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.1