January 2020 Savings Rate
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A liiiiiitle bit of a scary number that has me thinking WTF did I do jumping into freelance life?! 😬 But I’m still confident that I’ll reach my goal of making 6 figures this year and saving 60% of that. I have 7+ months of emergency funds saved up, which I’m trying not to touch. Recently Sherry of @saverspender was talking about freelance life and said something that really resonated with me:
If you want to freelance but your money management is a mess, please don’t. If you can’t handle high cash flow and then NOTHING…this life isn’t for you.—Sherry, @saverspender
I am very confident in my ability to handle money well, but I think for this exact reason (a basically zero income month), Sherry is 500% right. I’m still a little freaked out about my high cash flows then nothing, but I’d be PANICKED if I didn’t have a fully-funded emergency reserve. Anyway, on to my January money diary breakdown….
Savings: $1,680.00
Even though I had no income, I still am trying to contribute where I feel comfortable with my different accounts. I don’t have a 401K or HSA right now and am prioritizing my tax-advantaged Traditional IRA.
Why a Traditional IRA instead of my Roth IRA? So I can do a Roth Conversion Ladder when I reach Financial Independence. Not going to go into the nitty-gritty of Roth Conversions Ladders, but essentially it’s to minimize taxes. Google it.
In other major news, I opened a brokerage account in my name for my BFF. She’s not the best with money so I’m going to invest $200/year for her birthday/Christmas and then give her slowly when she needs it in the future. She’s aware I’m doing this in lieu of presents. I’m hopeful that eventually, she’ll be better with her finances and then I can even do it earlier to handle on her own.
401k: $0
HSA: $0
Traditional IRA: $1000.00
Checking: $0
Emergency HYSA: $50.00
Travel HYSA: $215.00
Big Event HYSA: $215.00
Brokerage: $0
BFF Brokerage: $200
Income: $450.94
It may seem like I’m doing nothing all day, every day with this pitiful income, but I’ve actually been working on several design projects. None of them have wrapped so I’m still waiting to send invoices. Hoping that everything will be done by the end of February so I can flow in some cash.
💰 Paycheck: $0
👕 Resale: $235.05
👩💻Freelance: $15.00
💵 Cashback: $55.51
📈Interest: $31.94
🎁 Gifts: $0
📈Dividends: $0
Expenses: $2,227.75
My expenses relative to last month are down by $736.36, but still relatively high for me. I’ve been going on (small) weekend trips that added up to ~$200. I wanted to take full advantage of my flexibility and jetting off on three-day weekend trips because I can! This month I’m cracking down on superfluous spending.
February is going to be a month where I’m spending on friends birthdays and more travel, so I’m going to be extra mindful of my spending until paychecks come in. I’m really not big on budgeting, but the goal is just to not eat out and
The goal is to keep it under $2K. I think this is doable since water/power bills aren’t due this month. Look at that utility bill! Everyone I’ve talked to says we’re spending way too much. I know Courtney (@eoab__) would just die. I’m embarrassed to share with her how much we pay for electricity bimonthly! I’m thinking I need to call the energy company to see if they can do an audit of our home.
🏡 House: $950.00
💡 Utilities: $258.82
🚕 Transportation: $14.03
🥦Groceries: $18.62
🍽 Food: $71.43
🍹Drinks: $32
🛍 Shopping: $46.89
💻 Work: $146.72
🎥 Entertainment: $28.41
✈️ Travel: $194.84
🚙 Car: $55.99
🏥 Health: $395.59
🎁 Gifts: $14.30
Misc.: $0.00
Here’s to manifesting a high-income month in February. I need to get that money honey to stay on track for a solid 60% savings rate!
xo, Catie
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