Inconsistent Income

By Joshua Huffman, certified financial counselor
The Village Family Service Center

Annette and John Graves came in with a very familiar problem. They just don’t have enough money to cover all of their monthly expenses. They have fallen into a pattern of shuffling their bill payments to keep them all as current as possible. In their situation, as in most, this results in a number of obligations running past due, living paycheck to paycheck, and carrying a load of stress.

This problem is a result of a number of different factors, the foremost being a substantial loss of income. The downturn of the economy and the slow-down of the housing industry has meant a decrease in John’s self employment income over the last few years. John earns a good living during the summer, but winter jobs are few. This has led to a cycle of falling behind on bills during the winter months and then spending the summers struggling to catch up. When winter hits, they fall behind again.

At their first session, I went through a comprehensive budget with the Graves. The estimated budget revealed they are short approximately $420 each month during the winter months. Annette and John have worked very hard to reduce their expenses to make up for this shortage in their monthly budget. In addition to cutting back wherever possible, they worked out a deferment on their student loan debt. This will allow them to forgo making monthly payments for 12 months and eliminate $120 from their monthly budget for now.

One of my recommendations to John and Annette is to track all of their expenses for 30 days to determine what they are really spending. Tracking expenses, keeping track of every dollar you spend for a month, is often a first step in putting together an accurate picture of a family’s financial situation. It sounds easy, but tracking can be a difficult task requiring a lot of discipline. (If you are interested in tracking your expenses, use our free Pocket Tracker at

I will meet with John and Annette in 30 days to review their budget using the numbers they’ve been tracking. They have also pledged to scour their budget looking for other ways to reduce their expenses as much as possible. Annette and John also recognize the importance of increasing their income as much as possible, so John recently applied for a job and will continue pursuing other work. If he is able to find work in addition to his self-employment, their situation could drastically improve.

The Graves were a delightful couple to meet with. They have a good understanding of their situation and a willingness to rise to the challenges of improving it. It is a stressful situation, to be sure, but their stress is tempered with a great sense of humor and a desire to improve their circumstances for the sake of their family. I look forward to working with them and hopefully, witnessing their success.

Showtime! It’s Payday!

Our finances seem to affect everyone in a roundabout way. We are a blended family of seven.  Even though the two oldest are adults, it seems like on a regular basis something is needed and as parents we try to help and it is hard to say NO. And with the three younger ones at home, their needs are ever growing … school lunch, shoes (every 6 months because their feet almost grow faster than their hair), coats, clothes, etc.

We always thought we were doing pretty good with our finances. In the last few years we have paid off two credit cards, an auto loan and several small department accounts. In many cases, we closed the accounts after they were paid off. We thought that we were doing a good thing by paying accounts off in full when we had the money, but it seems that we just always forgot about keeping a safety net for the winter months (when we experience irregular cash flow).

Let me expand on our past for you … John has been self-employed for many years, we rented or worked as property management until 2008 when we bought our lovely home in North Moorhead. At that point we decided that his self-employment could go full-time, because he was doing things he loved: building, repairing and helping people. But we had no idea that it would start a cycle that would mess with our finances.

During the spring, summer and fall we would not have a problem. All bills were paid on time and we had the luxury of taking family trips around the tri-state area. We felt we could make improvements on the house. We even had extra time and money to spend with the family.

Then in the winter months the jobs would slow down, the checks would not be every week and we would have to change gears. One winter, we made the worst mistake we could. When we were short money, out would come the credit card. So in the spring, we would have to pay off everything that backed up during the winter and then the cycle would start again!

So, every week I find myself looking for ways to make the money go further. Here are some examples:
1.)  Instead of buying bread at the grocery store, we get it for half the price at the Bakery Thrift Stores in the FM area.
2.)  We shop the thrift stores for furniture, clothes, etc.  Did you know that there are more than 15 thrift stores in the West Fargo/Fargo/Moorhead area?! Did you know that some local chain stores give their clearance items to area thrift stores?!
3.)  We cut our subscriptions to most of our magazines, because the library gets a lot of them and you can read them all for free. This is also true for movies, books, newspapers and the ability to use computers.
4.)  We shop at Cheep Foods for big discounts, because the packaging is damaged – not the food.  We wish there was a store like this in Moorhead!
5.)  I try to do a little research before buying something, comb the ads, clip coupons and compare local stores.

I have a great example of #5. This last weekend we need to get a pair of basketball shoes for our 8th grader for school. He found a pair at Scheels on sale for $61.99. I told him that we should shop around just a little.  We then visited Kohl’s and Shoe Carnival. We found the same pair at a different store and saved $20!

This Financial Fix-Up has been a wonderful thing for both of us, our children and many friends and family that ask questions about the process.

Tomorrow will be a defining moment for us. John gets his first steady check from his second job. It is kind of scary because I don’t want to rush out and pay all of bills because the money is there and then be without money for gas and food for the next two weeks. I want to get away from that nasty cycle. But it is hard when you have bill collectors that are bothering you for money every night and causing stress in your home. Bill collectors are not happy with a minimum payment. They want the entire thing at once.

I do have to laugh a little because every time I sit down to write this blog is seems that “General Life” interferes with our Financial Fix-Up plan. Let me bring you up to speed on the stressors in our life:
1.)  Our family member that was in the hospital is better and at home. – Less stress
2.)  When we paid our mortgage payment, we were $106 short and then got a not so nice letter from the bank. – More stress
3.)  We now have a vehicle that needs $400 worth of repairs. So where do we come up with the extra money to fix the vehicle that gets me to work, appointments and picks up the kids? – More stress
4.)  We received a collections notice for $2,200 on a bill that last month was for $810. So now I have to do research into the charges and try to deal with the phone calls and letters. – More stress
5.)  Our daughter is going in for a day surgery next week and I might need to be at home all week. There is a chance that Grandma and Grandpa might be able to help for a day or two and John will be home one day. – Stress level remains to be seen!

I will add that I am sure most people wonder, “What are they complaining about? This is life!”  When it came to the additional $106 for the mortgage, it was a choice between paying the mortgage in full or keeping some money for gas and food for the table.

I don’t want anyone ever to feel sorry for us. I just want people to look at the truth of their family and friends around them and the struggles experienced on a monthly basis if finances run short. A large percentage of households live paycheck to paycheck and when “General Life” things come up, it can make it very difficult for people to make the choice between paying a bill or putting food on the table.

We want to change things in our finances forever and more forward, but I can see how people can get completely backwards with their finances and lose everything. Since the article ran in the Forum, we have received some phone calls and kind words congratulating us on facing the truth of our financial situation.

Most people can not or will not face their financial truth because of what someone might think of them.  I hope others can find truth and strength in our story and commit to financial improvement.