Checking In With My Savings Plan: March 2017 Edition

I need to solve this cashflow problem. Probably with more cash.

In March, I received $6,335.07 in freelance earnings. Here’s what I put in my sub-savings accounts:

Taxes got 25 percent, or $1588.77.

Savings got 10 percent, or $635.51.

That left $4,130.79 for my checking account.

However, I owed my savings account $2,000 because that’s what I took out to pay for expenses before my freelance checks came in. My cash flow has been kind of uneven this year—I’ve been earning money, but the checks don’t come every month, which is often how it works—so I’ve been borrowing against savings and paying it back when the checks get in.

But that means new checks aren’t new money. New checks are money you spent a month ago, and your checking account balance is still low, and you might have to take the money you just put back into savings out again.

Anyway. So this month I paid my savings account $1,500—not the full $2,000—which left me $2,630.79 in spending money for the month. Of that, roughly $2,000 goes towards my monthly overhead, leaving me $630ish of actual discretionary cash for the entire month.

I spent $122 buying towels and clothes.

I spent $53 at my local bookstore.

Etc. etc. etc. It goes pretty quickly, especially because that $630 has to cover both business and personal spending.

The point is that I’m starting April with a nearly empty checking account—again—and a savings account that is still owed $500. Plus I want to bump my savings rate up from 10 to 15 percent because I just read The Value of Debt in Building Wealth and I think I could make the plan work for me.

So I need to solve my cash flow problem, and I don’t think I solve it by waiting for the next big check.

I think I solve it by earning more cash.

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