Saving money is like a game to me. I find it a fun challenge that pays off almost every time. There’s strategy involved, a lot of hard work, sacrifice, and then watching it pile up in your pocket. Now that I no longer have steady employment, the money saving game has been taken to a new level. I’m taking it upon myself to not only pay my bills this summer, but also stash some cash away for the future.
When I was employed full time, I was saving upwards of 60% of my pay. I had multiple automatic transfers that would pull funds out of my checking account and funnel it to retirement, general investments, and cash savings each month. I didn’t have to think about saving because these automatic draws forced me to save each month.
Since beginning this freelance journey, I stopped all but two automatic transfers. This was super hard for me to do! I knew I had to do this because I’m not longer getting a consistent paycheck every 2 weeks. As a freelancer, I get paid when I kick-off and complete projects, so the timing varies. The two transfers I kept set up are for my Roth IRA and for one after-tax investing account. I view these transfers as “bills” that I have to pay each month. This helps me when setting up monthly sales goals so I know how much I need to cover all my “expenses.”
When I left my job in April, I made a goal for the first 6 months to make enough sales to cover all my expenses (including my IRA and investment deposits) and to not draw any money out of my savings account for bills. So far, so good! I think that this is a good place to start, but now I’m ready to make a stretch goal and really reach for more. My stretch goal is to save an additional $2K to $5K this summer.
There are two ways to go about meeting this goal:
- Increase the income
- Lower the expenses.
My expenses are already lean, but there are some small ways I could save more by slashing the grocery and going-out/entertainment budget. Living in Asheville makes this really hard! There are so many breweries and restaurants here with nice patios. Sometimes it’s “necessary” to grab dinner and drinks after a long workday. But, with this new goal in mind, I will have to forgo the urge to spend money on these luxuries and chose free activities. I’ll also be focused on increasing sales in my business this summer to increase my income. I’m looking for one more digital marketing contract and another web design project. Between lowering the expenses and increasing the income, I hope to hit this goal!
Money management is not much different when you’re self-employed, but you do have to be more mindful. When I took this leap, I didn’t want to be taking a step back financially, I wanted to be taking a step forward! I try to stay a month ahead of my bills and funnel as much as I can to saving for the future.
“Learn how to get control of your money or the lack of it will forever control you.”
Thanks for Reading,