If you are feeling stuck with a shrinking gap between your income and expenses and wondering if there is any light at the end of the tunnel, look no further than today's episode. Emily Austin is a mom of two living in the high cost Northeast. Her husband is a social worker and she is a part-time waitress. Their willingness to be flexible with their income and their expenses has changed their outlook on finances just within the last year. And she's here today to share that story.
Carly Hill: Emily, we are going to talk about what we do when the income and expenses that we were used to having is no longer the same and we're needing to rework our budget. You have always been wise, consistent budgeters, and you felt like you were in a groove. You knew what your expenses were, what your income was, and you had a plan and then you feel like things caught up with you really fast. So could you maybe share just a few things that have changed recently? And it could be changed for you personally or just what everyone is experiencing with inflation?
What do you feel like are the top couple things that have made your budget look really different recently than it used to?
Emily Austin: Yeah, definitely. So, I, as all of my adult life, I've always been a pretty careful budgeter. I've been a saver. I've been really frugal. We don't have fancy things, don't have fancy cars.
And we used to be really on track with all that. And then probably things kind of started to get a little out of control when we had our oldest daughter about five years ago. And for that piece of it was really more of like an emotional thing. I feel like I just feel like I didn't have the energy to stay frugal anymore. So that was one piece of the puzzle of, oh man, like I just, I just need to go get another coffee. I need one more coffee at the Starbucks. Or, I'm going to go out with my friends, I don't care how much money is left. I'm going to go do that. You know what I mean? Like, or I'm going to go to Target and spend whatever I need to, to entertain my kid so I can have some time to myself.
So that was one piece of it, but even still then we were still always mindful about what was in our bank account. And it was kind of like my budget used to be like on a piece of paper, like what our bills were and what our income was. And then anything left over after that was just a free for all right, like I could spend it on whatever I wanted, whether that was $100 at Target or going out with my friends are taking our daughter to go do something fun. It didn't really matter.
That was one piece of things changing for us. And then probably right after the pandemic, you know, when prices of things starting to increase is when things really just kind of got out of hand for us. And I live in New Hampshire. And a year ago the electricity rates doubled. So quite literally our electricity bill is double what it was a year ago. So that is something that we couldn't have planned for it.
I just had another baby about a year ago. She'll be a year in October. And I had an unpaid maternity leave because now I stay at home with my girls, but I work part time waitressing. So that's obviously an unpaid maternity leave that had to take up some of our emergency fund.
Our rent; before we moved into our current townhouse, we like rented from like family friends. And so they never increased our rent. We had the same rent basically the whole time we lived there. And then we moved into a townhouse that's owned by like a rental company. And every year our rent increases. And that's something that's really hurt us too, because when we moved in and we could afford our rent, you know, three years ago, but now it's like $200 more a month than it used to be.
You know, groceries are more expensive. Like everything is just kind of gone up in prices. And we were noticing kind of at the end of every month money just would be gone and we really didn't know where it was. We still like, I was still budgeting for these expenses, even though they were more than what they were, but we still should have had some leftover.
So come January of 2023. It was like my New Year's resolution to like get things back on track because it was just kind of out of hand. Like I didn't really know where all our money was going. Like we budget like where is all this coming? Where's our money going?
Carly Hill: So what did you in January of this year when you kind of decided that where you had that moment of like, okay, something needs to change?
What did you feel like needed to change the most? Was it like your income? Was it your spending? Was it your budget method? What did you, what did you look to first to try to kind of get back on track to where you were.
Emily Austin: So I felt like probably what the issue was, was our, like I said, we have all these, we pay all our bills every month. And then there's supposed to be this leftover amount, kind of like a, like what now I refer to as the buffer, right? Yup. And, I had a feeling what we were doing was overspending that, right? But I didn't really know why, because I was like, we really don't, we don't, like I said, we don't have fancy cars, we don't have fancy things, we don't go out to dinner all the time, like, where's this money going?
So what I started doing was I started writing down every single penny we spent and I highlighted it by category. It was like, okay, the green is for my husband, DJ's spending. And then the blue is for my spending. And then pink is for anything we spent on the kids. And I realized we were overspending by a lot. Like I had no idea that's really what we were overspending on. It was crazy. It was really eye opening.
Carly Hill: Isn't it amazing how like the little, it's almost always the small things that add up? Cause it's like every time we go and we swipe our card and it's like $7 here, $12 here. It's like, oh, well that's, that's almost like spending nothing. And then if we actually look back and add it all up, it's like that adds up fast.
