Spring is here, B-B-Q’s have been lit up and summer’s just around the corner. Kids are starting their summer activities, whether it be swimming, soccer, football or some form of baseball. I’ve been thinking about the latter as I review the series of financial events that delivered us to this point in our season. There were a number of ups and downs that I consider curve balls that we needed to ‘deal’ with and not lose our drive. So it made sense for me to use baseball terms to relay to you how my winter – spring financial season went.
The Home Team
My husband’s income is variable, based on the demand. He is a real estate appraiser, so swings are inevitable based on the time of year and the market. Normally, he does receive enough bread and butter engagements to meet a minimum – moderate level of income and that is what I base our debt repayment plans on. The idea being that it should feel like we’re playing T-ball. The figure I use for this is $2,400 per month, which gets paid in two installments, the 15th and last day of the month. He gets paid one month in arrears, meaning he gets paid next month for the work he did this month. Therefore I know now, what his income will be for June, as an example.
Basically, as part of the battery, all of his income and some of mine goes to debt. Anything he makes above that budget amount is a bonus baby which we also apply to debt to help us meet our goals even sooner than our five year plan. Usually, we are able to stick with this as I have all foreseen expenses budgeted (including car repairs, etc.). However, I don’t move unspent budgeted money that may be needed later into a separate cash account. Maybe I should, because it can get messy and feels like we have a dead arm, when all of a sudden we do have a big bill, but I’ve already skimmed off the money and applied to debt.
So looking back to the beginning of the year, January was a tough month, because he had not one engagement last December – a strikeout. So there was no money coming from him for January. That was our first curve ball. Debt repayment goal could not be met, or at least not fully. I scrimped together $1,000 from some actual and anticipated expense savings whilst declaring a bean soup and scrambled eggs on toast menu plan would get us through the lean winter months. That $1,000 payment felt like damage control. As the umpire, I had to watch the game closely, even if hoping the home team could steal a base to regain control of the game.
Then I got small hit on a curve ball, when he told me he could give me $2,000 he was saving in his business account which was for an upcoming annual business insurance premium of $3,100 due soon. We decided we could put the insurance on the credit card giving us one extra month to pay and gaining cash back points, and hopefully business would pick up and we’d be in for a bit of slow pitch now that the Christmas season was over. He never could explain what happened in December. Normally it does slow down, but it has never come to a shutout like it did for him in 2013. He did, however, land a large contract for the city which we could count on down the road because it wouldn’t pay out for a few months.
Regular Season Begins
Well that softball turned into hardball pretty quick when we saw that January was not looking very good either. He ended $1,100 short from our minimum goal. With two away and two down, I was starting to get kind of panicky. I had slowed our debt repayment, but we were committed on a low rate cash transfer credit card that needs to be fully paid by August of this year. We had put a $24,700 lump sum against our 2.89% mortgage debt last Sept, planning to pay the 0.99% credit card off at $2,250 for 11 months. Yes, I know this is just swapping debt for debt, but was at a lower interest rate and with no transfer fee. It seemed like a good idea since we were planning to make prepayments of more than that amount monthly. Of course, we had no foresight of the earnings slump that was to come.
We were window shopping for strike 3 near the end of February when it looked like his income for that month to be paid in March was going to fall $700 short from our @2,400 target. Not only that, but now we had an over $5K Visa payment due in early March (remember the $3,100 insurance above) plus $2,700 of first installment of property taxes due in March. Normally I put $450/month in my Emergency Fund each month to build up enough to cover property taxes. Well, with robbing Peter to pay Paul, that didn’t happen, and things were getting very precarious, indeed!
The Losing Streak
What did I do? Bring in a pinch hitter? I scoured the internet looking for part-time job possibilities and while I was doing that I turned into a blogger. Overnight. Magically. Just like that.
