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.

My Husband, My "Client"...

After doing some research on debt and relationships I have come the conclusion that I need to treat my husband like a “client.” As I mentioned in a previous post, the reality of our debt never quite sank in for my darling hubby until he saw the results on paper (not unlike many others out there). However, I know if I want this to pay off to work, he needs to be working with me and be fully disclosed as to the entire extent of the damage. So here is the plan:

At the end of every month I will provide my husband with a package. Kinda like a Board of Director’s treasury report. It will detail the following:

a.) What our debt picture looks like. This includes interest rates and balances.
b.) What our debt is costing us. This is the details on the interest we have been charged in the month, and the payments we have made.
c.) A variance analysis on our budget. Where we were over and under for the month.

I think the action of actually putting these things on paper will be very useful. It will help me get a better handle on our debt. Plus, it will let him know that this is serious business, with the details on paper to back it up.

Furthermore, I know that it is partially my fault that I probably do not communicate as effectively as I could about our debt issues. This could be a step in the right direction.

Stats – same as before, but my auctions close tonight.

No man is an island...

So apparently I will have one more obstacle on the way to Debt Freedom. Task #4 – Educate the Husband

I was greeted the other day with a bellowed “What the HELL is this?” coming from our home office. Apparently, my beloved hubby had found the “Own Up to Your Debt” worksheet and was even more oblivious than I concerning our current situation. I had thought I had been communicating our situation to him, but things have gotten a little lost in the translation.

His first suggestion – Consolidation Loan. No way! I know this will likely bring down our interest rate, but this will bring the lifetime total to 3 loans. We have always paid the loans off, but we always end up back in the same situation as before. We need to learn our lesson this time. Plus combined with being too chicken to confront our banker with yet another pile of debts, I’ve ruled it out (until the pile is a little more manageable at least!)

The hubby is always about the quick fix. My new goal is therefore to keep him apprised of our current position and making sure that he is working in the same direction to getting these debt monkeys gone. First, I have to fight his compulsion to sell everything we own and live in a box to pay off the balances. Moderation – my young grasshopper – moderation!

By the way, he has helped me by giving me all of the old beer bottles and cans in the garage to return. Only got $10.40 (0.40 in the change jar for another month), but hey I’ll take it.

Debt balance – same as last time
Credit cards to pay off – 3
“Extra Money” this month - $10 – still waiting on that eBay money ship (some of my auctions are looking good – some not so good)