Now, just because this spending is unimportant to you does not mean it is easy to cut out. It means sacrifices for you and your family and it also requires that you break many of your family's entrenched spending habits. Every time you question whether you want to break a spending habit, you must ask yourself whether this item or service is more important than your child's private school education. Even the smallest of unplanned purchases will make it more difficult to pay for private school.
To use the financial vacuum calculator that I created for last month's post, it was necessary to determine your monthly expenses, monthly savings and monthly debt repayment. Of the monthly expenses you recorded, separate each expense as either fixed (same amount every month) or variable (amounts that change from month to month). Take those variable expenses and add them up–let's call that sum your monthly variable cash outflow.
When it comes to managing your money it is always easier to manage it in smaller chunks and over a shorter period of time. Therefore, it is easier to manage your family's cash flow on a weekly basis rather than monthly. On a monthly basis you'll overspend but on a weekly basis you'll find it easier to stay on target.
So take your monthly variable cash outflow and turn it into a weekly cash outflow by multiplying it by 12 and dividing it by 52. For example, if your monthly variable cash outflow is $2,000 your weekly variable cash outflow is $461.54 ($2,000 x 12 / 52).
That weekly variable cash outflow becomes the maximum amount you are able to spend every week. Therefore, if you purchased a fancy $5 coffee every weekday, then there is $25 fewer dollars available for other variable expenses like eating out, nights out and movies.
Setting a maximum amount you can spend every week on variable expenses gives you a target. If you do not spend more than that maximum every week, your family's financial vacuum will just about disappear. You will then be able to put the money uncovered in last month's financial vacuum calculation towards private school tuition.
Now, not every family will be able to find all the money for private school tuition just from the money recovered from their financial vacuum. For many, further spending sacrifices will need to be made. We'll explore cutting back on variable expenses next month.