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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?

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!

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”

Last time I discussed my upcoming volunteer year/freelance year/career transition/whatever this is, I wrote about my no-income budget. But I do in fact hope to have some income! As a matter of fact, even though I wasn’t necessarily intending to start seriously scouting for editing and writing work until July, I’ve already found some. More accurately, I did “find” some by cold-emailing old contacts, but some was referred to me by generous friends–you know who you are! By the end of June I currently project I will have billed, though not necessarily received, around $1700. If this pace keeps up I might end up in better financial shape than I thought I would — whether that’s just depleting my savings more slowly than planned, or even adding a bit to them. (My favorite part is that the three projects I’ve either completed or booked this month use three different skillsets and came from three distinct sources. Diversification!)

Freelancing is where the old YNAB method of living on last month’s income really comes into its own. I’ll know in advance which months I’m going to have to be very strict about the no-income budget, and which months I can maybe loosen up a bit. I’m going to have to feel this out as I go along, but I’m thinking that up to $1500 of income a month will look pretty much the same as the zero-income budget (including health insurance premiums and setting some aside for taxes.)

However, if I make more than $1500/month, I’ll start by allocating any extra money this way:

25%: tax savings

20%: cash savings

10%: retirement savings (Roth IRA)

10%: gifts & donations sinking fund

10%: travel sinking fund

25%: slush spending

I think that’ll be a reasonable balance between saving and spending. What I want to do is to use freelance income both to extend the lifespan of my savings accounts (hence, the cash savings) and to supplement the bare-bones nature of that zero-income budget. 25% of freelance income allocated to slush means that I can go out to eat sometimes, or buy some music, or whatever.

I guess if I unexpectedly do REALLY WELL in the freelance game, and am making thousands of dollars a month, I will end up rethinking this. But since at least at first I’m not going to really hustle, so that I can focus on volunteering, I think this ought to be fine.

This is a nice one! I was so excited about an incoming large paycheck that I couldn’t get anything done for the last couple of days 🙂 Let’s get straight to the numbers!

Continue reading “Net Worth Update: May 2018”

Sometimes I like to pause and reflect a little on how far I’ve come. Last week Facebook popped up a “memory” of the day, five years ago, I finished my dissertation. At the time I had about $19K of student loans, $5K of credit card debt, and maybe $1000ish in the bank. No retirement savings, no health insurance, no nothing. Also, I didn’t have a job.

But even that wasn’t “rock bottom” for me financially. I had some ideas about how to make some money (none of which I had to put into effect since I did get a job about a week later.) I felt I would manage.

What was not really manageable at all, was the situation I was in circa summer 2004. I was renting half of a basement apartment in Washington Heights for $600 a month, and almost a year into trying to get a freelance film career going. I was supporting myself, barely.* But I’d come off a film — and thus had my last income — a month earlier, and nothing else was materializing, despite my calling around twice a week to the few people I knew. Also, right at the end I’d picked up a bad cold, which had gotten better and then come back again, so I was spending a lot of time on the couch in my awful apartment feeling sorry for myself and not doing any of the self-improving things I should have been doing with all that enforced time off.

Then the cold got worse.

What had been a cough became what they call a “productive” cough — I started coughing up phlegm. It was painful. Then after a few days of that, the phlegm turned a poisonous-looking green, and I found that I couldn’t breathe when I lay down, and could only barely do it when I was sitting up.

It was clearly time to go to the doctor, but obviously I didn’t have health insurance. I recall searching the internet (did google exist then? I guess it did) to figure out if I could possibly have tuberculosis. It turned out that if I did there was a government program to pay for treatment, so I guess there would’ve been that.

Frankly, I was really scared at that point.

Anyway, I also searched for sliding scale clinics and found one about a 45-minute subway ride away. This was late evening, I guess, and so I planned to go first thing in the morning. I plugged my cell phone in to charge, setting it on the windowsill above the outlet.

After a night of cat-napping in between hideously painful coughing bouts, I got up, got dressed, and discovered that someone had reached in through the bars on the window and taken my phone.

