum to $1,300 per month. The extra $500 per month would go towards the Private Loan because it has the highest interest rate. With monthly payments of $1300, I projected my balance to be $73,020 by May 1, 2015.

The question is, did I stick to the plan?

April 2015 Update

No, I did not stick to the plan.


These are my loan balances today:

Private Loan $ 865.25
Loan #1 $ 7,780.36
Loan #2 $ 18,062.37
Loan #3 $38,986.39
Total $ 65,694.37

I have paid off $20,496.45 of student loan debt in the last year!

The Private Loan will be paid off by the end of this month. I can’t wait to make that last payment.

How Did I Do It?

Last May I increased my monthly payments to $1,300. In August I adjusted our budget and increased my monthly payments to $1,600. That meant I was putting an extra $800 towards principle every month.

I received a bonus in January and put the ENTIRE bonus towards my student loans. There was a small part of me that wanted to treat myself with just a little bit of that bonus money, but I stuck to the plan and made a student loan payment equal to my bonus as soon as I received it.

I received a raise in January and was able to increase my monthly payments to $1,800 per month.

What’s Next?

I plan to continue paying $1,800 per month. With the Private Loan paid off, I will be paying an extra $1,200 towards principle every month. My next target is Loan #1, which I expect to pay off by the end of October. That will leave the two biggies…Loan #2 & Loan #3.

I haven’t decided how to attack Loan #2 and Loan #3 yet. Loan #2 has a lower balance and  would be quicker to payoff, but it also has a lower interest rate. I will probably focus on Loan #3 before Loan #2 because of the interest rate, but I don’t have to make that decision until October.

If I can keep making the same payments and receive a bonus again next year, I expect to pay off Loan #2 and Loan #3 in 2017.

That’s just over three years to payoff $86k in student loans. A lot can change between now then so for right now I am going to focus on my next small goal….Loan #1

What A Week! 2015-5


What a week!

This week on House of Tre we talked about…

… the fact that I Need An IRA Account before Wednesday and it’s time to make a decision. **Update, I’m happy to say that I opened my sharebuilder account on Friday.**

…what to do if your taxes are not done by April 15th. I’ll be spending the rest of today finishing our tax return :-)

Around the web….

…we joined Financially Savvy Saturdays #85

…vote for me in the Peacockery contest at Lifestyle Voices. Voting ends tonight so don’t procrastinate.

Blogs I loved….

…@budgetblogess posted What Spenderella Did When I Wasn’t Watching… Actually there’s much more than Spenderella to the post, but Spenderella is my fave.

… @EyesontheDollar posted Should I Try To Make Less Money? It’s an interesting conversation. I’ve seen everyone from high-income to low-income ask the same question.

…for all you frugalistas out there, check out this 2015 Tax Day Freebies list

Have a great week!


Taxes Not Done? Don’t Panic

tax extension


7 days left to file your tax return

Does that phrase send you into a panic? Maybe you are missing documents. Or you don’t have time to get everything organized. 7 days is not a lot of time! How can you possible make the deadline?

Don’t Panic

There is another solution that does not involve several sleepless nights and a mad dash to the post office (Yes! People still do that!)

You can file an extension. An extension will extend your deadline until October 15th to finish the federal tax return and file it with the IRS. Extensions do not just automatically happen for everyone who has not filed by April 15th. No, there are penalties for ignoring the magica; date of April 15th.

To request an extension, you must file form 4868 by April 15th. If you do not file form 4868, you may be charged a late filing penalty by the IRS.

How Do You File Form 4868?

It’s quite simple actually. You can efile or send in a paper form. Either method you choose must be submitted by April 15th. To file a paper form. Complete form 4868 and submit your estimated taxes. If you efile form 4868, don’t forget to send in your payment of estimated taxes. Easy!

Wait, Estimated Taxes?

Estimated taxes? Oh, that. The IRS will give an extension to file your return, but not to pay the taxes you owe. If you are expecting a refund, you have nothing to worry about. File form 4868 and call it a day. You now have another six months to procrastinate about filing your tax return.

If you will owe taxes, it’s not quite so easy. You must estimate the amount owed and pay that amount by April 15th. That means you have some work to do.

Then Why File An Extension?

Let’s be honest, if you have to go through the trouble of estimating the amount of taxes you owe the IRS, you may as well finish your return and be done with it.

An extension is really for someone who is missing documentation or for some other reason cannot complete their return by April 15th. For example, you contributed $5,000 to your local food bank. You you did not receive a contribution receipt from the food bank. You called a few weeks ago, but still no receipt. You need to have the receipt before you file the return. So you file an extension and then file the return after you receive the receipt.
Have you filed your taxes?

*Part of Financially Savvy Saturdays on brokeGIRLrich and Vickie’s Kitchen and Garden*

Help! I need an IRA account!

Help! I Need An IRA Account!

April 15th is quickly approaching and I have to open and fund a new IRA account by that date.  I plan on investing in stocks in this account, so the cost of transactions is important.

My 401k charges a $100 annual fee to have a brokerage account and then trading fees on top of that. I know that I can open an online trading account that is much less expensive so  I’ve invested my 401K in ETFs and will be investing my IRA in stocks.

After many hours of research, these are the three possibilities:


e*Trade does not have a minimum opening balance or charge a maintenance fee. Stock and option trades are $9.99, but the cost is reduced to $7.99 if you have 150 or more trades per quarter. They also have the option of a Global Trading Account that charges $19.99 per trade. e*Trade is offering a cash bonus for opening a new trading account by 12/31/15, but there is a minimum transfer of $25,000 to receive the cash bonus.


sharebuilder is Capital One’s investment company. There is no minimum opening balance and no maintenance fees. Stock trades are $6.95. They are offering a $50 bonus for opening an IRA with a $5,000 deposit.

TD Ameritrade

TD Ameritrade has no minimum opening balance and does not charge maintenance fees. Stock trades are $9.99. They are offering free trades for 60 days with a minimum opening balance of $2,000 and a cash bonus for opening deposits over $25,000.


I am not a day trader and not trying to beat the market. I will be purchasing dividend growth stocks. At most, I will be making a couple trades a month as I accumulate funds in the account. Therefore, I will not qualify for the lower trading rate with e*Trade. I will also not qualify for the cash bonus. However, the Global Markets option is attractive.

sharebuilder is the lowest cost per trade of the three options. I will also qualify for the $50 bonus.

TD Ameritrade offers 60 days of free trades after opening the account. If I plan on doing more than 5 trades during the first 60 days, that would be a more valuable opening bonus than the $50 offered by e*Trade.


I think sharebuilder is the best option for me. The $50 opening bonus plus the lower trading fees will be the most cost effective long-term. I may temporarily gain from the 60 days of free trading with TD Ameritrade, but the higher cost of trades will eliminate that gain over time.

Although I am interested in trading on the Global Markets, that is not my priority at this time. Maybe I will look into it when I finally payoff the student loan debt. As a Canadian citizen I could open an account in Canada that would probably be a more cost-effective option to trade on the Canadian market.

Do you have a recommendation? Is there something I am not considering that I should?