Emily Austin: Yeah. And he'll be so embarrassed me to say so, but like, part of it was my husband likes to go to the gas station in the morning and buy himself a drink, buy himself a snack. And it was like, he didn't realize $3, $4 every day adds up a lot. And for myself, it was, I like Target was my biggest downfall, like go to Target and just buy whatever I felt like buying, you know? And we really didn't realize how much it was adding up.
And another part of it too, that I've learned a lot from following you actually is our credit cards. So we have 0 percent interest on our credit cards and we always have, I call every year and I ask for the promotional rate that you're giving new customers. I've been a customer for, you know, so many years and they always give it to me. So I've always looked at it as no big deal when I put money on it, cause I'm not paying any interest on it. But it was kind of snowballing into this thing that I know you've explained that I'm paying for things that I bought two months ago now, and I didn't really realize how big of a how big of an impact that was making on things. Because I felt like all my extra money that could have been spent into these different savings funds or other goals was just being spent to pay off my credit card.
Carly Hill: Yeah, that's, that's a big deal. I'm glad that you came to that realization because I think a lot of times when we look at, there's a lot of people who use credit cards and pay them in full every month. And so they focus on the math of it. That is like, well, I'm not paying any interest. So therefore there's no problem. Which is the number side, but we miss the, the mentality or the psychology behind it. And when we realized that if we're giving so much weight to what our credit card balance is, where if someone feels like they can't transfer money into savings until they find out what the credit card balance is and pay it off, that's a backwards priority. And that needs fixing even if we're not paying any interest because we should be so unworried about the credit card balance that we can send money to goals. And if it's the opposite, then we need to do a little bit of reworking in just not in getting rid of the credit card necessarily, but just our approach to the credit card.
Emily Austin: Right. And that was kind of what was so eyeopening for me because before, I guess we, I used to always pay my credit card in full every month, or we had 0 percent interest. It didn't seem to I didn't understand why it was a big problem. And then I was realizing, oh, it's because we're really overspending. Like I'm thinking, oh, I'll just pay for this when I get paid next week, but I am overspending what I'm going to be making next week, so I'm never able to really catch up.
Carly Hill: Yeah, yeah, and it's hard to focus on the future and make plans for your upcoming goals if in your mind you already know the paycheck I haven't even gotten yet has to cover what I've already spent.
Like that just keeps us stuck in a cycle of feeling like we can't really prioritize the future because our future income is already locked up in what we already spent. And so when we can shift those two things so that our current income covers our current expenses, then even if, even if we are ending up spending the exact same amount, just the timing of it helps us to not be worried about what we already spent. And we can then like mentally focus on the future, which is just a lot better place to be.
Emily Austin: Yeah, definitely. So it was like a few months of me writing down all of our expenses, realizing, oh, wow, we're not just kind of overspending. We're like _really_ overspending. What do we need to do? So I was like going on Pinterest, finding different budget ideas. And then a woman I thought I followed for a long time on Instagram posted something from your account. And so I went on your account. I saw your $9 budget template and I started to use that and it has made a world of difference. Because what our problem was, was not realizing where our money was going and the different categories and in the flow of money has really made a big difference for us.
And I think a big part of it is changing our mentality around all of it.
Carly Hill: So what pay schedule do you follow?
Emily Austin: We have a mixed pay schedule. My husband gets paid bi weekly. And so that's the one that we follow on the template. I get paid weekly. And my income fluctuates because i'm a waitress. I just work part time so I can stay at home with my kids. So that was something else that was hurting us was not taking into account, Oh, well, next week, I'm only going to work one shift. And this week I've worked three shifts, so my paycheck this week is much bigger than it will be in two weeks.
So the plan, that was the other piece of it that I was missing was not planning ahead. So now I had the whole rest of the year planned, I can look ahead and be like, okay, well, this pay period, I'm, we're going to be out of town to go, you know, away for Thanksgiving. I need to make sure that I pick up shifts to make up the difference.
Carly Hill: Yeah, that's awesome. I, I just said this in the previous podcast episode that I recorded, but I can say it again here: usually the people that I hear have the biggest like light bulb moment was switching from some other budget method to budgeting by pay period is those who are paid either bi-weekly or weekly.
And I think such a big part of it is that that just never lines up with once a month. And so once we understand the flow of our cash and that the way that it's coming in and out is a lot different than what we might've been trying to budget before, then we're like, Oh, I can actually see what's going to it.
I almost feel like it feels like looking into the future of your money because you're like, I can see the flow. I know when this is going to come in and I know what I need to do with it before I get paid again, which is just a game changer in the way that you approach your money today if you know what's coming down the road.
