Blogging Away Debt Blogging Away Debt follows real people on their journey to debt freedom — with tips on the debt snowball, budgeting, cutting expenses, and staying motivated.

by Ashley

The average household income in the U.S. in 2014 is somewhere between $50,000 and $55,000, depending which source you look at (median = $52,000 here, but nearly $54,000 here). Given these numbers, our household is doing really well!

Remember when I first introduced myself and my debt situation?

I said at that time that our income averaged about $5,500 per month (after taxes). Only….as soon as I’d hit “publish” our income went sky-high. In the following months, things shot up and we were able to make some seriously hefty debt payments as a result. I created a little table below.

Table Note:  This is a little confusing so  here’s some explanation. When I first started blogging I would make a debt payment at the beginning of the month (called my “regular” payment), then make an additional payment at the end of the month with leftover money (called my “surplus” payment), so April through June all had 2 debt payments. In July and August I saved the surplus money as I tried to transition to living on last month’s income. September was my first full month living on last month’s income, so the surplus payment disappears since I knew exactly how much money we’d have for the month and, therefore, did a zero-based budget where we weren’t left with any surplus funds at the end of the month.

This month (November) I told you that our income was $5855. This is almost half of what we made in May-July! What’s happened? And, more importantly, how do we get back to those super high-income months so we can continue smashing our debt?

I’ve been studying my budgeting excel spreadsheets to try to determine what is causing such a huge variation in income. And, like most things in life, it seems to be the confluence of many factors.

A lot of it was my pay.

• I received a large check for a project I’d been working on (unrelated to either of my current job situations).
• Over the summer semester I received my teaching pay in two lump sums (in June and July), whereas in Fall and Spring semesters the money is spread over four months.
• Due to various issues I won’t delve into (mentioned here), I haven’t received a check from my research job for work completed in August, September, or October. The check(s) is/are forthcoming, but for those months my pay was slightly lower than usual since I wasn’t getting paid from this job.

And the rest of it was due to my husband.

• My husband is a small business owner (he does hard wood floor installation). He has two crews of people doing install work. In September, he had to let his second crew go. This was a very tough decision and, obviously, negatively impacts our income. I won’t go into details for privacy sake, but I will say that this was not entered into lightly and there was a LOT of talk and negotiation before the decision was made that he would have to part ways from his second crew-leader.
• Some unfortunate business expenses came up:  a costly repair that had to be done, some pricey equipment that had to be bought, and payroll for jobs that were net negative (i.e., for the repair work). He has business savings that were able to compensate for some of the expenses, but some of the expenses had to come from his current earnings (meaning, less money for income during those months).

So, how do we get our income back up into that super-high range where we can be putting 60+ % of our income toward debt? Those months where I was paying $5,000+ toward debt payments made such a HUGE boost psychologically. I want to get back to that place! If we do, then we could eradicate our debt so much more quickly; its so encouraging to really see those debt numbers fall so rapidly!

The first target is to increase my income.

I asked my teaching university boss if I could take on an additional class in the Spring (to be honest, I asked if I could have TWO extra classes, but I was told there wouldn’t be enough to go around). Although I haven’t signed the paperwork guaranteeing me the extra class in Spring yet, let’s just say that I’m cautiously optimistic (knock on wood!) I was supposed to have an extra class this semester, too, but it was cancelled due to low enrollment, so this is a “wait and see” type thing.

In terms of my research job, I expect that I should be paid for my time (for work from August-October) sometime this month. I don’t feel comfortable divulging too many details, but this job and relationship is a bit tenuous. Rather than trying to look for another way to supplement my income (finding another part time job or something similar), I’ve decided to devote any extra time right now to applying for full time positions. If nothing turns up this hiring season (meaning, if I don’t land an academic job starting in August 2015), then I will move my attention to longer-term alternative solutions to earn income. Right now I don’t want to distract myself with something short-term just to make a little extra money at the expense of a potentially very lucrative long-term career. I need to keep my eye on the long-term prize.

The second target is to increase husband’s income.

In reference to his second crew, husband took his time and found someone who has just started working as a crew boss for a second crew. This is still brand new but so far things are going well (though turnover tends to be high in the first few months, so fingers crossed that things work out). This will help boost income a bit.

Then, here’s where things get really hairy.

Husband’s only other real way of boosting income is to continue growing his business. He has several big retailers that he does contract work through and would like to get to a point where he sits in the showroom making sales and doing customer bids all day (leaving the install work for his crews to complete). To make that financially possible he needs at least 3 crews running at all times. He has 2 crews currently, but that includes himself and a helper as one crew so he really needs 2 additional crews to be able to quit doing install work himself.

Enter:  dilemma.

This is the hard part of having such an unpredictable future. Husband could bust his butt to try to build things up and then we find out I’ve landed an academic position and we’re moving in July. We have no way of knowing what the future holds. Regardless, Winter is not a great time to build up crews of people since business traditionally slows down around the holidays. But come Spring (right when I’ll hopefully be interviewing), husband has the choice to start advertising and trying to hire more people. I’m not sure what we’ll do at this point. I want his business to be as lucrative and rewarding as possible. But I’d also hate for him to work so hard to try to get to right where he wants it….and then we find out we’re moving.

Anyway, when I started off writing this post I wasn’t intending for this to take such a philosophical turn. I just wanted to do a little analysis of our income and to try to analyze how we can get it back to such a super high range. I guess the answer, to some extent, is simply time. Hopefully I’ll be making more money come Spring. Maybe I’ll land a job and make even more the following Fall. Husband’s job could really get booming in the Spring. He could hire more people, get more crews running, and transition to office-only by Summer.

I guess only time will tell.