You wake up thinking about it," says Wayne Stoneback, who works in real estate. "You go to sleep thinking about it. It affects everything—what you eat, what you drive, everything." For 20 years, Wayne and his wife, Sherri, have dealt with an income that fluctuates with the housing market. If houses sell, he does well. If they don't, he and Sherri had better have a stash of cash.
They're not alone. Today's economy means more people are self-employed or working on commission. Coping with a variable income stream is a way of life for them—and often a difficult one. If you and your spouse are among those living with fluctuating finances, here are some ideas that may help.
1. Treat yourself as both employer and employee.
Financial expert and author of Debt-Proof Your Marriage, Mary Hunt recommends couples with a variable income stream treat themselves as both employer and employee by drawing a strict, bare-bones monthly salary from the business account. If you make more during one month, leave it in the account to cover your salary during lean times. If you don't make enough to get a salary at all, ask yourself, "Is this self-employment or a hobby?"
With Mary's method, you're being paid the bare minimum, so hopefully your reserves are building. It's easier to live frugally if you know you have options. If you control what's going out, you'll find it easier to say no to extraneous expenditures such as eating dinner out.
2. Decide together what expenditures are important.
Don Pennell, a commission-only salesperson, and his wife, Donna, decided they needed to simplify their life. They worked together to determine which expenditures were important to them and which weren't. "Do you want a new car or a vacation?" he asks. "Do you really need all those phone options?" For them, having their daughters in a Christian school is important; cable TV and gourmet meals aren't.
3. Unite as "one" employee.
Six years ago Mary Lou Katz and her husband, Gary, who installs TV facilities on a project-by-project basis, decided to get out of debt. They agreed to use cash only—no credit cards—and to save whatever they could. One day Gary charged $200 stereo speakers on their credit card. When Mary Lou found out about the expense, she and Gary had an argument, ending with Gary telling her he didn't agree with her strategy. Within a week, the transmission on their van went out and cost more than $2,500 to replace. Those speakers Gary charged didn't seem so great to him then.
Mary Hunt suggests that couples with variable income consider themselves united as one employee. "If both partners aren't 100 percent on board, there's a lot of pressure." You can start blaming and resenting each other, especially if one partner is a spender. The debt can add up quickly. Agreeing gives you a stronger chance of using your money wisely.
4. Set long-term goals.
As the Katzes discovered, getting on the same page about finances is important. Director of Everyday Steward, financial consultant Jeff Chinery, says, "Don't make decisions without counsel or accountability [to each other]." If you and your spouse don't agree, the resulting divisiveness can harm your marriage.
To help you make decisions together, spend some time developing long-term written financial goals. "Pre-plan for the shortfall and the windfall," says Jeff, "so when money comes in, you know what to do with it." Setting goals ahead of time—such as developing a realistic plan, covering quarterly estimated tax payments, and working on savings—can help you make wise decisions as you go along.
5. Don't forget those taxes.
One of the absolute first things you and your spouse need to do is set aside money for taxes, says Jeff Chinery. Check out the irs website (www.irs.gov) for information, or consult a tax professional. Chinery urges clients to allocate funds in this order: giving (tithe), taxes, debt, savings, and then spending. The key is making sure you don't neglect a necessary category.
6. Keep making payments.
Most people with a fluctuating income struggle with debt. If you do, make the minimum payments. If you can't do that, contact the creditors to see if you can avoid penalties if you must miss a month. Take care of home and auto debt first—credit card debt can wait if needed because it's unsecured.
7. Be vigilant about spending.
With a variable income, "you can't control the income, but you can control the outgo," says Sherri Stoneback. She and Wayne determine the bare minimum they need each month, and then figure their budget on a monthly basis. For example, they know they'll need more cash during certain months, such as December for Christmas shopping and April for tax time.
To help them track their outgo, Wayne and Sherri have created spreadsheets for both their business and their home. They document all their spending, including debt and credit cards, and keep a close eye on it. In addition, Donna Pennell suggests writing checks with your mate "instead of one person bearing the stress."
Other ways the Stonebacks have learned to control their spending include using budget billing for utilities and making monthly payments on bills that come in big chunks, such as insurance. They also suggest saving up until you can pay cash for a purchase—even a car.
Working closely with your mate and trusting God to provide and guide along the way will help you deal with an income that fluctuates more than you'd like. You may have your tiffs over money now and then, but keep reminding yourself that working together and trusting God—knowing that he will take care of you—is a great way to live life "on the fluctuating edge."
LeAnne Benfield Martin, a freelance author, has been married two years. http://christiansinthearts.blogspot.com
Copyright © 2007 by the author or Christianity Today/Marriage Partnership magazine. Click here for reprint information on Marriage Partnership.