Emily Austin: It was kind of odd when I was paying by month and it'd be like, we get to the end of the month, all those bills that come at the end of the month, and there wasn't enough money to pay them. And I would have to take the money out of savings in order to cover the difference.
And it was like, why? We should have enough money in here for this. Why don't we? And it was partly because, you know, of overspending and thinking, okay, I have, you know, $300 at the end of the month. That's just free for all. Well, now I'm overspending that money, I've spent more than $300. I also wasn't paying attention to the flow of the money where, okay, this week, this pay period, I have all of these bills due and maybe the previous pay period, I only had like one or two bills due. You know what I mean?
Carly Hill: Yep. Yeah. It's like, it's like visually mapping out what is happening in your bank account, which is just, it's, that's hard to conceptualize in your mind, but we, a lot of times we try to do it in our mind.
Like I know I talk to so many people who are always running the mental math of, okay, I know I have this much in my bank account, and I can think of, like, these couple of bills off the top of my head, and if I subtract those, then I think we're fine. But it's like, there's actually, like, ways to have a tool do that for you, so you don't have to, like, worry, you know, it just feels like getting all of that number stress out of your head and on to something else that you can see that lets you not have to then hold it in your mind.
Emily Austin: Yeah, and that's, that's like how my brain works. I'm just like a visual kind of person. It also has helped us realize what places we're overspending on, you know? Like, this extra money we always had in our previous way of budgeting was not just for personal spending It was for any kind of spending I didn't plan for. Even so much as like co pays and prescriptions. I never budgeted for those. I just assumed we needed it. I'm gonna have to buy it anyways. Yeah, I didn't budget for it at all. And so now I can see Okay, like we really spend this much a month or this much per pay period in prescriptions and copays and all that stuff. I can kind of plan for it now. I can look at my calendar and see when kids have different appointments or whatever and put it into my budget for when I'm going to have to pay these certain copays.
Another part of this is that I was realizing really how small the gap between our income and expenses was because It was much bigger a few years ago, but now we have, you know, we had to get a new car, not a new car, an old car, used car but we still had to take a loan out on it because I was unpaid maternally. We didn't have enough money to just buy a car in cash, which is what we've always done. So we had to get a loan. So that's more expensive now.
So, the gap between our expenses and income is much smaller than I really kinda realized. This budget has allowed us to come up with different ideas or a game plan to increase that gap. For example, now we're planning on increasing the amount in our FSA card to make up for those prescriptions and co pays that I never budgeted for and didn't realize how big of a percentage it was really taking out of our income.
Carly Hill: Yeah, and if you can do that, you know, in a tax free way, like, go for it.
Emily Austin: Right, so like, hoping that will kind of help, help decrease our expenses in that category, and I've picked up a summer part time job bartending at a concert venue, which has been really great. It's really fun for me, and I make really good money doing it.
So that's helped us this summer make up some extra expenses, like maybe going on a little vacation or kind of helping pay off some of our credit card debt we've accrued and put some money aside for things. That was the other piece of the budget that's really helped me is realizing how big of a difference putting $5 or $10 away really makes.
So what I've been doing is I've been after I pay all my bills, I take whatever is left. I try to make my buffer $80. I think that was something that you've recommended and anything between that I have left over until I get to $80 I put away in a savings account. Does that make sense?
Carly Hill: Like Yeah. Awesome. That that the, that is the perfect approach.
Emily Austin: Yeah. So whether it's a hundred dollars left or $300 left, I put it into savings and I just didn't realize, just like, you know when you spend $10 here, $20 there, it adds up. That putting that away into savings makes a big difference. I already have been able to put just since May an extra like $2,000 away just from doing that. And between our income and expenses is really small. It's, it's really not big at all. So the fact that I've been able to do that when I haven't been able to put a penny into savings for the last, like three years has been huge for us.
Carly Hill: That's awesome. So would you say that your current primary goal is increasing your emergency fund or your savings?
Emily Austin: Primary goal right now is to kind of get us back on track. So, my emergency fund is a lot less than it was just to give you like real numbers, I guess, like three years ago, we probably had $20,000 in our emergency fund. And now we have like $7,000, you know, a lot of things come up, unpaid maternity leave, all that we've had to take a lot out of there way more than I was really comfortable with. But it feels like $7,000 is an okay number for now. It's not what I would like it to be, but for now it's okay. So my primary goal is to get us in a place where I can start putting more in there. So I have like this little fund right now that this $2,000 I have saved up is kind of like a pre emergency fund, you know what I mean? So that's because I'm a waitress, I don't get paid sick time. My income fluctuates. So that's going to be a kind of, oh, gosh, we were all sick for a week. I missed out on a whole weekend's worth of work. I need to take money out of there to make up the difference.
