Taking the Home out of Home Business…

So I received a comment relating to the “My Husband, My “Client”” concept. One of my good friends was indicating that one of the biggest debt problems was my husband disconnection between his expenses and income. My hubby works from home earning commission income and has a great deal of associated expenses (and over half of our combined debt on his “business” credit card, I might add). He does his job how he sees fit, and I handle all of the bills and finances.

My friend then indicated that I need to segregate his business from our household finances. She suggested doing this by providing a “salary” to the household from his commission income and the residual income would go to pay his operating expenses. His salary would be dependent on how much of his income is actually required to cover these expenses (ie. 45%) Based on this method she said it would help with the following:

a.) Determining if we are overspending on our household expenses. By removing his business debt and related operating payments to a separate accounting system (read: budget) I can determine if our household is actually balanced and operating properly. If not, cuts will need to be made here.

b.) Determining if the business is overspending by determining if the allotted % is actually covering his expenses and whether we have an overage or shortfall here. Budget may also need to be made.

c.) Requiring my husband to take more responsibility for the expenditures in his business. For this system to work he will need to know if he can make purchases, instead of just doing it and having me deal with the consequences by shuffling around his income and our household spending.

A huge lightbulb went on at this point. Why didn’t I think of this before!! It’s really a simple concept, but for some reason I just never got it.

Considering both the household and business are starting out in a negative position, I think it will logically take 6 months to a year to have each completely self-sustaining, but I am going to give it a go. Unfortunately, I will not be able to implement until October as I have already missed September.

I asked my friend how she got so smart. She responded, “It’s what Gail would have told you to do!” She’s probably right.

Stats -
Credit Cards to Pay off - 3
"Extra" this month (October) - $0 - I will think of something though.