For an educator there are often times during the year when money can be a little short. I have written here before about how January and June are our worst months financially. Ironically, June turned out to be an ok month this year. Because of leap year it throws off the calendar for paychecks a bit. In June, typically, I will get a “normal” paycheck and then get another one filled with extra money because of extra things I do in the summer to earn extra income (e.g. I teach a couple of classes, do extra advising, try to get summer grants, etc). This year some of that extra money came in early. Plus, Mrs. ROB was able to secure a summer class for her teaching, plus some extra income she brought in.
However, that extra money in June comes with a price.
September is now going to be our worst financial month. Let me explain.
For new readers to this blog, Mrs. ROB and I are both teachers. During the school year, Mrs. ROB and I are paid on a bi-weekly basis. As a teacher, we have 9-10 month contracts. However, I am able to get my salary paid out on a 12 month basis, which is nice. Mrs. ROB does not. Also, Mrs. ROB teaches at multiple places, but is able to cobble together enough courses that makes her essentially full-time. So because of my contract being spread out over 12 months we always have money coming in, but it reduces the amount of money I get in each paycheck. Plus, Mrs. ROB has no income coming in really until September or at least the income that she is used to making.
Mrs. ROB and I start back to school in early September. However, she won’t start getting paid until the end of September. Moreover, any kind of extra dinero and money from extra classes that I am teaching also won’t come in until the end of September because of the way the payroll calendar is this year (we are starting school later this year than last year).
So what does this convoluted explanation mean?
It means that for the first three weeks of September we will basically only have my “normal” income. However, over 1/2 of our bills show up in the first two weeks of the semester.
So What Am I Going to Do?
Well, I have been thinking about this a bit for the past month and trying to plan for it. So I have been putting a little bit of money aside to deal with bills.
Additionally, I can delay some of our bills until later on in the month. Our electricity, car insurance, cable bill, etc can all be pushed off until the end of September (August is already done).
This extra money and that paycheck will be enough to pay our bills that come in the first three weeks (e.g. house payment, car loan, student loans). I will have enough for that.
However, food, entertainment, and any medical bills that come in will have to wait a bit. I am probably going to have to break out the credit cards.
I have been experimenting with a Fidelity Rewards card that gives me money back on purchases that I use for my Roth IRA. So far that experiment has been fairly successful. Most months I have paid off the credit card bill in full. However, there have been months (and August is probably one of them) when I won’t fully pay it off because of a lot extraneous expenses for this month. This month is nephew was born, it is my birthday, my anniversary, and my brother’s birthday. Plus, we booked airline tickets for a wedding and I booked a companion flight for my wife for a conference I am attending in Prague. We have had more expenses than anticipated.
I will pay most of it, but I would have to drain our emergency savings to pay the whole thing and I don’t want to do that. This isn’t an emergency.
This draws out my credit card a bit, but I should have it paid off by the end of September/early October once this income comes in. I hate that situation and I have to pay the credit card company interest, but it could be worse.
I hate getting myself into this position.
I need to have a bit more foresight and set aside even more money in the future. In fact, I think that needs to be an item in our budget.
It will reduce our “extra” spending money every month, but every year I am going to run into this situation until “normal” salary catches up with all of our expenses. By my calculations that won’t probably happen for another 4 years.
In the interim, we have to probably buckle down a bit more.