Tony’s summer vacation has officially started. He won’t be teaching or taking classes again until the end of August. Unfortunately, this means we’re losing a third of our income for the months of June and July.
We’ve been anticipating this temporary loss of income all year, so we prepared by putting aside most of the money we’ll need to cover Tony’s salary without using our emergency fund. But now I’m looking at that money, a pretty hefty chunk of change for us, and thinking about all the things we could do with it if we could save it.
Our original plan was for Tony to find a part-time job. Any extra money he made would go toward replenishing that savings. We’re not giving up on that plan yet, but it’s tough out there. He’s applied for about 20 part-time jobs so far with no returned phone calls. When he follows up, he’s told, “Don’t call us, we’ll call you.”
It’s frustrating, but this is exactly why we saved the money. We knew it might be difficult for him to find a part-time job this summer, especially since we share a car and he’s limited to jobs that are accessible through walking or our city’s limited public transportation. So the money is there if we get into trouble, but even if he doesn’t find a job, we’re challenging ourselves to spend as little as possible for the next three months.
Here’s what we’re doing:
We’re temporarily halting savings.
It seems silly to take money out of savings only to put it right back in. We currently save about 60% of Tony’s income every month including retirement. For the months of June and July, we won’t be putting the full amount into savings. It seems counter-productive, but the point is to live only from our income without dipping into our savings. If we can make it through the summer without spending it, then we’ll be able to double what we would have normally saved in two months.
We’re participating in a no spend month.
I’m intrigued by the idea of a “No Spend Month,” from SmallNotebook.org. We’ve never tried a cash budget system, but we’re going to give it a shot one month this summer. We’ll probably wait until August when our finances are likely to be tightest.
We’re working from a three-month budget.
Every month I set a zero-based budget based on our expenses and income. This summer, since our monthly income is reduced, I’ll be setting a zero-based budget for three months instead of one.
Here’s why: Because I’m paid every other week, there are two months out of the year when I get three paychecks in a month instead of two. July is one of these months. Because I base our budget on our total monthly income instead of my yearly salary, this feels like “extra money.” When it’s split up over the course of three months, it helps cover some of the gaps of our lost income. So I added up all of the paychecks I’ll receive over the next three months, divided them by three, and set a monthly budget based on that.
We’re cutting our overall expenses — slightly.
After adding up our total income over the next three months and cutting out savings for two of those months, we come surprisingly close to our normal monthly income without moving money from savings. We’ll make a few adjustments to spending to cover the remaining gaps. I’m hoping that the no spend month at the end of the summer will help us increase our savings by even more.
Anything extra will go straight to savings.
If Tony does find a part-time job, it won’t change our plans. We want to save as much as possible this summer, and any extra income will go directly toward savings. We’re still hoping he’ll find something, because this will help us save so much more!
If all goes according to plan, we should be able to double the amount we would have put into savings this summer. Here’s hoping we can do it!