Carly Hill: I think that is so smart. So I, we also have variable pay just being self employed. Our paychecks are never the same. And I, I have a separate fund in addition to my emergency fund.
I call it payroll reserve since I payroll but I know some people call it like a slush fund or just like a stuff happens fund, whatever it is, but something over and above the emergency fund, because nobody likes to touch their emergency fund. And so if, especially for us, you know, you guys and us, we have that variable pay.
We know for a fact that there are going to be times where the expenses we need to cover is going to be bigger than the income that we get in that pay period. And we can pretty much count on that happening a lot more so than maybe somebody who has like set salary paycheck never changes kind of thing.
So I think it is super wise what you're doing to recognize that is a reality for us. And I'm going to go ahead and make a spot that plans for that. Cause I think that's the thing that is missing from so many people's plans for their money is that it's just unrealistic. Like they're just not taking into account things that they know to be true.
So if someone is listening and you have variable income, take a note from Emily and recognize the fact that your paychecks won't always be the same and make a plan for taking care of that ahead of time. So that like the last thing you want to do is that like you or your kids are sick and you need to stay home.
And instead of staying home and just taking care of everybody, you're how your paychecks going to be lower? We don't need that added stress.
Emily Austin: Exactly. And it just feels like if I have that, I won't touch the emergency fund. That should be for like a, a real kind of emergency, you know? Or even this fund is even for something like like when I go to the dentist in a few weeks and I have to get a a filling, like, that's probably gonna be like a hundred dollars or so, right? Mm-hmm.
So before it was kind of like, I'll just, you know, swipe my card, whatever it is. But now I know that, okay, this money is there. I can use that for whatever it is I need, whether it's, you know, getting a filling done. Or we're sick and we can't go to work or any kind of unexpected expense like that.
Carly Hill: And that's a, that's a message I've tried to harp on, especially this summer once we did the the book club at one of the chapters in the book, psychology and money is just cash equals options. Savings equals options. And I think that is such an important message to realize is that in our specific paycheck, we won't always have all the dollars we need to cover things. So if we put cash aside in a paycheck that's maybe higher or when expenses are lower, all we're doing is buying ourselves options for the future. So once that debt disappointment comes up or once that, you know, you need to call in sick or whatever, the, the money that you saved a couple of months ago has bought you options for taking care of that without needing to rely on the credit card or something else.
You gave yourself options.
Emily Austin: Another thing that I'm trying to, another goal I have right now is finding ways to make the gap between our expenses of income a little bigger. So what I've been doing is like part of the money I've been making this summer at my extra job has been going to a fund to pay for like my daughter's preschool.
So my daughter goes to preschool three days a week. And that's an expense we obviously didn't have a couple years ago, but we really love the school. We want her to go there. So now I have this like preschool tuition fund so I can take that bill off my plate for the rest of the school year.
Carly Hill: So let's talk about that a little bit. So when we, cause that's kind of something that's a process I go through and when I'm building custom budgets too, is when I look at a budget that has a narrow margin, I look at what, what most realistically, or how quickly could they grow the gap between income and expenses?
Do you feel like you've kind of bottomed out the expenses side of it, like decreasing expenses as much as possible? Or do you feel like there are ways that you could maybe keep your income the same but drop your expenses lower? So expenses lower could be small things like subscriptions, but it could also be big things like how close are you to paying off the car?
Emily Austin: So, I feel like most of our expenses are pretty much bottomed out. But a piece of that that I've been working on is like groceries, right? Like I've been really, really trying to keep our grocery expenses really low because it feels like an expense that's kind of in my control, you know?
And we've always been frugal grocery spender. I've never been someone who goes to the store and spends like, like when I hear some people tell me how much they spend on groceries, I'm like, what?
Carly Hill: Like, how is that possible?
Emily Austin: But I've been trying to really hone in on that. And hey, I'm, I'm trying to pay off our credit card that kind of got out of control. Even though it's a 0 percent interest. Because it feels like once I've kind of taking that off my plate, I will have more room to spend it in other ways. But I know that that's not something you always recommend. You kind of recommend focusing on other goals first, right?
Carly Hill: Yeah, so that's not a bad goal.
