Blogging Away Debt Our Journeys to a Debt-Free Life

by Ashley

Well, it’s happening. Remember how my first few months blogging I kept saying how unusually high our income was? Those first few months we were making in the $8,000-$10,000 range (crazy high! Highest months of income in our lives!), when our average had previously been closer to only about $5500.

Although I knew we wouldn’t be making that much forever (husband is in flooring and the flooring business is cyclical – busier during summer months and slower during winter months), I was not expecting the slow down to start until November.

Through a surprise turn of events, our income was quite a bit lower in August. This is the “fun” part of owning a small business. Four things happened that negatively influenced our income:

1. Some of husband’s jobs were canceled or pushed back.
2. Husband had a few large business expenses for flooring equipment that needed to be replaced.
3. Husband had to do a warranty repair that cost him in materials and labor (for his time and to pay his employees for their time), but didn’t result in any income since warranty work is free for customers**this was the most painful in terms of monetary value.
4. I didn’t get paid from my teaching job (due to regular schedule of payment). **this is where the majority of my income is from, so this was a big hit, too.

September would be so much better, we both believed. Husband has a HUGE job this month that pays out quite nicely. In addition to that, he has been busy with all types of regular-sized jobs, too. He’s back to working non-stop, though we’ve come to an agreement that he will always take Sundays off (thus, working 6 days a week maximum). So surely this month would be a jackpot in terms of our income, right? RIGHT???

Well, I’m a little nervous. Thankfully, I got paid from both of my jobs this month. However, husband is certainly the primary earner so huge income fluctuations are generally due to his income (or lack thereof). And, as it turns out, husband has run into some problems this month, too:

1. For his super-huge job, he’s had to purchase a higher amount of insurance (this doesn’t affect our monthly budget since it comes out of his business account, but it does factor into the amount of money he’s able to give me for “income” during the month).
2. He’s had to purchase separate auto insurance. His car used to be on our family policy and was categorized as a business vehicle. But this big job requires that he have a separate commercial auto policy due to the expensive materials he will be transporting (required coverage of a million dollars in property damages!!!) This will actually positively impact my monthly auto insurance budget because his car has been removed from our family policy. But, again, it’s an expense he pays for, which means less money coming to me in the form of income. ***Note, I actually think I prefer for his auto to be separate. I think it will make taxes easier to have it as a separate policy, though it makes us lose our multi-car discount. Anyone deal with similar issues? Think its better to keep these separate? After this big job is complete, he has the option to move his car back to our family policy if he wants. Any thoughts or suggestions of which idea is better from a business/tax perspective (keeping separate or re-combining)?
3. Husband does not get paid until jobs are 100% complete. This month he has been KILLED on jobs that are unable to be completed. This happens from time-to-time. A customer may not order enough materials or, more commonly, there aren’t enough transitions or the transitions are the wrong color. Husband can work for two weeks straight and be 99% of the way through, but if he’s short even a single transition or t molding, then he can’t collect payment. And often, these pieces take weeks or even months to be delivered from the big distributors (and this often causes a headache because the dye packs are different even though it’s the same basic color, so then even more need to be ordered and it’s a whole cluster). ***THIS is what is hurting us this month. Husband has 3 separate jobs that are 99% complete, but he is unable to collect final payment because he’s waiting on little pieces to come in so he can install them, complete the jobs, get work orders signed, and collect payment.

It’s a bit of a nail-biter this month. Even though hubs has been working diligently almost daily, he’s made very little money this month…..even less than last month (gulp!!) We do have my pay that helps to off-set things a bit. And there’s still a few more days in the month (and supposedly transitions should be here soon). We’re holding our breath and crossing our fingers, hoping these pieces come in so he can complete these jobs and receive payment. Husband was looking at his various jobs last night and calculated that he has close to $10,000 sitting in nearly-completed projects. Of course, the full $10,000 isn’t income because some of it goes to recoup his business expenses, pay labor, etc. But a significant chunk of the money would be coming straight to me as income. And, instead, it’s hanging out in space making us nervous as crap.

Cross your fingers for us! Oh, the joys of being a small business owner.

Side note: it’s times like these that I am so glad we have a decent sized emergency fund and live on last month’s income so that if these payments don’t come through until October, at least we won’t be completely broke. We still have money and will NOT be in danger of having to pay for groceries and gasoline on credit (as we have done in pre-blogging days). Thankful for that!

Ashley

Hi, I’m Ashley! Arizonan on paper, Texan at heart. Lover of running, blogging, and all things cheeeeese. Freshly 40, married mother of two, working in academia. Trying to finally (finally!) pay off that ridiculous 6-digit student loan debt!