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Kid Free

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Not debt related, but had to share anyways as I am so excited…

Last night I dropped off my younger two at the local Christian camp for the week, and my eldest twin at a friend’s house a city away for the week.  Last Sunday, I dropped off the other twin at another TeenPact event at a local college campus for the week. Do you see where I’m going with this?

I am totally and completely kid free from last night (Tuesday) until Friday afternoon…KID FREE!

Do you know when that happens as a single, homeschooling, working from home mom…ABSOLUTELY NEVER!

I don’t know what all I am going to do with my time…but I know I will fill it.  And there’s not anything debt related I can say with this, but I will put this out there…

If you know a single mom (or dad,) a passing acquaintance even, it would really nice to offer her a break.  In my, granted biased opinion, being parent is one of the hardest jobs ever and while it is super rewarding in so many ways…I think every mom deserves a break every now and again, and us single mom’s, well we don’t get them.  So if you can…reach out to one, I promise you that it will make a world of difference to her spirit.

I will now step off my single mom soapbox and resume my debt payoff journey.


Monthly Income

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Remember when I first “auditioned” to start blogging, and I said our monthly take-home pay averaged $5,000/month?

Then, aside from that first month, our income has been WELL over the $5,000 mark and every month I talk about how this is very atypical and much higher than average. I have stressed this because I don’t want readers to think I was lying in my original post. I certainly was not. I track all of our income and expenses (even before starting to be strict about a budget), so here’s a little snippet of our (net) income for 2013 versus 2014 comparing the months since I started blogging here about our debt.

 

 20132014
February$3795$5465
March$882$7595
April$5232$8290
May$4883$10965

 

We had several months with abysmal income in 2013. I was still a graduate student so I made very little, and Chris’ income could fluctuate wildly. In March 2013 he actually had a net negative income for the month due to a myriad of business expenses, so our income was tiny. There were also a handful of months with income only in the $2,000ish range. By comparison, you can see that our 2014 income has been steadily rising every month. One reader asked a great question – “how will you keep your income up?” I want to address that here.

There are a couple important changes that have taken place that will hopefully provide a big positive impact on our income. First, I’ve already mentioned how I have taken on additional work. This is great because it has helped balance out some of the “ups” and “downs” of our unsteady income. Just as an aside, I did not get paid this month from either University A or University B (my two contract-based jobs). I’ve continued doing work but this is just a timing thing with the schedule of payments. But, instead of making nothing, I was able to bring home that giant paycheck I mentioned. So our income had a bit of a “buffer” even though I didn’t get my two regular paychecks. I have also continued to take on little side-ventures to earn a hundred dollars extra here or there. Everything adds up over time. So I have taken great strides to increase my income.

In addition to the pay I generate, my husband has also taken some strides toward increasing his income. Remember that he owns a small wood-flooring business. Until recently, it has only been him and one other employee and he has done everything himself (e.g., placing bids, doing scheduling, and completing the actual work). But at the end of March he hired two additional workers. Now he has 2 “crews” of people to complete jobs. Instead of only being able to do a single job at a time, he can be on a job with his “helper” (it’s called a “helper” in his field, but you could also call the person an apprentice or simply an employee), while another crew (“boss” and “helper”) works simultaneously on a different job. By being able to work on multiple jobs at a time, my husband has increased his business profits and has started bringing home additional money.

Nothing is guaranteed and things can certainly change. For instance, all of the research I do for University B is grant-funded by large government grants. When the funds are gone, they have no way to pay me. So far, they have excelled at obtaining grants so my work has been steady, but there is no guarantee of future work

And my husband’s job has even more potential volatility. The second crew he has working for him currently have been great. They do good quality work in a timely manner and my husband has been pleased with their progress. But, without going into too much detail, my husband had tried to expand his business once before (about two years ago), with disastrous consequences. He hired too many people too quickly and was unable to oversee everyone properly. People did poor work and it ended up costing my husband thousands of dollars to replace entire floors (since he warrantees his company’s work). This was a painful lesson to learn. He had to let everyone go (except his one “helper”) and go back to a small 2-person business. He’s trying not to repeat mistakes and this time around he took great time and care to select a skilled and highly qualified person to run the second crew. So far there haven’t been any problems, but there are still no guarantees (and, of course, even good employees can always quit or leave, so even if the crew does good work the income generated from them is still not guaranteed).

Where does this leave us in terms of our income?

Well, we’re not really sure what our new monthly “average” income is. The plan is to continue operating based on our standard budget, which assumed we made only $5,000/month (although, note, we have increased money allocated toward debt and savings so our total budgeted expenses actually amount to $5272/month). The hope is that if we can keep our spending down and continue bringing home a larger-than-usual income then we can keep funneling extra money toward debt every month.

For reference:  Our new budget (reflecting some of the changes mentioned this morning)

PlaceFunds Budgeted
Rent1055
Electricity150
Water75
Natural gas25
Sprint (2 lines)115
Cable/Internet85
Car Insurance90
Health Insurance350
Trash35
Debt1697
Miscellaneous250
Groceries380
Baby Purchases600
Gasoline100
Saving for Irregular Expenses265
Total Budgeted5272

What does all this mean for the month of May?

We did well! Best month on record for our pay! We earned $10965. Subtract $8967 (for our expenses…note this is a hugely inflated number due to massive debt payments, plus going over on our monthly envelopes), and we are left with $1998 surplus for the month of May. Two things to note:

  1. This means I don’t have to dip into June money in order to “pay myself back” for the huge payment I sent to Wells Fargo in May (recall that I had sent a huge check and thought that if our May surplus wasn’t enough to justify it, that I would use funds from June to “pay myself back.” Since our income was high enough in May, I won’t have to dip into June funds to cover this money).
  2. Even after paying a HUGE quantity toward debt, we still have some excess to the tune of $1998. Guess what guys….this means BoA is 100% for sure GONE this month! I currently owe $2154. I have the $1005 regular payment + I can use $1149 from the May surplus to pay off Bank of America in full. I’ll still be left with an extra $849 that I believe will be sent to savings (though it may also be allocated toward debt. Need to have a budget meeting with the hubs).

I cannot believe I am so close to being credit-card debt free!!! This is a huge accomplishment and one that deserves a bit of celebration. I talked to my husband about it and although definitive plans have not been set yet, I think we’re going to take a mini-trip to visit family in Utah for 4th of July. My Dad has been asking us to come and graciously offered to cover gas money (plus allow us to stay with him, instead of getting a hotel). With gas covered the costs would be relatively minimal. The largest cost would be in missed work for the husband (although, he does have that second crew now, so he will continue bringing in at least some income). We’ll discuss the details, but I think we may plan that as a celebration of being out of credit card debt. We still have a LONG way to go until we can say we’re totally debt free, but this is a big milestone and I want to celebrate it in some way. A short family trip to Utah seems like a good way to do it without breaking the bank.

Whew! That was a long one! If you stuck around the whole time you deserve a gold star!

Give me your thoughts!

Our variable income has been on the rise. How/when would you conclude what your new “normal” is? If we can say “we now make an average of $6,000 or $7,000 per month” (or whatever) then we can allocate more funds directly toward debt (rather than waiting until the end of the month to make snowflake payments). How would you handle this? How long does it take to determine our new normal?