Lori and Marek Fuchs have never fought in their 16 years of marriage—except over money. In this column, Mr. and Mrs. Fuchs, a real-life married couple with three kids (ages 12, 7 and 5), articulate their very different approaches to personal finance.
Mrs. Fuchs: Oh boy, I have bad news.
Mr. Fuchs: Wait, let me sit down.
Mrs. Fuchs: OK, good. Well, most-
Mr. Fuchs: Wait, and get a beer…
Mrs. Fuchs: OK. Most-
Mr. Fuchs: And a club sandwich from the ‘fridge…
Mrs. Fuchs: OK, enough. God, any excuse, huh? Look, most of my patients have gone away for the summer, even more than usual. As a result, I’m not going to be pulling in much of an income. What are we going to do?
Mr. Fuchs: Something tells me we should have thought of this ahead of time.
Mrs. Fuchs: We depend on that income for things like music lessons and lot of other essentials and incidentals.
Mr. Fuchs: Well, score another point for bad planning. Glad I can console myself with a beer and sandwich. Anyhow, the interesting thing is that even though we are no longer a nation of farmers, a surprising number of fields are still seasonal, or, at least have seasonal lulls. Psychologist/psychiatrists, your gig, have a classic summer slow period. So do restaurants, at least those operating in non-vacation areas.
Mrs. Fuchs: As teachers, my parents struggled during the summer months. They tried to spend slowly, but you know how that goes. Michael Kresch, CFP, president of Kresch Financial Services in Islandia, N.Y., says that back when teachers generally didn’t get paid during the summer, there were a lot of hungry teachers come August.
Mr. Fuchs: Even these days, planning for a slow season can be tricky. Howard Grossman, for example, is an independent book jacket designer and though he has a slow period in December, he is usually flush with cash. That’s because he is busy in November and bills a lot then—bills that usually arrive in 30 days. It is January that he has to watch out for.
Whatever the precise case with your lull, if you are in a business that has one, you have to be aware of its particularities. That and “you have to be prepared to be your own bank,” says Kresch who is also a CFP.
Mrs. Fuchs: I can barely get to the real bank. Now I have to be one?
Mr. Fuchs: Cute. All Kresch is saying is that there is not much in the way of magic bean fixes here. But if you are facing a lean month or season, you absolutely need to build that three to six month cushion, so you can manage you cash flow….
Mrs. Fuchs: That’s hard to do but it might be easier if I opened a specific account and made automatic deposits into all year, after figuring out how much I need to put away each month to make up for my lean period.
Mr. Fuchs: Kresch would approve of that idea. Too bad he won’t fund it too, huh? But the key is to live by that old Girl Scout motto: Be Prepared. Others take a different tact altogether. David Honor, who owns and manages Fred’s, a restaurant on the Upper West Side of Manhattan, says that summer is always slow. He doesn’t have to budget any different, though. He just has to work more hours, to make up for the thinner staffing.
Mrs. Fuchs: What if you can never manage to see it coming?
Mr. Fuchs: If you are really lousy at preparing and spend too much, Kresch says you should prepay some of your bills while you are making money. Child psychologists/psychiatrists are often busy at the end of the school year, when students are particularly stressed. You, for example, could always prepay then. But considering this involves giving others an interest free loan, that’s a last ditch option. Also, people can always talk to their accountant about how to best plan for your lean month or two. After all, since your accountant earns much of his revenue in April, he’s probably well versed in stretching inconsistent income across a calendar. And if he’s not, you probably don’t want the guy counting your beans, magic or otherwise, in the first place.
Other Great Mate Debates:
Husband vs. Wife: How Much Allowance?
Husband vs. Wife: Let's Switch to Debit
Husband v. Wife: Talking Money Woes With Kids
—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.