Debt Repayment With a Teacher in the Family

Yesterday, I wrote about budgeting with a teacher in the family. Micah doesn’t get paid in the months he doesn’t teach, which means that our income ebbs and flows, depending on the time of year. I’d call it irregular income, but we do know ahead to plan for it.

For budgeting, it helps to have what I call a “cushion fund,” something built up during the teaching months to help us make up any shortfalls in the summer. This is particularly important for us because my freelance income varies by month.

What about the impact on debt repayment?

Our debt snowball was rolling a lot faster during the school year, when we had 2 incomes going. It makes me sad that we don’t have that momentum now. The timing of the economic stimulus and our giant refunc helped, since it’s making up for the lack of snowflaking money.

Before we knew it was coming, our plan was simple. We’d pay more on the debt when Micah was working and pay minimum payments + smaller snowflake when he wasn’t.

The ideal debt repayment is one long motivated snowball full of energy and snowflakes building and piling and rolling down a hill and gaining momentum. One reads about people’s passion and sticking with that passion.

There’s a lurking fear that slowing down means getting off-course. Yet bloggers like Paid Twice and Debt Hater, for instance, have written about some snags in their best-laid plans. Yet they come back ready to pay off more debt. Perhaps having a blog helps keep them motivated.

There is nothing wrong with deferring your snowball (or other debt repayment plan). Especially if it’s a planned deferment. What matters is being able to pick it up again. As it is now, we’ll make minimum payment + what extra we can add. But it may not be in terms of adding a couple hundred dollars a month and that’s ok.

Having to go back to minimum payments doesn’t mean you’ve failed. It means that you’ve hit a snag. Perhaps it’s a planned one like ours, with a short duration. Perhaps it’ll mean looking for another job or short-term job. What matters most is your motivation. If paying off debt is part of your goals, then a setback is only a setback. It’s only a failure if you treat it as one and give up (vs. reprioritizing and re-evaluating your goals). And even then, it’s not a permanent failure because you can always pick up where you left off and turn it into a mere setback.

Is your income irregular or seasonal? How does it affect your debt/investing/savings goals?

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As I mentioned in yesterday’s article, Micah will quite possibly teach or do other paid work through this period once he’s finished his dissertation. That takes precedence for us over debt-repayment, since it’s a key to his able to earn so much more. And because he’s been working on getting here for years. And all the student loan debt might as well have a point, right?

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