Extra bills, unplanned purchases, and a short check: The potential makings of a financial storm.
Yes, this is how our month has gone so far. We took yet another hit when hubbies last check was short. Groan! He has a very irregular paycheck and depending on what time in his pay cycle he comes home, it causes his check to be one of either feast or famine. Needless to say, when you are digging out of debt, the latter is never a good thing!
As for the additional bills, we had the expense of the trip I took to see my family, the added car insurance, hubbies glasses (an absolute must!), and to top it all off, we finally got the bill for the snowplowing which was also higher than expected. I blame that one on Mother Nature for hitting us harder with a lot more snow this year. Next year I intend to be better prepared in that area. The unplanned purchase? The chainsaw, but I think we may be able to recoup that “investment” by hubby cutting up some of the downed trees we have on our land. We had intended to have two more loads of wood delivered in June, but will now reduce it to just one load.
With our bills not aligning with a paycheck of a feast, we had no choice but to dip into our savings. On the bright side, I am very thankful we had the funds to cover our expenses and pay all of our bills on time. Had we not continued to add to savings, these costs would have completely exhausted our emergency fund. Still, I’m not too happy that we even had to go this route.
Robbing Peter to pay Paul can be a vicious cycle. While we intend to repay Peter promptly with our next check, we are striving to avoid ever needing to do this again. Some people refer to this as living on last month’s income. The potential financial storm we faced showed me the importance of doing so. Had more money already been in our household account, any additional transfer out of our savings could have been avoided all together. The problem is, how do you even go about putting this in place when your budget is already pushed to the limit?
Here are some of the things we have been doing to help us reach our (as I like to call it) Peter and Paul fund.
- Made saving a priority and do so on a regular basis. We have continued to save an additional $50 each week.
- Side hustle which can be anything that creates extra income. My seasonal job is just that. At first, we were going to use it all for debt, but our Peter and Paul fund has since become an equal priority.
- Make your money scream for mercy. Squeeze everything you can out of it and then save, save, save!
- Create sinking funds. Not familiar with them? Sinking funds are basically setting money set aside for irregular expenses (like car tags, license renewals, tax bills, snowplowing, etc.). Admittedly we are still struggling in this area. I had hoped to add to this account this month, but with everything we cash flowed, it isn’t happening.
Budgeting isn’t exactly rocket science, but sometimes it is easier said than done. With all the “save for this, save for that, pay this, pay that,” I often can’t help but wonder how we even made it this far in life! Obviously, we didn’t do well, but thankfully somehow we did manage to survive! We are only into our fourth month of religiously budgeting, and I honestly understand how it might cause a person to at this point, just give up. Rest assured, we won’t! We didn’t get ourselves into our financial mess overnight, and it is going to take some time to dig ourselves out. We are still far better off than we were when we first started. April has been rough, but we have learned from it. Our biggest lesson is that with such irregular income, continuing to save must remain a priority. In the past, the very lack of savings is what would make us reach for a credit card. Thankfully with having savings to get us through rough patches, we no longer rely on credit to make ends meet.
Have you ever robbed Peter to pay Paul? If so, how did you overcome the need to do so?
You’re not alone.
I just got hit with a $1085 property tax bill that was supposed to be billed to me in 2016 but because of a mixup, it’s due in 2017. May 10th to be exact. How does one come up with that? Savings, of course.
Then hubby got a medical bill in the amount of $3316. How in the world do we come up with that one? I called the medical company and there is another mix up with DH’s medical insurance, so they are resubmitting it. I have no idea how this one is going to wind up with us owing.
And this came about just as I was starting to re-save money again into our savings account. I had a goal of $3,000 but guess what? Might not be happening.
I just take one day at a time. Try not to think about the future so much. And do my best.
I have good intentions, as we all do but as they say: it’s always something.
Hang in there.
You’ll get through it.
Thanks, Cindi. Things like this are the very reason a person should not stop saving. You can *think* you have every bill accounted and planned for, but things still have a way of coming up. I hope you get the medical bill straightened out. Property taxes are what they are, but a medical bill caused by an insurance mix up, not so much.
Some months don’t go quite as planned, but you are still making progress! I always looked at anytime I didn’t have to add to credit card debt and was able to draw from savings as a much better position then previously. Keep working on it. Income that varies from paychecks is hard. I always hated all our years when DH was self employed. It made it impossible to budget. There were some months he earned nothing at all because all his salary would have to stay in the business to cover some big repair or something..or we’d have to borrow from our line of credit or credit cards. It was a never ending cycle we just couldn’t get out of no matter how hard we tried. So glad to be done with all that, even if we did have to go through bankruptcy to get out of it.
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That is what I keep telling myself. Budgeting with such an irregular check is near impossible, hence wanting to have more in our household account to cover the shorter checks. It will take time, but we are making progress.
I think if I were still trying to get out of debt and still on a variable paycheck I’d first build up a savings before paying down debt. (knowing what I know now). The constant “murphy’s” that came up and no savings were so stressful – more stressful to me than the actual debt. So, if I had to do it over again I’d save as much as possible first to give me the cushion I need and then start tackling the debt. Probably not how the experts advise, but I’ve learned I function better when I lessen the stress triggers.
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That is what we are working on. This past month really showed us how much we need to do this. Had we not had our savings to fall back on, I know we would have been pulling out a credit card. Irregular checks can cause a lot of added stress!
We have had a crazy time financially recently too! We managed not to take on any debt (we only owe on our mortgage). However, recent events make it hard to pay extra down on that and get it paid off. I hope things take an upturn for both of us!
I guess some months are just tough for whatever reason. Congrats on only having a mortgage to tackle. I’m looking forward to that day! Meanwhile, bring on May and hopefully a much better month!
My whole life has been robbing Peter to pay Paul, I am very adept at it. But learning and doing better.
We’ve done far too much of this ourselves, even before deciding to get our finances in order. Just makes me sick pulling from our savings. Certainly a learning process!
Tough times indeed! Me and my family even resorted to selling one of our vehicles. It helped sort out a lot of financial problems and in the end I’m really glad we did. Sometimes you have to let go of unnecessary things and look at the bigger picture.
You are doing whatever it takes, and I commend you for that! I agree about looking at the bigger picture. Doing so can make things look much clearer.