I’ve Stopped Letting “Extra” Money Disappear

One of my minor bad habits over the years has been occasionally acquiring small amounts of money — typically anything under $100 — and immediately putting it in my slush fund, where it inevitably gets spent within a month. It might just as well never have come into my life at all!

During the last five years’ worth of financial education I’ve had periodic crackdowns on this habit. For a little while I was putting all “extra” money in my Roth IRA, but I haven’t been seriously contributing to that for several years while I built up my giant Life Fund instead. (I’m starting in on the Roth again next month after my last 403(b) contribution is made.)

I’m going to have another go, though, in this season of freelancing/volunteering. Actually, I’ve already started! This month I cashed in $94 in credit card rewards and got a $60 reward from Saverlife. Transferred them both immediately to my emergency fund. (Side note: Saverlife is worth doing! You have to link a bank account and it has to end each month for six months $20 higher than it was at the start of the month, but then you get a $60 payout. I mean, I’m not retiring early here, but $60 for ten minutes of setting up the account and autotransfer and then waiting around doing nothing for six months is just fine.)

In August, I’ll get about $85 from Ebates and intend to do the same thing. (Side note: that’s a big Ebates payout for me; some of it is from buying contact lenses, some of it is from godaddy for setting up my professional editing site, and some of it is a referral fee from the blog: thank you, person who clicked the referral link, for helping keep the lights on at The Single Dollar!)

Capturing all the extra money is much less significant than making a higher salary would be. But given that I am where I am, capturing this kind of money is better than not capturing it, right?

Freelancing: Then and Now

Although I still have a few paychecks coming from my old job, I have no further work responsibilities — those ended June 30 — so I’ve now officially been a freelancer for two weeks. While I’ve always dabbled a little, with side hustles ranging from a few hundred to a few thousand dollars a year, I haven’t been fully freelance since I returned to grad school at age 26. I’m now 39, so that’s 13 years of steady paychecks. (Brief pause while I bemoan how little financial progress I made during that time.)

During the four years between college and graduate school, I was a full-time employee for only one year, and a freelancer for three. Those three years were a wild ride in many, many ways. I often wonder what my life would have looked like if I’d spent them in, say, law school, or if I’d continued with the job I started right out of college (it wasn’t the right job for me, so I’ve always been pretty glad I didn’t continue with it, despite my weird life path since.)

I’ve been thinking a lot over the past two months about what it was like to freelance then, comparing it to “now.” Here are some preliminary thoughts — though I’ll probably have more in six months or so.

In my early 20s I looked for, and took, every kind of work that would have me. Ultimately, I let my freelance career be led by others: the kind of work I was getting the most of, which was a little random, led to more work in that field, and about 1.5 years into full-time freelancing I was making enough doing that so that I just did that. I started to specialize. But if events had fallen out differently I might have pursued a different angle. I was really being driven by who was offering me money rather than by my interests. And especially during that first 1.5 years I said yes to the most random stuff, because I desperately needed money. I spent a lot of time on craigslist looking for small gigs, and got a few more other things via word of mouth. I remember one gig where I held a dog on a leash outside NBC for a couple of hours (it was a publicity thing). I think that officially qualifies as the most random!

Also, I was just generally afraid to go on vacation, or leave town for any reason, or not pick up my phone. I did lose gigs sometimes because they simply went to the first person who picked up. But sometimes I would arrange my schedule around something that just never materialized — I remember one month I really wanted to be out of the city for financial and social reasons, but I was supposed to start work on a new project so…. And it just didn’t happen. Sigh.

I definitely feel some of that same reluctance to say “no” now. A kind of professional FOMO. I might not be that interested in the specific job…but if I turn it down, what if I never get offered anything again? I think I will probably end up saying yes to pretty much anyone offering me work in my price range this year.

That’s a big difference though: I have a price range! I’ve set a minimum amount I’ll accept per hour and I’m determined not to undercut that rate.

