Checking In With My Savings Plan: January 2017 Edition

Savings accounts are great for low-cash-flow months.

In January, I received $2,665.11 in freelance earnings. Here’s what I put in my sub-savings accounts:

Taxes got 25 percent, or $666.28.

Savings got 10 percent, or $266.51.

That left $1,732.32 for my checking account, which began January with a starting balance of $927.65 and has a current balance of $453.97—and that current balance includes a $1,000 transfer from my savings account to cover the gap between my earnings and my expenses.

Before everyone starts worrying, be aware that this is a cash flow issue; I’ve done a lot of work on a job that won’t pay out until the end of February, at which point I will put that $1,000 back into my savings.

It’s a little hard to tell how much money I’ll earn in 2017—freelancing is, like most things in life, unpredictable—but based on the work I’ve booked for Q1 2017 and my educated guess about what might happen next, I’m preparing for this year to be a $60K or $65K year, not an $87K year.

I mentioned this earlier on The Billfold, and I also wrote about it on The Write Life, and both times people responded with variations of “don’t sell yourself short!” Which… I’m not. I am fully prepared to earn as much as possible, and if that happens I will embrace it.

The $60K estimate is about spending, not earning. It’s about me taking a serious look at everything I usually do in a year, especially big-ticket stuff like travel and conventions, and asking myself “okay, which of that stuff am I not going to do this year?”

So that’s where I’m at, right now. It’s interesting to run the math on what went out of my checking account this month and come up with… $3,206? Is that what I spent this month? $2K went to rent+food+bills+health insurance, and the leftover $1,200 went to business expenses, charitable donations, hair and clothes, and spending time with friends—and I’m fine with that.

We’ll see what happens this month.

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