I had no knowledge of the term side hustle. I didn’t think I had the stamina to work 2 shifts per week at Shoppers Drug Mart after a brain draining workday. I also decided early on that making money at blogging would, for me, be undoubtedly very difficult. And yet, I was incredibly stressed and needed somewhere to unload. So a blogger I became.
I dug-out our Emergency Fund. I know JMoney says No Touchy! but we were dealing with a job loss of sorts (hey, where did all the fans go?). That is what your E-fund is for. Unforeseen events that you have no control over. Okay, broken washing machines and vehicles kind of are too, I’ll give you that. But hypothetically we are supposed to have a separate maintenance/stuff breaks fund to deal with that. Some of us do not, but choose to keep our E-fund nice and high to cover that as well. [Future post coming during the championships about how I plan to increase my Emergency Fund and why.]
Regular Season Ends
Then we hit two home runs in a row. The first was a due to a change-up with a family member and it was an out-of-the-park HR. My husband is a licensed realtor and acted as agent for my sis and BIL to buy a new home and sell their existing home. He had not intended on charging them any commission and in turn, return to them the fee he received from the purchase of their new home. They insisted that we keep his earned commission from the purchase and in return for not taking a commission on the sale of their home they wanted to take us on a cruise (which we gratefully declined).
So that $4,000 yacker saved our home game and I started to relax a bit. Our second inside-the-park home run was that my husband’s March income exceeded our target by $1,600. This was because of the completion of the large contract that he had been working on for a couple of months. The regular small housing jobs were coming in, but at a rate lower than last year. It was hard to say if business would increase to the same levels as before. I might need to revisit my @2,400 / month projection if this continues.
I still kept blogging, as I soon realized I still had a lot to learn and I also had a story to tell as part of the Hot Stove League. Maybe, just maybe, I could help others and maybe, just maybe, I could develop my blog into a retirement side hustle of my own.
As we enter the seventh-inning stretch I see that I need to examine my slugging averages more closely because although the actual income has finally caught up with planned income, my Emergency fund is still $2,100 lower than it should be. I can account for $1,100 of that being the passed ball shortfall in the insurance premium that I had not budgeted for plus $450 of missing tax savings that I did not fund one month when I was doing a suicide squeeze.
If I can continue to play ball, the plan is to pay $2K per month to the low rate credit card to have it knocked out of the park before the interest rate goes up ($6K – 3 more payments to go). I’m not sure if I will deploy this strategy again, as it certainly has been a nail-biter. I may just decide to become a patient hitter and just pay any excess towards debt as it comes so I don’t stress myself out so much.
Now I’ve got some good news about breaking balls and some bad news bears to share as we head into the wild-card playoff. What d’ya want first? Okay, the bad news it is – as in a grouch Uncle Charlie of My Three Sons curve ball when I received something in the mail yesterday. I saw the word Justice on the envelope thinking it was a call to Jury Duty as I quickly tore it open only to find a RED LIGHT CAMERA SYSTEM OFFENCE NOTICE for my car which I was not driving on a particular day in a certain area to the tune of $325. Ya, sucks the big ball$.
So that somebody, who shall remain nameless, worked his a$$ off this month (as luck would have it) and will bring in ticket sales of $3,200 next month which is $800 greater than minimum plan. So two things we learned here folks – housing market is moving again in Canada and don’t run red lights when you’re debt wrangling or playing a perfect inning.
To mop up this post, I must confess that I knew little about baseball. Just like me, you can learn how to manage your finances better too! You just need to get in the game, define your level playing field and don’t stop short when things don’t go your way and you’re down and out. Home plate will still be there, even if you need to round the bases a few times. It’s practice and green lights that will get you the Commissioner’s Trophy and make you a champion of the series in your world.
Images courtesy of flickr.com
Baseball glove / Andrei Niemimäki
T-ball / Chris Harrison
Baseball pitcher / Ralph Arveson
First base / Jonathon Assink
Baseball field / JACoxwell
Baseball batter / Eric Ward
Slide into base / Sherri Abendroth
Home field / Sherri B