Getting that credit card out from under your plate and just off of your budget and out is not a bad goal. One thing to be cautious of is trying to work on too many goals at the same time because what it does is it takes whatever little extra we have and it spreads it so thin that all of those goals then take a while because we're working on three different things at the same time.
So it's not, it's not bad to do that at all, but I would maybe decide how much do I want in the in that extra savings, that flexible, you know, that variable income, extra cushion account, and then focus all extra cash on that until it hits that amount that you're comfortable with. And then once it hits that amount you're comfortable with, stop adding money to it and then take all the money that you had been focusing on that goal and instead shift your focus to the credit card. And you'll probably find that you can make each of those goals happen faster by doing them one at a time than you could by trying to do both at the same time.
Because I think and I think some of it is not again, we said this at the beginning: it's not necessarily the math of it. It's the mentality of it. It takes some of the decision fatigue away from your budgeting because instead of having to look at every extra dollar and have to decide like, do I want it to go here? Do I want it to go here? If you just kind of tell yourself until that extra account has something $4,000 in it, that's where extra money goes. So as soon as extra money comes in, you don't have a decision to make. You just know exactly where it goes. And then you also know you have a clearly defined amount that you're shooting for.
So, you know, am I $500 away? Am I $200 away? And then as soon as you hit that goal, then say, okay, that has what it needs. And now I'm going to shift my focus to that credit card or whatever. If it has 0 percent interest, but that 0 percent interest is going to run out, I consider that to be like a, a debt that I, that I work into a plan for paying off because we don't want to let it sit there until the zero interest comes off.
And then we have to pay a big interest. But the other thing to maybe consider a way the options for would be instead of focusing on paying that card off as fast as possible, what would the timeline be like for paying the car off if we instead focused on that? Because that could be a significant boost to the gap between your income expenses.
Emily Austin: Yes. And like I said, it's a used car. It's, we don't have a big loan on it. So it's not a really big car payment, but it's still, you know, two or $300 a month makes a big difference.
Carly Hill: A lot of these things are just kind of helping you think through what weighing what would be best for you because I don't think there is a clear right or wrong between paying off the credit card, focusing on the credit card or focusing on the car.
It's just kind of which one would would be the most valuable for your priorities? So like with the credit card, paying it off obviously would be helpful in the long term, but that doesn't necessarily grow the gap between your income and expenses over time in the same way that paying a car off does since you are locked into a payment on that.
So that's kind of some of the things I look at when I'm looking at a budget that has a narrow margin is I think about are there things that they could pay quickly that then make that minimum payment go away? You know? So if somebody is trying to you know, save up for a vacation and they're just doing like $50 a month while also trying to save in their emergency fund while also trying to pay off a certain debt.
Yeah.
Emily Austin: Yeah. Yeah.
Carly Hill: So doing that one at a time helps.
Emily Austin: And I've kind of looked at it as we have, I have different ways to save this money, you know, so I have this extra job. So all the money from that job is going towards one thing. And then I've been saving all my credit card tips go into a paycheck and then any cash I've been making, I've been putting into that slush fund, you know, so I've been having like different incomes that I've been focusing on putting into different types of savings or reaching different goals. And so I feel like that was a way to like kind of organize it. But that is a good point where if I just focus on all of my extra cash on one piece of it, that might help me reach those goals a little bit.
Carly Hill: Yeah, especially if, it sounds like you've been working hard on all of these things for a long time, so it's not like you're starting at zero with any of them. So like, especially with that, that little slush fund that you're trying to build up, you're probably not too far away from getting it to a point where you're like, yeah, that's a good amount.
So even if you just took like two months or something, and instead of sending your extra money in a couple different directions say, okay, I'm just going to go laser focused on this one thing, in the same way that you were surprised by being able to save $2,000 over, you know, from May to now, I would guess that you would probably also be surprised at how quickly you go all the way up to full if, if your extra income is all focused on one thing.
Emily Austin: Yeah, that makes sense. Something else I wanted to add that you've mentioned a lot about changing your mentality around money. I think that really has been the biggest thing to help us with all of this. Because, we were just really overspending. So one thing that we did do was now we have budgeted for personal cash, right?
And that's made probably the most significant difference for us. So we got these separate debit accounts kind of a through Chime. And my husband has one and I have one and we put our personal spending cash in there and then that's it. We don't, we don't add anymore. We don't, it's once that's gone, it's gone.
And it's been helpful to be able to like, see that that's the only money that's in that account. Right? So we can see how much is in there and that's how much we can spend. And I think that like you were saying before, this like mental game that we were trying to play in our heads, well, okay, we have $300 extra.
