Tony will finish graduate school in May 2010, but after that he’ll have a semester of student teaching before he’s certified to teach. Right now he receives a stipend for teaching undergraduate classes, which he won’t receive while student teaching. Unfortunately, this means we’ll have to live on my income alone for about 7 months. The student teaching program is full time, and we’re hoping he’ll be able to work nights and weekends, but I don’t want to count on that considering the trouble he’s had searching for part time jobs in the past.
We’re also preparing ourselves for after the move. I’ve done a little research, and in the area where we’re moving, it looks like we can expect Tony to start somewhere between $32,000 and $35,000 as a high school teacher (according to what I read, he’ll be paid slightly more than a normal first year teacher because of his master’s degree and experience). Of course, this number is just an estimate. If you have any information about what starting teachers in the Indianapolis metro area make, by all means please pass it along!
I will continue to generate freelance income, but I won’t be working full time since we’re planning to start a family shortly after Tony finds a teaching job. Freelancing is feast or famine, so we don’t want to factor my income into our normal budget. That means we need to start planning now for a reduced income with a baby.
On top of all this, our savings goal has increased since we’d like to buy a house sooner rather than later.
To help us reach these goals, we’ve decided to reduce our monthly spending by about 5% and increase our total monthly savings amount by 25%. Put simply, that means we’re cutting about $150 from our monthly spending and adding it to our monthly savings.
I spent some time pouring over the budget. I determined that if we continue living on a cash budget, cut our weekly spending by $25 a week and make some minor adjustments in other areas, this is totally doable. If we hadn’t spent the summer on such a tight budget, I never would have thought this was possible. I thought we were saving as much as we possibly could, but after a summer of tight expenses, instead of feeling like we need more, I only see where we can cut.
In real terms, this means we’re cutting our grocery budget from $50-$60 a week to $40-$50. Our “shopping” budget, which covers household expenses like cleaning products and other miscellaneous items, is being cut from $20 per week to $15.
As we move into fall, we’ll increase our additional savings by another $50 when our electric bill drops from $100+ during the summer to $40-$60 a month during the cool winter months.
Over the next 8 months, this will increase our total savings by about $1500. More importantly, it will better prepare us for next summer and fall when we lose 1/3 of our total income. It will also make it easier for us to transition into a single income home in spring 2011 when I’m no longer working full time.
My point is this: if you’re looking ahead to a lower income, now is the time to make cuts. It’s always easier to transition slowly than it is to jump into the cold water. Don’t wait until you lose your income. Learn to live on less now so you can bank the extra money for the future.
Excellent points! Last year my husband and I decided it was time to go to law school. Not a cheap decision but one he needed to finally do. So we carefully looked at the budget to see where we could make some cuts, both to save more and not be in complete shock when we started school. We were able to cut our grocery budget and eating out budget by half almost immediately just by making a better plan and learning to cook a few favorites at home!I’m sure the careful budget will continue after school too, so we can pay back as quickly as possible.
BTW-Just tuck this away for when the time comes. Don’t worry too much about planning for huge expenses with a baby and a smaller income. We just had our little guy 4 months ago and our spending is better than ever. All of his clothes and jammies fit in my bottom drawer, he sleeps in a beautiful portable crib (we bought the safest/sturdiest rated one on Consumer Reports) in the corner of our room. We change him using changing pads on the floor or our bed. I’ll be buying clothes at our Salvation Army on the half price days. Breastfeeding (if you’re able to do that) is the cheapest way to go-except you will be eating TONS! Cloth diapers are also pretty cheap but if it’s too yucky for you, you can find LOTS of coupons for that! I’ve using the pure and natural ones for the past month and getting them for less than the store brand, just with basic couponing! I never thought I’d say this but having a baby has simplified my life more than anything I’ve tried before! Forget buying all the extras, just make sure you have a washing machine before you have a baby! (we even bought that cheaply on Craigslist!)
Good luck with you new budget!
Great plan! Very encouraging too. I really like the tips from Rhiannon.
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Good planning ahead! I hope Tony will be able to find a good position right away. Plus, if he opts to teach over the summer, that’s an extra bit of moolah.
I agree with Rhiannon. Babies aren’t as expensive as some people would like you to believe.
Do you do drugstore deals at all? That can really free up that $15 per week and then some. It’s some work at first, but eventually your stockpile is so great that you don’t have to do it anymore for a loong time.
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