Working from home as an independent contractor, what I earn is controlled by two factors. One is the amount of time I have available to work, which is generally under my own control (relative to my familial obligations). The other is the amount of work available at any given time, which I have no control whatsoever over. I have good months and bad months as far as earning goes, and the irregularity didn’t bother me as much when I wasn’t so focused on my financial picture in such minute detail. Now, it is driving me crazy. Right now I’ve only earned about $230 in September that will be paid in my October compensation (and the end of September is fast approaching). Since our household budget is based on my earning $400/month from my contracting work, I may have a dilemma soon when it comes to paying our monthly expenses in October. So I’m starting to think about my options in regards to our financial situation next month.
Temporary setbacks like this can have a huge impact on motivation. Setbacks are not limited to loss of or less income than expected. They can be an unexpected bill, auto or home repair, a medical bill, any of a number of things that come up. No matter what has to be done to deal with the setback (use of emergency fund, use of a credit card), the key is… don’t let it kill your motivation! This is much easier said than done. Here are a few things that might help to soothe the emotional impact of a setback in your financial plan.
Try not to obsess over the setback. This again, is much easier said than done. I am living proof of that. Try to rationally look at what the impact of the setback will be to your finances, and then go from there.
Don’t give up! Even if you decimate your emergency fund and feel like you have to start all over, or if you have to use a credit card, don’t give up. A setback is no reason to fall off the debt-reduction wagon.
Reassess if necessary. You may have to come up with a new plan to be able to move forward and basically abandon the old plan if the setback is large enough. Know when to say when – don’t be so attached to old plan you can’t let go. I know that it is hard when you put so much time and energy into finding a realistic workable plan but sometimes you just have to cut your losses and move on. But moving on does not mean giving up…
Keep going! You can still do this. You may have had to reassess and recreate your plan from scratch, but that does not mean that you cannot still get out of debt. You can.
Don’t let a setback snowball into more. If you think “Well, I’ve already spent this much, what’s a little more” you may end up worse off than you were in the first place when all is said and done.
Focus on the new plan and new goal. If you’ve had to revamp your plan, then focus on it. Make new goals and new targets based on the revised plan.
As for me – we may have to use a bit of our emergency fund to get by. I’m hoping that will not be the case, and I am thinking of ways to ramp up other income areas such as selling things to provide a cushion. I’ve decided to snowflake any September surplus as planned so not to get off track any further. November is a three-paycheck month for my spouse so at this point I can look forward to using some of that if necessary to cover any October gap. I had other plans for the extra paycheck (and still do for most of it, which I’ll expand on in another post) but it is comforting to know that I do have it there, and I have some options to work with. But for now, I am hoping that we can cut back on some expenses and not have to think about the emergency fund at all….