We're going to go out to breakfast here and go to this new that like that the math wasn't adding up. So being able to see the amount that we really are, quote unquote allowed to spend for that pay period has made a big difference.
Carly Hill: And especially when there's two of you working with one budget, it's like that might work fine when there's one, but if, if you know, the extra amount available, you're like, oh, well, I can go to target and it'll be fine, which it would be if you were the only one.
But if he's also going, oh, well, we have that, but that buffer, so I can go do this and it'll also be fine. And then both those things happen at the same time. Then it's like, oh, now we're not fine.
Emily Austin: Yeah. And that was definitely what was happening for us. Yeah.
Carly Hill: Yep. Okay. So in, in a lot of those ways, then you said you do feel like for the most part, the expenses are bottomed out.
But at the same time, I do want to credit you for being very creative with your income, because I think a lot of times I don't hear that from people who are like, Oh, well, I got this part time job. And then I got this summer thing. And I think that's awesome that you have recognized some of those small, temporary things that maybe we're like, okay, this wouldn't be my first choice, but it does help me get to where we want to be that is, that is an approach to money in general that will serve you well over your whole life of being willing to temporarily do something you don't love in order to get a result that you do love. Right.
So that's awesome. And I love that even in the summer, you picked those things up to just carry you over. So I, I hesitate to even suggest or talk about increasing income. Cause I feel like you're, you're already doing that.
Emily Austin: And that's what, as you know, another piece of that too, is that, you know, it's not like I have a kind of job where I can pick up shifts.
Like I'm not locked into a schedule. So if I see in one pay period that are buffer is kind of small. It's like, well, I can just pick up a shift that pay period. But that's not always that easy, right? Like having kids and different schedules. And when I'm a stay at home mom, and then I go to work at night, cause that's what we do. My husband comes home from work and we switch off. That means I don't get any break that day. So I might not really be motivated to pick up a shift for one day. So what has helped me though is one recognizing that like this is a goal we really want to reach even though I'm going to be really tired. I don't want to do it.
I really just kind of have to. But this like summer gig has really helped because I want to go there. Like it's really fun. I get to talk to adults. I get to listen to live music and I, the money I make makes it well beyond worth it. So I do recognize that some people don't really, it's not that easy to increase your income always. I'm in a position where I can pick up shifts and make it easier. But I, it doesn't always work in real life, you know?
Carly Hill: Something to think about and, and you just explain the difference between your, your, regular waitressing job and then your summer job. One thing to get out of that's a lot of times hard for us to think along these lines is instead of trying to trade your time for dollars where you say, well, in order to make more money, I need to work more.
You what you did instead of just working extra jobs at your regular waitress job, getting this summer job that pays better is that you aren't necessarily trading additional time for dollars. It's that you found the same style of job that pays more for that exact same time if that makes sense.
So like finding jobs that do the exact same thing because right like I mean all of us would prefer to make $30 for one hour instead of $15 for one hour or whatever. So I think a lot of times when we hear increasing income the only thing we think about is the pick up more shifts work a part time job, but it can also be looking for jobs that would take our same number of hours and pay us more to do it, which isn't isn't easy to do quickly, but the payoff is so large that it can be worth the time to figure out what kind of job would allow me to do that, right? Job searching is not fun, and interviewing is not fun, but if it can lead to working the same hours that we are now and getting a larger paycheck for it that becomes something that's like, okay Well, I can I can go through the super not fun process of interviewing if the potential payoff is that I don't have to give up more time with my kids and my paycheck can get bigger.
Mm-hmm. .
Emily Austin: Yeah. And for me right now, what is helping too is that the, knowing that this summer job has like an end date. So the money from this extra job is not really worked into my budget. It's extra money quite literally.
So I've been focusing on using that money towards when the end date of this job happens, right? So, like I said, putting it aside to pay for my daughter's preschool that way during the rest of the year until next summer when I pick up this job again, that money is being used to, to help me increase my income for the rest of the year.
Carly Hill: Avoiding having to add a new payment into your budget is so helpful in moving forward to not feel like the already small gap between your income and expenses is about getting smaller at the same time that your extra part time job is done. Like that just feels like a double whammy. And so avoid like taking advantage of the extra job to avoid that is a great move. And what you're really describing and what I, again, want to like commend you for is that you have a very flexible way of thinking about what you're doing. A lot of times, I hear people are just, they see their job as something that's permanent, as something that's not changeable.
And then they try to look to everything else as like, Oh, well I can change my subscriptions and I can change what I spend on food and I can change this. But they don't even bring up the conversation of could you work a different job that earns more money? And, and it's not even necessarily that I'm like, Oh, you and your husband need to get different jobs right now.
