Possible jump in income: Thinking aloud

My editor friend called me this week and asked me if I'd be interested in writing a weekly column on a really cool topic for about a year. The pay is...definitely worth my while. She asked me to write 3 sample articles in the next few weeks, and if she likes them and her boss likes them, I can have the job.

But I already work around 20 hours a week, plus volunteer work. My partner works full time. Our son spends only 24 hours a week at school, and he spends another 5 hours a week being babysat by friends and family. As it is, I do a lot of my work in the evenings and on weekends. The summer is even worse. He's at camp less than 15 hours a week, and there are a couple of weeks at either end of the summer with (gulp) no camp and no school.

But what writer would say no to writing a weekly column for a world-famous publication on a topic that she really likes?

And of course, I can think of a few ways I'd like to spend the money. Always one to count my chickens before they hatch, I've been enjoying daydreaming about what I'd do with all that cash. I don't want to give you an exact figure yet, but it would mean our household income would go up more than 50%.

I could:

Save more for retirement, of course. I'd have to decide if a Roth IRA is still the best bet for me, or if I should open a SEP-IRA. But I'd dearly love to max my spouse's Roth for the first time. If he also continues to contribute 15% to his workplace plan, that would put us way ahead of my goal for the year of adding $10,000 to his retirement accounts.

Fix that hole in the floor, and other household problems. My old house really needs some work. I had been planning to spend about $3000 on the house this year anyway. Perhaps this increase in income would make me comfortable spending as much as $5000 instead. That would probably be enough to fix the broken floor and maybe also do one other minor project on our first floor.

Hire someone to clean my filthy house every other week. I really don't like to clean, and it shows. Working more, and earning more money, would justify having someone else run the vacuum cleaner now and again.

Send my son to the camp we love that is only 15 hours a week for most of the summer, but also spring for a couple of weeks at another, more expensive camp that will keep him for longer hours and give me more time to work.

Save money so my spouse can eventually reduce his work hours. Don't tell him, but I'd really prefer that he reduce his work hours NOW. That would make it much easier for me to take on this new project. I know he wants to go back to working part time eventually (he worked part time for about a year when our son was a toddler), but he wants to keep his full-time job for at least another year. So I want to have a big nest egg a year from now. That way, I can keep freelancing and working my other part-time job, and my spouse can work part-time and do a lot more of the work involved in caring for our son.

There are some catches, of course. I will be paying exponentially more taxes. Currently my taxes are very low because my income is low, and I have a lot of deductions. My freelance income was less than $5000 in 2007. This year my freelance income will be much higher. I'm currently stashing 30% of my freelance income in a savings account earmarked for taxes, but I haven't had to file quarterly. If I do this new project, I'll probably need to start filing quarterly, and I think many of my current deductions (I usually take the EIC, for example) will phase out. I think I'll start out saving 40% for taxes until I get a feel for how much I'll owe. If I save too much, well, there are worse things.

And the new gig would only last for a year. It's pretty likely that I'll be able to get other work from the same source or from someone else when that year is up, but it is contract work and therefore not as reliable as other jobs. That's why I'm trying to use the money either to boost our savings or to do one-time work on our house, but not to greatly increase our standard of living. The only regular expense I'd be adding is the house cleaner, who could of course be let go if my income drops back to its current level.

As you can see, I'm trying to neatly dispose of most of the income in a responsible way BEFORE it's burning a hole in my bank account. My hope is that I can do this job for year without significantly changing the way we spend money. Right now, we don't really need this money because we're used to living without it. And if all goes well and my partner reduces his work hours a year from now, our income will drop back quite a lot, so I want to be prepared for that.

This post is rather disorganized, but I'm just thinking aloud here, trying to think about what this new gig will mean for us.

As always, comments are welcome....