Giving Income Streams New Jobs

by Julie on August 22, 2012 · 19 comments

I’m a huge numbers nerd. That’s part of the reason The Family CEO came into being.

I love check registers and calculators and spreadsheets. I’ve worked as a bookkeeper, a credit analyst and a business manager. My college major was business and finance was my favorite class.

And I just bought this new toy because I hate that my MAC keyboard doesn’t have a 10-key.

Now that I’ve established my number nerd credentials, let me say that I hate to budget. Hate it.

Or rather I hate following budgets. I like making up them up just fine. I enjoy it even.

But sticking to budgets? It makes me feel cranky and claustrophobic and I’ve never been successful at it.

Unbudgeting: Putting Income Streams to Work

So budgeting hasn’t been working for me, but another form of money management has. That is identifying different streams of income and giving each of them a job to do.

We have one major source of income and that is my husband’s business income. That income is responsible for our day to day expenses.

Beyond this primary source of income, we have three smaller sources of income and they’ve each been given a job. Up until now it has looked like this:

  • My freelance income (Writing, Blogging, and Marketing Online) –> Used to cash flow college for our daughter.
  • My bookkeeping income –> Originally applied to savings for a used car, then diverted to extra debt payments after the car was bought.
  • Found Money –> Extra debt payments.

But we now find ourselves in a new place where we are no longer focused on debt reduction. We have two debts left — mortgage debt and a car loan at .9% interest — and we’re content to let those pay off according to schedule, at least for now.

So it’s time to give the bookkeeping and found money income streams some different jobs to do.

Photo by Grant Mayfield

Choosing new jobs for this money wasn’t easy. There are so many places for money to go.

But I’ve learned that if I don’t specifically give the money a job, it will disappear into our checking account and get spent on who knows what. So I’ve decided on two new jobs for those two income streams:

  • Bookkeeping Income –> College savings for my son.
  • Found Money –> A beefed up emergency fund.

My son is beginning his junior year in high school. He and my daughter are four years apart and won’t be in college at the same time. The money we’re using to cashflow her college costs will be switched over to him when she graduates from college and he enters it. That’s all good.

We also have a little more saved for him than we did for her and we’ll be kissing Parochial school tuition goodbye when he graduates high school. On paper, we should be okay for his college.

But I’d like to have a little more of a head start on his expenses. So now seems like a good time to divert that bookkeeping income stream into college savings just to give us more of a cushion.

And any found money (found money is explained here) will now be directed to our general savings/emergency fund.  The $393 I “found” in July is there, and I’ve been able to add to it the following:

  • $250 in reimbursements from a golf tournament my husband played in (He paid the entry fees for all the players and they reimbursed him.)
  • $14.40 in Amazon book sales
  • $125 in anniversary gifts (We have wonderful parents!)
  • $38 refund from the eye doctor for an overpayment
  • $28.23 property tax refund for the old car

That totals $848.63 in found money that has beefed up our savings account.

This managing of income streams does not feel like budgeting to me. I enjoy watching small amounts of accumulate in savings or whittle away debt. And it’s fun to look for new sources of found money. Most importantly, this new way of looking at money has helped us make real financial progress in important areas like paying down debt, saving for college, and building up an emergency fund.

Are you a budget nerd? Or would you rather have dental work done that make/follow a budget? Weigh in in the comments!

This post is part of Works for Me WednesdayPenny Pinching Party, and Frugal Friday.

 

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{ 12 comments… read them below or add one }

Sara Tetreault August 22, 2012 at 11:15 am

Julie, I don’t like following a budget either! And I love your number pad – number nerds rule. I will have 2 in college at the same time….time to go water my money tree ;)

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Julie August 22, 2012 at 9:07 pm

At least it will be over quickly, Sara. :)

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MyPeaceOfFood August 22, 2012 at 11:27 am

I am terrible at sticking to our budget also, and it scares me. Any advice on how to feel better about money? My husband also gets ‘claustrophobic’ like you said when I try to involve him. I think about this way too much and feel like I just can’t make any progress!

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Julie August 22, 2012 at 9:08 pm

MPOF, check your email.

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Krista B August 22, 2012 at 4:37 pm

Thanks for this great idea. I hate budgeting. I get a sick feeling as it starts to remind me of relatives who were terribly stingy when growing up. And all the obsession with money from family history. I need to be able to manage stuff but not be made sick by it! Anyway, i love this idea and i am implementing it immediately. thanks!

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Julie August 22, 2012 at 9:09 pm

Krista, I’m glad you found the idea helpful. Let me know how it goes! Money does come with so much baggage sometimes.

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Carolyn August 22, 2012 at 6:47 pm

Thanks so much for this! You’re the only other person I’ve encountered who really enjoyed MAKING a budget, but not FOLLOWING it so much! Great ideas. :)

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Julie August 22, 2012 at 9:09 pm

At least there are two of us, Carolyn. :)

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Siyabonga Khumalo August 23, 2012 at 12:18 pm

I wish my continent/Africa (and others) can read and follow your ideas cos we can beat poverty. Thank you.

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Julie August 24, 2012 at 10:44 am

My best to you. Thanks for your comment, Siya.

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Jean August 24, 2012 at 12:07 pm

I’d rather make/follow a budget than the dental work (but dental work is scary and could be expensive!). However, I do find it a frustrating task and love the change the perspective approach you have here.

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Little House August 30, 2012 at 9:08 am

I really like this strategy. I’m also great at coming up with figures for my so-called budget, but I have a really difficult time sticking to it. If I could instead give my side-incomes a “job” I’m guessing I’d do much better meeting my savings goal. Great tip!

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