But it's just the willingness to like, think through those things and ask the question that means that like, yes, even if you decide, even if you think through it and then you decide, no, the jobs that we have are the right ones for us. That's still a good thing because then it means that you've actually evaluated is this working for us? Yes or no? And if you decide yes, then you just you just settle into it. But what makes it hard for people to get out of feeling stuck is when they look at something like a job as concrete as like, I'm, I'm always going to work here and whatever they pay me is just that's what my pay is and I can't change it.
So being willing to like, pick up those things and shift those things and go from being you said you're a special ed teacher, right?
Emily Austin: I yeah, I have a special ed degree. I was before I had my oldest. I was a para at a school And that we kind of had the same conversation after we had her I had her in October and I did finish out that school year. But we just realized how much we were spending on childcare, right?
So it was like, well, what can we do differently? Even though I love my job but my income there isn't going to increase really, so we reevaluated what we were doing and we decided that I was going to stay home and go back to waitressing. Cause I waitressed all through college. And even a little bit when I was still working at the school and it was like, well, that's what we're going to do now, we're just going to split the shift, like you're going to work your regular job during the day, and then you're going to come home and I'm going to go to work at night. We were, had to be flexible then, or I guess we didn't have to, but it really helped us save money on childcare and be able to focus on other things.
Carly Hill: That's amazing. And even as expenses increase, you know, I think one note I wrote down before we got on was to remind both you and other people: it doesn't mean that you did anything wrong because the gap between your income and expenses is shrinking.
A lot of times we feel like that's going to be a one and done conversation where we go from not budgeting at all to being like, all right, we're gonna make a budget. We're gonna pay off our debt. We're gonna we're gonna save an emergency fund. And then from there, it's just like smooth sailing.
And we're not going to have these ups and downs and stuff. And if anything, I mean, I think the COVID era has taught us like that eats alive, even the best budgeter, right? So have to be willing to be like, okay, the income I have now, covers all of my expenses and I have a gap, but it doesn't, I can't start to get lazy or complacent about thinking that that's always going to be true.
And in a year or two from now, as my expenses change or as prices change, I need to be willing to again, evaluate, do I make enough to cover these expenses or do things need to change again? I feel like for us personally, that was kind of a What do you call it? Like that was a moment of reckoning. I think after we like, we paid off all of our debt and then we saved up our emergency fund.
And I think we just thought like, once you hit that you're, you are immune to what happens to other people. And that is just not true. I mean, like we had very, very, very, very young kids and we only had a couple of them when we paid off our debt. And now we have four and they're older and they're bigger and their expenses grow and their appetites grow.
And so it's like, as those expenses get larger, sometimes they get larger really quickly in a way that is faster than how fast our income is growing. And so then we kind of feel back to those early days of like, Oh, now the gap is small between our income expenses and we need to change it. So I think it just means that you're living life, not that you're doing anything wrong.
When you come and go through these seasons of having a larger gap between income and expenses, and then suddenly a smaller gap and you're on the cusp, or, you know, in the middle of one of those transitions of figuring out, what does it look like going forward to go back to having that larger gap?
Emily Austin: Right. And that's kind of my big point too, is that, you know, we have always had a small gap in our income and expenses, because my husband is a social worker. I was a special ed para. Like we don't have big earning jobs. We have like low earning, like, helping people feel right. So, we've always been used to living frugally, but then when these expenses started to get higher and, and our budgeting was lazier, right?
Because I just. We were just like, whatever it is, what it is, you know, things started to get really out of hand. And then when I started using your budget and even then in a little bit of the beginning, when I started using the pay period budget it was almost kind of depressing to really see the number of how big the gap was.
Like over the, you know, six pay periods, the little, little income leftover, it was so low. I was like, is that really all we have? That's so that's kind of depressing. And so it was really eye opening for us. But then when I noticed paying attention to where money's going, setting up this personal cash fund, and that's all we can spend once it's gone, it's gone, and finding creative ways to put money aside here and increase our income there and make it made the gap a little bit bigger.
And even if the gaps not that much bigger, just having more control over it and knowing it, I am blown away by the difference changing my mentality has made in, in all of it.
Carly Hill: And, and also that there's a big difference between the gap being there on paper and then not actually showing up in your bank account versus now that you're tracking those things, the gap on the budget can actually show up in your bank account, which is the important part.
That's the part we actually need to do, right?
