To make a long story short we have 2 paychecks coming in through August.  At that time we will be down to my income only.  We are adjusting by my picking up more hours at work to a point that the income will cover the bills but my schedule will be rough.  We will have health insurance and housing.  Between tax returns, stimulus package, May June and July checks we could get some bills significantly reduced by about $300 a month.  It also would pay the house taxes for the year, the homeowners insurance through February.  Which is better to do pay off the bills and have a little next egg for incidentals or to put all the money into reserve in case husband doesn't get a job right away.  Right now I figure on paying down and having the small nest egg while working my fanny off to pay the bills. 

Looking at things to reduce- there aren't many initially.  We can always decrease the amount repaying on the life insurance loan, also could go into deferment on the student loan.  As far as the rest- there aren't many things that are decreasable expenditures.  The payment we are making on the house is cheaper than any rental we could have given our 3 kids.  2 cars are a necessity since we live in a rural area and I commute.  Phone is necessary for job hunt.  Cable is something we could stop however it is our only form of entertainment and we would only get 1-2 channels which would change in February when the new digital system is mandated.  Any suggestions would be appreciated.  TIA.

Being as you know that a paycheck will disappear in the near future, I'd scrimp on everything possible and put every penny in savings until that time. You will probably make sure bills will get paid one way or the other, I think your greater need right now is savings. If you go to only one income, yours, and you get sick, what then?. If you have savings it may be enough to get your thru tough times. Edey

I would try and pay off anything in full that I can so you have less "due" when you have less money. I would pay anything ahead that may come up after August like auto registration, any tuition type bills, taxes, etc. Just write the check when you have the money now and put it in an envelope to pay when due.

Sounds like you are planning early for this tough time. I hope your husband can find something shortly after August! Can he do temp or part-time work if available in your area?

Can you have a garage sale in September? Sell things on ebay?

As for getting rid of cable, can you cut back to basic? Maybe if DH does not have a job by September or October, you could get rid of it then.

My husband fortunately actually could draw 2 paychecks this summer.  He will be getting paid from his old job and could have another job- assuming he can get one.  As for the cable- already checked and are down to the basic minimum.  Garage sale unfortunately isn't an option since we moved last year we got rid of everything then.  Ebay- ditto nothing really to sell. 

 The good thing is that dh is one that will do whatever he needs to to provide for the family- even if its flipping burgers.  Granted his initial job search will be more selective but as the time passes he will become less and less selective. 

We are planning on growing a decent sized garden this summer so will have some fresh veggies which will run from around July until late September early October depending on first frost.  Mainly going with cucumbers, tomatoes, green peppers.  The extra green peppers will cut up and freeze for use in casseroles throughout the winter.  If I get too many cucumbers may try my hand at canning and making pickles. 

Dear Lorilwayne, This probably sounds ridiculous, but I would go half & half, since neither the strategy of paying off bills in advance nor the strategy of saving all available money is optimal.  Either way, you would be hounded -- by unexpected emergencies in teh first scenario, or by debt collectors in the second.  Just my 2 cents.  Yours in Him, Deb

I lean towards paying off, but also think you should re-analyze your everyday spending, grocery spending, any extras, and see what you can eliminate or greatly reduce.  Any savings there could go to the reserve.  Are there things at the grocery store you can eliminate (or reduce) buying by simply reusing items at home?  Do you eat out, or buy coffee, breakfast or anything on the way to work (or at work)?  Some people think the "little things" are just that, but spending on little things, or extras when you go to the store, can add up.  These things may not provide a great amount of $, but they can help... You mentioned kids - are they teenagers that can get summer jobs?  Is your husband good at fixing things?  We have a retired friend who started doing small repairs and maintenance on lawn mowers for people, just for some extra cash.  He ended up with pretty steady stream of customers.

Someone had mentioned going 1/2 and 1/2- That is something that I too had considered.  I have thought about putting the money into the savings until I could pay off the bill in full.  As for analyzing the money (groceries etc.)  I already shop the sales and stock up and use that as a method.  I figure it is probably best to also start off the period- (late August) with a stocked pantry- that way we could get by with less groceries when the money decreases. 

