Getting Anxious About the Future (Again) and Putting My Financial House in Order

Plus, learning what “enough” really means.

My response, in stressful situations, is to organize what I can—and so, after spending most of Friday night pulling down on Twitter and reading the Washington Post, I woke up early Saturday morning and started cleaning.

After I finished dusting and wiping and scrubbing and vacuuming and doing three loads of laundry, I sat down with my laptop and re-calculated how much money I would receive by the end of the year, as well as how much I was scheduled to earn in January and February and when those checks might arrive. I’m doing better, financially, than I ever have—no debt, nearly $10K in savings, restarting my retirement fund, and donating more to charity—but I still had to reconfirm that I had enough.

Then I got curious about what enough really was.

I’ve said before that I could get by, if I had to, on $1,800 a month. That’s rent+bills+food+toiletries+transportation, essentially. I’ve started bumping that number up to $2,000 a month to cover increased cost of living expenses—like the fact that my health insurance premiums will increase by 19 percent in 2017—which means that I could live a very frugal existence on $24,000 a year.

Technically I’d need $32,000 per year, because I’ll have to put around 25 percent of my income towards freelance taxes.

But how much did I actually spend this year? When you add up not just the minimum expenses but also the cost of running my business, the cost of going on vacation, the cost of getting my hair cut, etc.?

What is my real enough number, now that I’m earning more than enough and have money left over?

I started working backwards, and here’s what I learned:

• I’m going to earn an estimated $87,381 this year, including payments due in December.
• Of that income, $28,030 either has already gone or will go to federal and business taxes. That’s actually 32 percent of my annual income, in case you’re keeping track.
• I paid $8,145 towards debt this year, before I finally became debt free. I’m not counting stuff like the JoCo Cruise booking I put on my zero-interest Discover card (and then paid off) as “debt;” only my years-old debt that I finally paid off in 2017. Cruise tickets count as “figuring out how much money it takes to pay rent and go on a cruise.”
• I predict that I’ll have $10,481 in savings by the end of the year. I know that’s a little more than I predicted I’d have at the beginning of December, and I’m interested to see how it’ll actually turn out.
• This means that, of my estimated 2016 earnings, $40,725 is left over after I subtract taxes, savings, and debt repayment.
• But how much of that $40,725 did I actually spend? Well, $5,500 of it is set aside for a Roth IRA—and who else thinks I should wait on putting it into that Roth IRA until a month or so after the inauguration, just in case—which means I had a potential $35,225 available to spend.
• Since I anticipate starting 2017 with a $1,200 checking account carryforward, it means that of that $35,225, I spent approximately $34,025 of it.

Let’s just round that number up to $35,000. In 2016, it cost me roughly $24,000 to cover my basic living expenses and another $11,000 to fund my business, visit friends and family, go on vacation, go wine tasting, get my hair cut, buy books, buy pink sweaters, make charitable donations, and handle life’s financial curveballs.

So $35,000 might be my enough number.

Technically $50,000, since I’ve got to start putting 30 percent of that towards taxes.

Or $58,333, since I’ll want to put 30 percent towards taxes, 10 percent towards savings, and have $35,000 left over.

Or $70,000, if I wanted to put 30 percent towards taxes, 10 percent towards savings, and 10 percent towards retirement.

I was so close to feeling like I didn’t need all that much to have enough, but I guess life really does get more expensive as you get older and start planning for a future that is simultaneously completely uncertain.

Still, knowing the numbers helps.

Now I’ll go see if there’s anything left in my apartment to clean.

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