How To Survive a Pay Cut
Unfortunately this is something that Tamara and I are having to work through at the moment as this week we effectively took a $125.00 per week pay cut.Because we are full-time volunteers we are actually sponsored by individuals, churches and other organizations to do the volunteer work that we do. This week one of our major sponsors had to stop their financial support for us, which was $250.00 a fortnight. So now we are walking though this process ourselves to "tighten our belts", get an up to date budget going and learn to survive on less income.
After getting over the initial scare of loosing the financial support we sat down with a blank Microsoft Excel spreadsheet (paper works too it's just that I'm a nerd and I also wanted access to our Microsoft Money). With that information in front of us we started working on the following steps to develop our new budget:
- First thing we did was to work out our total actual income that we will still be receiving every month. This included adding up all of our regular financial supporter amounts, government payments and our bank interest.
- After we worked out our total income we set aside the first 10% of it for our tithe.
- Next we worked out what we are legally or contractually obligated to pay. We called these our "obligations" and they included our house mortgage, household insurance, phone bill, electricity, property tax, income tax, etc. This amount came to about 35% of our expected income.
- After we had worked out our legal obligations we went on to our "needs". These include things like food, toiletries, health care, household maintenance, basic clothing, laundry, vehicle expenses, etc. Our needs came to about 45% of our expected income.
- Then the next thing that we looked at are our work related expenses. Because we are full-time volunteers and need to raise our own sponsorship or financial support this includes our communication expenses, stationary, etc. This almost covered the remaining 10% of our total expected income.
- With the remaining expected income we will be placing away a bit of savings for the kids education, gifts for special occasions (like Christmas and birthdays) and a bit for entertaining friends and co-workers in our home.
This post is being submitted to the ProBlogger 'How To' Group Writing Project.
Tags: Budgeting, Personal Finance
Technorati Tags:
Post A Comment! :: Send to a Friend!
Share and enjoy
I am a full time volunteer with Reef to Outback - Youth With A Mission (YWAM) where I work in Communications and Information Technology. I am married to a wonderful wife, we have a five year old son and a one year old daughter.
- extras
Jersey Girl/Problogger Project on Friday, September 22, 2006Changes in income are always an adjustment...you do find ways to cut expenses when you really need to...things to look at also...phone plans/long distance, cable bill/basic versus standard, generic brands/grocery store...all extra things that help...coupons, dollar stores can help with things like paper plates/cups etc..
Permanent Link