I can do this now, when I could not do it then, for two reasons, one of which is much more important than the other. The less important one is that I am much better networked now than I was then, and am confident that if I turn down work that isn’t worth it, I will get other work from other sources. The more important one is that unlike then, when I typically had an average of zero dollars in my bank account, I now have an absurdly large cash reserve. I ballpark that at my current (granted, quite low) spending level it’s about three years’ worth. So I just don’t feel compelled to undercut my rates.

Another difference is that, while I am open to work that involves being on-site, most of the work I’m looking for now is remote. That will help a lot with the vacation problem I had in my early 20s, when virtually everything I did required me to show up in person. I’m not planning major international travel that will take me out of reach of my email for more than a day, and there’s no reason why I can’t go hang out in my friends’ living rooms and edit or research/write.

A third difference: health insurance. I just straight-up didn’t have it for several years in my 20s. I’m basically a very healthy person, so I really only need coverage in case of catastrophe. However, I am going to get that coverage now: because the ACA has made insurance available in a way it wasn’t in my 20s; because I am older and the likelihood of a catastrophe has gone up; and because I can afford the premiums now, when I simply couldn’t spare a dollar at age 23.

So: do I feel better or worse about freelancing at this point, vs then? I sort of don’t know. Financially I definitely feel much more confident, and that’s a vast improvement. It also affects me psychologically on a day to day basis. I used to worry so much about money that I didn’t really take advantage of the many days I had “off” from work (read: nobody had hired me.) Sometimes I read or went for walks or went to free events, but I didn’t do a lot of civic engagement or self-improvement, which is one of the things I regret when I look back at that period of my life. Now, since I am not concerned about my finances, I feel much more able to take on unpaid projects on days I don’t have paid work to do. That’s a good thing, especially since much of the point of this “freelance” year is really to volunteer.

On the other hand, I have to admit that I feel a bit weird about becoming a freelancer again at age 39 — when I am also not FI. At 23 it felt kind of normal to be working a bunch of oddish jobs. And I also had a fairly clear career path in mind, though ultimately I turned away from that too and went back to grad school. At this time of life it feels much less conventional to pause full-time work. Not totally unheard of or anything, but certainly kind of weird. I do want to go back to full-time work eventually, whether it’s a year or three years from now, and I worry that when I want to, I’ll have trouble finding a job I really want to do. On the other hand, maybe taking this period of 1-3 years will ultimately be a good thing for my career. It’s just difficult to know from this vantage point. Managing feelings of uncertainty: that’s a full-time job in itself!

Net Worth Update: June 2018

Well, it’s that time again. I do use my finances to cheer me up, and I need more cheer right now.

My expenses were on the high side this month because of moving, but I also had a good month of freelance income — I took home $750 — and my second and third super big checks from work because of the summer school class I taught on top of my normal salary. So I was able not only to easily pay the moving expenses but also to put quite a bit in savings.

OH YEAH, and I blew out a tire in 110 degree heat while I was moving! Very exciting! Luckily, before it went I knew something was wrong — car started shaking — and I’d slowed down and moved to the right lane. I was also within sight of an exit ramp and not in the middle of nowhere, but in a big suburban town. So I was able to get back on the road with two new tires in under three hours, including a bunch of waiting around (for the tow truck and then at the tire shop.) Why a tow truck, you might ask: well, half my worldly goods were in the trunk on top of the spare tire. If I had absolutely had to, I could probably have shifted most of that, but honestly it was worth the $90 I spent on the tow. Also, I have never changed a tire under live conditions; in theory I know how but… And it was 110 degrees and I wasn’t at my best. So I feel fine about it, especially because I got a good deal on the tires themselves so the total cost was only a bit over $300. No big deal. And I was and am glad to be safe and to have made it across the rest of the country successfully. I’ll shift some $$ from my emergency fund next month to cover the cost.

OK, now that we’re talking about cost: to the numbers!

Continue reading “Net Worth Update: June 2018”