With my husbands new job we should have $500 to $1,000 extra a month to throw at our debt. I’m going to wait until after the holidays to do implement this plan. I know I’m making more excuses but I have property taxes to pay next month, Christmas gifts for the kids, and I’m unsure of what type of payment schedule he’ll be on so for right now I’m spending as little as possible, only necessary stuff. Thankfully we have a one months ++ cushion in the bank, I don’t know what we’d do if we didn’t have that money there. He’s going to have to bill his time to the company he’s working for and I’ve got my fingers crossed that they pay promptly. I guess we bill once a month? Getting used to being paid once a month is going to be hard to get used to but the extra money every month will ease the adjustment.
I’m struggling already with myself wanting to spend more money. I keep thinking, oh now we can afford to buy a new TV (ours is over 10 years old but works perfectly), or we can afford to eat out more, etc, I think you get it. Basically, I feel like buying all the stuff I’ve been wanting but don’t need. I know I can’t fall into this spending trap, even if its only spending with cash. I need to concentrate on just paying off what I have and then building up our savings some more. I can tell I’m going to be struggling with our spending every time we go shopping but I need to stay strong, on track, and pay off all this stinking debt.
{ 2 comments… read them below or add one }
Sammy 11.11.08 at 11:09 am
I totally get what you are saying. I am the same. These days I don’t go near the shops unless I REALLY have to. The temptaton is simply too big and my resistance too low…
Sammys last blog post..Findsavings.com - A wonderful site for online savings!!!
maria 11.11.08 at 12:00 pm
Generally speaking, you can bill clients at whatever frequency you agree upon. It’s usually built into the contract, so you and your husband should look there first. If the contract doesn’t specify, I’d recommend him talking with the client to find out if they have a system in place or if your husband can easily set his own billing schedule.
I am not sure what industry your husband is in, but I know that in my own, the payments aren’t like clockwork for all clients. I usually send a pay within 30 days invoice at the end of the project, which is standard in my field. If I haven’t received a check within 40 days, I start following up on it with my main point of contact. That usually resolves it, but sometimes it takes awhile. The latest check I ever received was about three months late, though I do currently have one client who (unfortunately) is about beat that record.
You may already know, but just in case– your husband will probably owe taxes in January if he receives any payments in 2008. Quarterly self-employment taxes are due in April, June, September, and January. They can be big, so it’s worth preparing for them ahead of time.
I know that it’s hard to resist the urge to spend, but my own two cents is that you really, really need to build up your emergency fund before you buy anything special. One month or even one-plus month wouldn’t be enough of a cushion for me. What with accounting hiccoughs, project cancellations, and different billing cycles, I’ve gone as much as four or five months without receiving a check at all. And then receiving a big one… but without funds to draw upon during the no-check times, I wouldn’t have made it to the big check at the end. Maybe things are different in your husband’s field, but think about it? Decent cash reserves can mean the difference between thriving and failing when you’re self-employed.
Best wishes to you both, and congratulations! Despite the financial vagaries, I really love being self-employed, and I hope he does, too.