Newbie - seasonal income and DR

**guavapure** · 03-21-2011, 01:49 PM

Hey all,

Great forum. Looking forward to learning a lot and hear some success stories.

I want to do the DR program but am looking for pointers on how to tackle it. I work full time year round and my wife is an adjunct professor who brings home income Sept-May. The summer months are difficult, and is where we rack up debt. We've been committed to simpler lifestyles and I think with our belt tightening we can get through the summer by not accumulating anymore debt (have about $3,000 in savings planned for these months), but I'm just not sure how successful we'll be tackling debt this summer. She brings home $1800 per month that we won't have in June/July/August. Now daycare of $800 per month will go away, so the net minus is -$1,000.

I am ready to start the snowball, but don't know if it is wise to do it now or wait until September. Our revolving debt is $14,000 and I want to start hammering away at it. I know i can make a decent dent for the next 3 months, but then what do I do once June hits? Do I go back to minimum payments until September?

Just wondering if anyone else has successfully done the DR program with seasonal income implications. Thanks in advance!

**Ashley01** · 03-21-2011, 02:02 PM

Could your wife take in a child or two for the summer you should be able to make 1000$ a month doing that and with school being out full time working parents are always looking for Childcare. If you made the extra money you wouldn't have to worry about cutting back in your snowball.

**MsMarieH** · 03-21-2011, 02:16 PM

That was my thought as well - for your wife to look for alternate income during those three months.

I'd be inclined to build a bigger emergency fund to cover the costs of those three months since you know for sure they are coming.

**guavapure** · 03-21-2011, 02:20 PM

Thanks for the replies.

I hadn’t thought of the daycare option. That is a good idea. My wife is also trying to land a summer class, but they are hard to get. Keeping fingers crossed that she gets lucky.

**Ceashels** · 03-21-2011, 02:25 PM

Originally Posted by guavapure

I am ready to start the snowball, but don't know if it is wise to do it now or wait until September. Our revolving debt is $14,000 and I want to start hammering away at it. I know i can make a decent dent for the next 3 months, but then what do I do once June hits? Do I go back to minimum payments until September?

Just wondering if anyone else has successfully done the DR program with seasonal income implications. Thanks in advance!

Hi,

I have a variable income so if I don't work I don't get paid. When we were on BS2, we threw everything extra at the debt when we had it. For the months where my income was less, we had less to throw.

So, yes you can go back to minimum payments during the summer months without any problem. Not incurring more debt may be difficult and perhaps you can plan an extra hundred or so for each month... that can only be used for necessities... the five walls! It may really turn into a simple living summer.

Congratulations on thinking of this so far ahead of time. Planning is everything.

**Greebo** · 03-21-2011, 02:27 PM

You have 3 months in the summer where you don't get $1,800 a month and 9 months the rest of the year where you do.

$1800*3/9 = Save $600/month for 9 months a year and use it in the 3 months.

Now - if you CAN'T save $600/month when she's working, your budget needs fixin.

**FrabjousDay** · 03-21-2011, 02:40 PM

Originally Posted by Greebo

You have 3 months in the summer where you don't get $1,800 a month and 9 months the rest of the year where you do.

$1800*3/9 = Save $600/month for 9 months a year and use it in the 3 months.

Now - if you CAN'T save $600/month when she's working, your budget needs fixin.

They don't even have to save that much since the daycare expense goes away over the summer months.

**guavapure** · 03-21-2011, 06:09 PM

Originally Posted by Greebo

You have 3 months in the summer where you don't get $1,800 a month and 9 months the rest of the year where you do.

$1800*3/9 = Save $600/month for 9 months a year and use it in the 3 months.

Now - if you CAN'T save $600/month when she's working, your budget needs fixin.

This is what I will definitely do for next year. Makes so much sense. We're really hoping the $3,000 gets us by ok without having to accumulate any additional revolving debt - we've gone from 0 to $14,000 in two years and can't wait for it to be back to 0! Thanks to all for the comments and support.

**Greebo** · 03-21-2011, 06:38 PM

Originally Posted by FrabjousDay

They don't even have to save that much since the daycare expense goes away over the summer months.

We haven't seen a full budget - so we don't know that for certain.

What we KNOW is there is $1,000 after daycare - so after setting aside $600/month, they have $400 left. Whether that $400 is enough is another question.

**Greebo** · 03-21-2011, 06:38 PM

Originally Posted by guavapure

This is what I will definitely do for next year. Makes so much sense. We're really hoping the $3,000 gets us by ok without having to accumulate any additional revolving debt - we've gone from 0 to $14,000 in two years and can't wait for it to be back to 0! Thanks to all for the comments and support.

By the way - do you get a large refund from taxes each year?

**MrMom** · 03-21-2011, 06:47 PM

Also could she consider tutoring? My sister who is a teacher tutors in the summer and makes custom cakes to help fill the gap, she used to take in other kids but tutoring was more $ (2 hrs a night vs 8 hrs a day to make the same $), giving her more family time.

You are on the way tho by thinking it out and planning!!!!!

**guavapure** · 03-21-2011, 10:31 PM

Originally Posted by Greebo

By the way - do you get a large refund from taxes each year?

We are getting back around $1,500, probably next week via direct deposit. I have already included that amount in my $3,000 total savings figure for the summer months.

I just changed my W4 from married 4 to married 6 so I will get more take home pay and hopefully even out in taxes - instead of giving Uncle Sam an interest free loan for a year. I figured this will give me an extra $150/month to tackle debt with. Was this a sound strategy?

**guavapure** · 03-21-2011, 10:36 PM

Originally Posted by MrMom

Also could she consider tutoring? My sister who is a teacher tutors in the summer and makes custom cakes to help fill the gap, she used to take in other kids but tutoring was more $ (2 hrs a night vs 8 hrs a day to make the same $), giving her more family time.

You are on the way tho by thinking it out and planning!!!!!

She does tutor but mostly in the fall and spring - mostly SAT tutoring. Sometimes she can get summer tutoring which is great! I'm very excited to get going. Working on my itemized budget now and will post when done.

**Greebo** · 03-22-2011, 08:32 AM

Originally Posted by guavapure

We are getting back around $1,500, probably next week via direct deposit. I have already included that amount in my $3,000 total savings figure for the summer months.

I just changed my W4 from married 4 to married 6 so I will get more take home pay and hopefully even out in taxes - instead of giving Uncle Sam an interest free loan for a year. I figured this will give me an extra $150/month to tackle debt with. Was this a sound strategy?

Good man.

**guavapure** · 03-22-2011, 09:40 AM

Originally Posted by Greebo

Good man.

Thanks!

Not sure if I should have started another thread, maybe in the automotive forum, but I do have another question.

I have a 2008 Chevy Impala that is paid off. It’s worth roughly $10,000. Though I love my car, I’ve been contemplating a downgrade to a used car with more miles that is worth $5,000 but would still be dependable. Dumb question – but could I go to a dealer and trade in my $10,000 car for a $5,000 car and get a check for the difference of $5,000 so I can pay down debt ? Or would I need to sell my car on my own, for example through craigslist/eBay/Auto Trader/the newspaper? I’m not very confident selling the car on my own, would much rather “trade” it in, but not sure if dealers do downgrades? Any advice or experience is much appreciated.