How We Save 50% on a Variable Income
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When I was still working full-time, my husband and I both had well-paying jobs in the same financial niche. As a dual-income household, we were making great money, but we were also spending a lot of money.
I’m sure many of you have lived that way before, too. Day care bills, a mortgage or two, pricey takeout when you’re too tired to cook, car payments and maybe even a boat loan thrown in make for an expensive life.
I Was Missing Something
Life was great, or so I thought. Not long after I had my daughter, I started to feel like I was missing out on way too much in her life. She would sob when I dropped her off at day care (which is like a knife to any mom’s heart), and by the time I picked her up so many hours later, we had to rush home, cook dinner, pop her in the bath, and our evening with her was over before I knew it. I felt like my little baby was only getting a handful of waking hours with the two people she loved the most, and it made me feel terrible.
I knew I had to do something, so I toyed with the idea of leaving my job, but that also meant a loss of half of our income, and the thought scared me. Having two incomes feels safe, having a variable income doesn’t necessarily feel so safe, and I’ve never not worked. I’ve always felt like I need to be contributing financially to my household because it’s what independent women do these days, but I kept having the nagging feeling of missing out on my daughter’s baby years. She was growing so quickly.
Two Separate Accounts
Once I decided that I wanted to quit, we buckled down and lived off of one of our incomes to see if we could swing it. All of my paycheck was deposited into one account and my husband’s was put in a separate one so that we didn’t have the temptation to spend both. We cut out a few spending areas that didn’t give any extra value to our lives (eating out so much, hair highlights, my Etsy addiction.) After a few short months, we realized that we could do it and that it actually wasn’t scary after all.
The next thing I knew, I was putting in my two-week notice, our day care bills were gone, and I got a grasp on our expensive grocery bills. Our living expenses were steadily plummeting, and it felt great. Somehow, though, I felt like we could do more, even with my loss of income.
Our Simple Budgeting Plan
We decided we wanted to pay off our house before our daughter started kindergarten, but in order to do so, we knew we needed to save like never before. Unfortunately, my husband hates to budget, so I had to come up with a different plan to get him on board.
Our solution was to take the same route that we did while I was still working. We had half of my husband’s check deposited into our online savings account and the other half deposited into our checking account. If that checking account ever gets low, we simply have to slow down on our spending for that month. I know that sounds too easy, and it is, but it honestly works for us.
Since we’ve been doing this method, we’ve never had to dip into our savings, and we were always able to add more money to our mortgage payment each month to get it paid off in a little over three years. Now that we’ve gotten that bad boy paid off, we want to take it up a notch. We are planning to adjust our percentages to have more money deposited into our savings and brokerage accounts and less money deposited into our checking.
Our Fluctuating, Variable Income
Let me assure you that we are not rich. Far from it, actually. We’ve never received outside financial help from family, we’ve never gotten a big windfall, and my husband isn’t pulling in a six figure salary. He’s actually paid on commission only, so sometimes we get small checks and sometimes we get large ones.
We never know what each month is going to hold financially, but we do know to keep a buffer in our checking account in case next month isn’t so great. If you want to save 50 percent of your income, it’s absolutely possible, even if you have an inconsistent income because that’s exactly what we’re doing.
There Are No Tricks
There are no fancy tricks to saving more money. You can read 1,000 blog posts about saving more, but you already know what to do.
My advice to you, if you want to get to the point to where you can save 50 percent, is to first build up an emergency fund even if it takes a few months for you to get there. Once you have a stable fund in place, start cutting areas from your budget that don’t really add value to your life (salon visits for fancy haircuts and color, pedicures, manicures, eating out, and buying new clothes for starters), and then work on paying off any and all debt.
This method is not rocket science. Keeping two separate accounts is just a remarkably simple way to budget, and it’s what works for us. If we can do it, you can do it.
Do you use a traditional budget? Do you track your savings percentage? Is there anything you could cut from your budget today? How possible would it be for you to save 50 percent of your income?