Emily Austin: Yeah. And it was like, you know, when I first started doing this, seeing how small the gap was, it was like, we're, we're never going to go on vacation ever again. We're never going to do anything fun. But like, we're going to a concert this Friday, and we took our kids to an amusement park a couple weeks ago with family, and we, we got to go on, it was a small vacation, don't get me wrong, but we still got to do something, and so, like, it feels so, I just feel so at peace now, knowing that, like, Okay, things aren't great, right?
Like we don't, we're not high earners. Our gap is small, but that doesn't mean we can't live comfortably and be content with what we have. And that's made like the world difference for us.
Carly Hill: Yeah. Yeah. And, and just to, you know, as we're wrapping up, it's helpful to look back on your own life. And it's also helpful to look back on other people's lives and realize, And like, sometimes we have to tell, I know I have to do this, tell myself out loud, like, you've been in this position before and you got out of it before and you'll get out of it again.
Right? So like, I, I have that very, like snowballing into worst case scenario kind of thought process. So as soon as that gap gets narrow, I'm like, well, this is it. Like we all have to go out and get jobs and, you know, we had a good run, but it's all over. And so remind, like, I actually have to think back, like, think back to when, you know, Kyle made $50,000 and I still quit my job and somehow we made it or whatever, even though we had three kids.
And, you know, like the things that the skills that we learned to get through that scenario way back in, you know, 2018 can be the same skills that now get us through the other, you know, the, a similar issue today. So, it, I have to, I say that as if I'm like, I've figured it out and I'm telling it to other people, but the only way I know to talk about that is because I have to tell myself that so often, is like, you've been through before, and you got through it, and you had seasons of not having extra money, and seasons of having extra money, you're in a season of not having extra money, but you'll get back to where you were before again.
Emily Austin: I totally agree with that with, you know, we've always known that there are seasons of life where things cost more and things don't and all that. But the past couple of years that has felt like there was no light at the end of the tunnel. But now I feel like there is. And I feel like I have goals set in place and I, I'm realizing how quickly I can reach those goals just by putting a little bit aside and focusing more. And it feels like, yeah, we really can get out of this and be in a better place.
Carly Hill: Awesome. Well, that is amazing. I am so excited for you for the next couple of months. That's another thing is like, as soon as we realized what we need to do, we want it to like happen now. And so one of the hardest parts is just to like maintain that consistency, even if it takes a little bit longer than you wish it would, or that you originally thought it would. So stick with it because you are doing the right things.
Emily Austin: Oh, thank you. That is feel so good here because we've really, we were, my husband and I were just talking about this the other night, like talking about doing this and like, wow, like this has really been, we're in such a different place than we were, you know, four months ago.
And I was like, we've worked really hard, like we've been trying so hard, like, and it's paid off. Like, I don't want to downplay like how hard all of this was to like, It's really hard to tell your friends, especially I'm someone who gets FOMO. Like I love to go out with my friends and it's hard to say, no, I can't, I can't go out to dinner this week.
I don't have enough in my personal spending cash fund. Or like the town fair was just last week and it's like, sorry, we don't have the budget to go to the fair this weekend. It's just not, it's just not there. That's hard. So, thank you for saying that.
Carly Hill: Absolutely. And sometimes, sometimes we get so head down focused on what we need to do to get it done that we forget to realize like we are making progress. We are doing the right thing. So celebrate those things together. And that can sometimes help give a boost of motivation to keep going with the process.
I am always inspired by hearing what kind of options other people come up with when getting their finances in order. After Emily and her husband realized the full scope of their overspending and the small gap between their income and expenses. They could have wallowed. They could have said, this is such a mess. I might as well, just have fun. There is no point in cleaning this up. But instead they recognized what was inside their control and got after making it happen by picking up extra jobs on opposite shifts, learning to be content with letting their goals take time, saying no to some things that means they can say yes to other things in the future, and by using the Debt Free Mom budget template to gain confidence in their plan, they have made big strides in such a short period of time. Maybe you hear yourself in Emily's story. Maybe you've recently had that moment of awareness that you can't keep spending the way you have been. I hope that like me, you feel encouraged by Emily's attitude and flexibility towards her money and that just like her, you can see progress in a short period of time.
Thanks for listening to the Debt Free Mom Podcast. If you want to join me as a guest on the show, go to dfmpodcast.com. The Debt Free Mom Podcast is hosted by me, Carly Hill, and is produced, edited, and mixed by Kyle Hill. Music for this episode was written by Kyle Hill. Hit subscribe wherever you're listening to join in with every new episode as we grow our confidence and contentment in our personal finances.