As for our kids getting jobs- I hate to have them do that completely.  Once you start working you don't stop.  You only have one period of your life that you don't have to work- both my husband and I would like them to have that as long as possible.  Both my husband and myself worked the majority of our youth and we really want more for our own kids.  However we realize the value of work ethics too.  Its something we have tossed around.  Our youngest is going to be detasseling to earn some money- but with that it will probably be to get him something fun that we were planning on getting him for Christmas that now we will more than likely not be able to.  (He's only 12.  Even with that purchase he would still have money for savings.)  As for the two girls- they are busy enough in sports that their contribution will be to help keep up the house- make some of the meals, do the laundry so that with me working more it will take some of the added pressure off me.  Now an odd babysitting job here or there or some lawnmowing isn't beyond the realm of possibilities- and I know they would given the chance. 

As a side note- we are trying anyhow to get as many bills paid down as possible.  Next years income will be the determination for our oldest daughters financial aide FAFSA form.  If we can live on less we won't have to make as much which will mean she would show more need and possibly qualify for more educational benefits. 

lorilwayne:

As for our kids getting jobs- I hate to have them do that completely.  Once you start working you don't stop.  You only have one period of your life that you don't have to work- both my husband and I would like them to have that as long as possible.  Both my husband and myself worked the majority of our youth and we really want more for our own kids

lorilwayne, I wanted to say that I'm glad I'm not the only one who feels this way.  So many people say that they put the kids to work to teach them a good work ethic or to make them contributors to the family.  I took a job in high school, and my mom & dad hated it.  We weren't rich by any means, I never got an allowance and we struggled. My mom believed school was my job, and knew the only way I could go to college was on scholarships.  She was right, I was granted a full ride to several schools for good grades (which I didn't take advantage of, that's another story). I still have a great work ethic and I'm aware of how to manage my money, but my mom never put me to work to teach me that lesson. Instead she taught me to rely on myself and how to manage a household.

 In your situation, I think you've already gotten some good advice.  I do like the 1/2 & 1/2 idea that Deb had mentioned.  That way at least you have some saved back for emergencies, but can pay down on the bills to lower the balances/obligations later on when you're crunched for money.

That is interesting insight.  I came from a family where school was most important and our only obligation.  We were expected to do well and if we struggled, tutors came in to help.  WE were not rich at all but most of our $$ went to school (public and private) and braces.  I grew up in South America where young people study and work wasn't the norm. Also in South America what your parents say, that's what you do!

 My DH worked as soon as he could,  so did his siblings.  DH did well in school but he enjoyed working more and the $$$ he made.  His siblings did the same and I don't think any of them gave college a thought except when stuck on a job and no education to get ahead.  By then, they had kids and college involved even more sacrifice.  

With my little work experience of my youth, I had 2 jobs in college, supported myself in a private university also with the aid of scholarships and living extrememly frugal. DH says that having college educated parents is a big influence.

Just thought would give you an update.  Today was the last day actual working day at hubbies job.  We have been looking and have some applications to go out.  In the meantime I'm working 32 hours over most weekends at one of my jobs and on June 1 will go full time at my other job (36 hours a week.)  That still will give me 2 days off a week.  The kids are keeping up the house for the most part.  Next week is a lighter week for me work hour wise so I'm going to get some spring cleaning done then.  I have already thanked the kids ahead of time telling them that without their help there is no way that I could do what I need to do.  In the meantime hubby is going to Job Development Monday to see about direction if they have any.  He has 2 applications ready to be placed and a 3rd resume/cover letter ready to go.  There are pro's and con's to each of the jobs however just hoping the right one comes along soon. 

As for the extra money- in the meantime just going to keep the money in the bank and see what happens.  As the situation settles down then we will use this money to repay the bills.  Once we get down to 1 car payment and have the 1 credit card payed off I will cut back to 24 hours at the one job.  In the meantime the tennants moved out of our rental property which probably means about a $500 cut into our budget a month however it also opens up the option that makes the house more marketable to sell.  Time will tell and what is meant to be will happen.  Otherwise will probably turn it around for another rental period.  When it rains it poors but survival is the only option.  In the meantime it is a valuable life lesson for our kids to watch and learn that sometimes you do what you have to do whether you like it or not.  You just get through it. 

Lori