SO. Off I went to the clinic, dragging myself down there on the subway. I was there when it opened, but I waited most of the day (coughing all the while) to be seen. When I did finally get seen, they tried to convince me I had asthma and made me sit with an inhaler for a while to see if it helped (it didn’t.) Eventually they agreed to do an x-ray, which they had a machine for on-site, which was the only good thing that happened that day. At that point I’d been out of contact with the world for most of the day; I needed a phone so my parents could call me, so the doctor could call me back with the x-ray results, so I could accept work if someone offered it to me. I went to the Sprint store and bought a phone as soon as I left the clinic — using a credit card of course, which is also how I’d paid for the clinic visit.

It turned out I had pneumonia (they called the next day after the x-ray was read.) Luckily it wasn’t a very serious case, as these things go; I took a course of really really huge antibiotic pills (also, of course, paid for on credit) and within a few days I could breathe enough to lie down. It took me nearly a month to be completely back to normal though. I’m forever grateful to Law and Order because in the middle of my recovery period they booked me for a day of PA work, which was money I desperately needed. But when I showed up with a terrible, very loud cough (I wasn’t contagious!) and too weak to do almost anything, they let me sit and guard all the personal stuff belonging to the extras and crew, just about the only job I could have managed in that state.

I honestly don’t know what I would have done if I’d had to be hospitalized. Probably still be paying off that debt today. But I wouldn’t have been in that situation in the first place if I’d had insurance, because I would have gone to the doctor well before the pneumonia stage.

It was a really awful day, though, that day. Stolen cell phone, sliding scale clinic, no idea where my next bit of work was coming from…. I hope I never get back to that place again.

What was your lowest ever financial moment?

*By the next year I was more than self-sustaining, and by the year after that I was in a union and pulling in perfectly respectable middle-class money, which I then gave up to go to graduate school, at which point it took me eight years to get back to the yearly income I’d been at. I don’t know, I don’t make very good decisions generally, I guess.

I’ve been talking a lot over on twitter about my day-to-day freelancing planning. I just built a website with my real name and academic accomplishments, including a “work with me” section for editing, indexing, research-for-hire, and things like that. I need to reach out to basically everyone I’ve ever met and let them know I’m available for those activities. I’ve already started scouting for other writing work, too. In an upcoming post I plan to talk about how I’ll use the proceeds of freelance work.

[Side note: my real name is not a state secret or anything. I just don’t want The Single Dollar to be googleable under that name, because I share my exact $$ numbers. If you are interested in my editing/research services, or know someone who would be, please get in touch and I’m happy to share that other site with you.]

However, my main intention for the next six months or so is not to be a thriving, money-making operation. I’m not going to be massively hustling. While it would be great to replace my current W2 income (given that I’d need to pay SE tax, healthcare premiums, and retirement contributions, that’s about $1500/week gross) I’d be well-satisfied with covering my monthly expenses (closer to $1500/month gross!) and, to be honest, I’d be just fine with making no money at all some weeks or even months. That’s the whole point of prioritizing volunteering.

If I turn out not to have income, my plan is to pay myself a $1000/month salary out of my Life Fund. At that rate, that fund will last for nearly 3 years with no income at all. I’m pretty sure I will make some money in there at some point 🙂

But ok, let’s assume there’s no inflow, only outflow. If I pay myself $1000 a month, here’s how I’ll use it:

Continue reading “Paying Myself and the Minimal Budget”

Considering my big freelancing news, I probably should be more upset that April turned out to be a fairly high-spending month. After I finish getting paid for the academic year, it could be a long time before I see a substantial paycheck again, and it’s certainly true I need to immediately start belt-tightening. But it’s actually fine. I have about $18000 (gross, not net; I’m anticipating about $13000 net) coming in during the next two months, which is an almost unfathomable amount for me, so it’s hard to be too upset over a few hundred dollars extra this month. Anyway, for all the gory details…to the numbers! Continue reading “Net Worth Update: April 2018”

