Paying Myself and the Minimal Budget

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:

Fixed Expenses: $475/month

Rent: $400 (includes utilities) — I’m moving back to Low COL City, The Midwest, and back into the greatest housemate situation. I love my housemates and their pets, we all get along great, and overall I’m really excited about living there again. The dirt cheap rent doesn’t hurt.

Phone: $25/month — I share a family plan with some friends.

Insurance: $50/month — this is an estimate based on my previous insurance situation (covered both car and renters’ insurance.)

Other Expenses: $425

Cash/food/slush: $250 — this plan is very doable, though it is predicated on Not Buying Stuff and Not Buying Takeout. Most days I should be able to eat either lunch or dinner or both at one of my volunteer places; my housemates and I also often cook for each other. The biggest problem here, I think, is going to be just not spending money on the things I’m used to spending some money on: travel, concert/theater tickets, etc, etc, etc. Functionally, I’ll be doing a no-spend year, though I’m still working through what exactly that means to me. (Probably something else I’ll be blogging on during the rest of this year.)

Fuel: $50 — this is about one tank of gas. That ought to be enough for getting around town for a month (it’s a very small town!) especially considering that I plan to do a lot of biking until it gets too cold.

Donations: $50 — these are automatic donations I set up a year or so ago. I give $7 a month to 7 organizations. It’s not much, but it’s regular and it’s important to me.

Clothing: $25 — this is a sinking-fund contribution, not something I will actually spend every month. I like to keep sinking funds though, because when I do really need something, I have some dedicated money available for it even if I need to take the rest from savings. This winter I know I’ll need a new hat, and almost certainly a new coat, so I want to keep building up this fund for them.

Personal care/medical: $25 — ditto, sinking fund. I use this not for major medical issues (I have an HSA right now, and/or would take what I needed out of my e-fund) but for routine stuff: period supplies, over the counter medications, small co-pays. I also use it for haircuts a few times a year. I don’t do manicures or makeup, luckily.

Repairs/maintenance: $25 — ditto, sinking fund. I use this for minor car things (oil changes) and occasionally for something computer-related, like replacing the power cord for my laptop. I might get a new battery for the laptop this year; it’s needed one for forever, but I’ve been making do by just plugging in all the time.

Savings: $100

Wait, I’m going to pay myself out of savings and then save? Yeah, I am. This is money I’ll transfer to my Roth IRA every month. It’s a tiny amount, obviously, but I still think it’s important to save for retirement even if I have literally no income at all.

Grand Total: $1000

There’s one glaring absence there, which is insurance premiums (other than car/renters.) I’m pretty sure I’m going to go without life insurance; there’s not a lot of need for it since I have no debt and no dependents. That leaves health insurance. I’ll be getting an Obamacare plan, and I think that is going to cost somewhere between $200 and $300 a month until the end of the year, although that’s TBD. At that point, I will have to assess what I expect my income to be in 2019. I expect it to be low enough that I’ll qualify for a subsidy, or perhaps even Medicaid, so my costs would change significantly. Again, I’ll probably write a longer post about that later this summer, when I’m actually getting the plan and making the decision. The short version for right now, though, is that I think I’ll pay premiums out of my Life Fund during the rest of this year, which will increase my $1000 “salary” every month. So that number is subject to revision pending figuring out exactly what kind of plan I’m getting.

8 thoughts on “Paying Myself and the Minimal Budget

  1. giulia says:

    Seems a good plan, like to read new update/progress soon I’m sure it will be a success:D

    1. thesingledollar says:

      Thanks! It’ll take a while to know how it’s working but I’ll definitely keep the blog up to date.

  2. Hey, C! That’s awesome that you’ve put yourself in the financial situation to be able to support yourself, whether you work or not. Very cool. Not being chained to a desk/syllabus must feel great.

    I really like how you are still contributing to retirement throughout everything and aren’t losing sight of that.

    Oh and that rent you pay is awesome! That’s great that you can go back. Score!

    1. thesingledollar says:

      I hope it works out! I mean, I know it will work out for a while, because I have the money. But eventually I’ll need to have real income again, so…fingers crossed!

  3. Chonce says:

    Wow that’s an awesome budget! That rent is the lowest I’ve seen in years lol. Good luck with it!

    1. thesingledollar says:

      The rent is AMAZING. 🙂 It’s because it’s a house share. Apartments are also quite cheap there but more on the order of $600-800 plus utilities. Thanks!

  4. Jason says:

    Sounds like a really good plan. Are there any universities in low-cost city or within a reasonable commuting distance for some adjunct work? Have you ever thought about Western Governor’s University too. I know someone who had a similar situation as you and they really enjoy it.

    1. thesingledollar says:

      I need to look into whether WGU ever hires anyone in my area. I’m not sure they do. But I’m definitely interested; they pay surprisingly well for a remote job. As for adjunct work, I might pick some up. I’m at least going to ask around. I don’t want that to be my full-time gig but one class a semester could be a nice part of an overall freelance income.

Comments are closed.