Tallying Up My New Savings Plan: December and End of Year

Tallying Up My 2015 Savings Plan: December and End of Year

Previously, on Nicole’s Budget: After discovering that I needed to save a lot more for freelance taxes than I had been previously saving, I set up a series of sub-savings accounts. Every Friday, I tally up all of the freelance payments I’ve received that week and put 20 percent towards taxes, 20 percent towards debt, and 10 percent into regular savings.

I have a lot I want to discuss—a lot—about spending most of 2015 living on 50 percent of my pre-tax freelancing income. Expect most of my posts this week to be about how my savings plan changed my life, how it was only possible to do this because I was earning more than enough money (key point), and how I plan to update my savings and debt strategy in 2016.

But before we get to that, let’s look at the December numbers.

In December, I received $7,492.26 in freelance payments. Here’s what I put into my sub-savings accounts:

Taxes got 20 percent, or $1,498.45.

Debt also got 20 percent, or $1,498.45.

Savings got 10 percent, or $749.23.

This left $2,567.50 for my checking account.

Regular Billfold readers will notice that I received around $4,000 more in freelance payments than I was expecting. I was planning on December being a slow month, but I picked up a few extra gigs and—more importantly—many of my clients decided to make all of their outstanding payments before the end of the year.

So yeah, I kinda ended up with a mini-windfall this month, if you count a “windfall” as “money owed to me for work completed this year.”

I’ll tell you what I did with the extra cash later today.

Now let’s take a look at how I did this year.

Total freelance earnings for 2015: $63,571.12. This does not include the portion of my earned income that went towards Paypal or Patreon fees, which I’ll have to calculate before I start my 2015 taxes. It represents every penny of freelance income that entered my bank account this year.

In 2014, my freelance earnings came to $43,059.02 (and yes, I did a 2014 earnings round-up post if you want to read about where I was a year ago), so I increased my income by $20K this year. Technically, $20,512.10.

This year, I put $11,291.60 towards 2016 estimated taxes (including the fourth quarter payment coming due on Jan 15) and paid $5,443.00 towards 2015 taxes since my CPA and I underestimated my 2015 tax burden.

I also paid $12,806.17 towards debt this year. I have $8,364.08 to go.

Lastly, I have $3,604.18 in savings. This represents two months of basic living expenses (rent, food, bills).

Creating this savings plan was absolutely the smartest thing I did financially in 2015. What about you? What was your biggest 2015 financial accomplishment?

Support The Billfold

The Billfold continues to exist thanks to support from our readers. Help us continue to do our work by making a monthly pledge on Patreon or a one-time-only contribution through PayPal.