This isn’t my April net worth update — that’ll come eventually. Preview: I spent a lot of money on travel, friends’ books, and family birthday gifts, and the markets were iffy, so, probably not great. However, I will get a really, really large boost in May, because (a) I’m leaving my job and for complicated reasons will get 2.5 months of salary payout (this isn’t a bonus. There are two ways to pay if you are hiring someone for a single academic year: you can either pay the person from July 1 to June 30, or pay them from August 15 to May 15, in which case you end up paying the summer salary when the person leaves. It saves them on health insurance, which is why I guess they do it; my previous employers all took the July-June route which was a lot simpler for me.) (b) I should also get paid for the summer class I’m teaching at the adjunct rate. It’s hard to know how much will be taken out in taxes, but I think I will get somewhere around $12000-13000 after tax from both of those combined. Whew!

Right, but this post isn’t about any of that. It’s about leaving my job. Since I was hired on a one-year contract, I had to decide whether to renew or not. I like many things about this job, but at the end of the day, it doesn’t pay enough to allow me to live a reasonable life in one of the most expensive cities in America, in which I have few ties. It also offers no stability — I could have worked here another year, maybe two, but not more than that. Those two factors together meant that, with some reluctance, I decided not to renew. Combined with that, though, I really want to volunteer on the 2018 fall elections back in the midwest, and I didn’t see any other academic jobs come up that looked so attractive to me that I would miss out on the volunteering opportunity. So, for the first time in six years, I didn’t apply to any teaching or research jobs. I may or may not do a freelance research project this summer (I should hear this week) but either way, by the end of September at the latest I will be completely free of school obligations for the first time in more like 15 years.

This is what I’ve been saving up that Life Fund for; while it’s at $22k now I’m going to put all of my big final payout in there, so I expect it to be at about $35K, plus my efund of $6K or so (this is all give or take a grand by the time I finish summer travel, moving back to the midwest, etc.) My expenses in Indiana are rock bottom, so I legitimately think that even without any income whatsoever I could live on that for several years (!) However, I very much hope I do have some income! I will be putting a fair amount of effort into volunteering, but I also plan to look for freelance work: writing, editing, and so on. (PS, if you have freelance work to pass on let me know! I will probably start pitching PF articles again, which I haven’t done in a while.) I’m really excited to work for myself again. Right now I have a ton of ideas about potential income sources, although many are in perpetually underfunded humanities areas so 90% of them will probably not pan out. But I think I can make it work, and get the flexibility to travel and to invest time in my community, which is what I really want to do. Eventually, whether it’s a year or three years from now, I think I’ll go back to ‘normal’ work, but right now I am mostly just very excited to have the freedom to try this out (ok, maybe 10% scared, so supportive comments are also welcome.)

OK, we can tell how my April has gone by the fact that (a) my net worth update is five days late and (b) I typed “February” above and then had to erase it because my mind is like jelly right now.

It’s been a good first week of April actually! Taught some good classes on subjects I love, did a lot of professional writing — a LOT of it — and got the first copy of my new book in the mail. Just extremely busy. But now it’s Friday night, I met my biggest work deadline, and I have time to post some numbers.

March was a pretty good month. Here’s the spending:

That’s a bunch of green! I traveled the last week of the month, but had already paid for most of it earlier, so I just spent a little bit getting to the airport, basically. I went to see friends so I didn’t have to spend money when I was there. I got a haircut, bought some underwear, made my usual monthly donations.

Slush was the usual: a random collection of stuff! I went out to eat with a friend, bought a couple of new sheet pans, bought a book and a CD, saw A Wrinkle in Time, bought some coffee out, and paid for my Washington Post digital subscription.

What I’m most pleased by is that my food spending finally got under control. I chalk that up to only having school two weeks of March (we had a week of spring break and nearly a week of Easter break.) Turns out when I’m not teaching I find it much easier to eat cheaply!

Despite this good month, the overall net worth numbers don’t look great….

But that’s really just because of the markets. Eh. It’ll be fine. I wish things had gone just a little better because I thought I’d crack $80,000 in March, but hopefully I’ll get there in April. In the meantime, I ended March at $79765, an increase of $1405 — not bad for a month in which my investments lost over $1000!