My Income Is Fully Booked Through August
This weekend, I sat down and made a list of every expense to which I’ve committed between now and the end of August.
I got specific, too. Would that flight require a checked bag fee? Would I end up buying food at the airport, or would the flight be short enough that I wouldn’t have to? Would I share a restaurant meal with friends/family after I arrived?
Whose birthdays are coming up in the next four months? What am I currently paying for Netflix? How many times will I be getting my hair cut?How much does it cost to submit my novel to the Foreword INDIES Awards and the BookLife Prize?
Here’s what I learned:
ONE. If my income stays around $5,000 per month—although I am working to push it higher and recently secured a new client—and if I want to save 15 percent of my income, every penny of that income through the end of August is currently allocated for savings, taxes, and upcoming expenses.
TWO. These expenses include: business costs, overhead costs (rent/bills/food), non-overhead regular expenses (Netflix, haircuts), every single birthday in my immediate family, and one weekend trip each month. These expenses also include all of my annual healthcare exams, both the ones that are theoretically covered by insurance (Well Woman) and the ones that are definitely not (eye exam).
THREE. These expenses do not include: new clothes (I have plenty of summer clothes from last year), Lyft rides (I’ll take the bus), books, movies, restaurants that aren’t already assumed as part of travel costs, etc. etc. etc. To do all of the things that I both need to do and want to do this summer, I’m going to have to be very careful about not buying extra stuff.
FOUR. Interestingly, my personal non-overhead costs (everything from “Netflix” to “eye exam”) and my business costs both hit the same total: roughly $2,000 each between May and August. Last week I wrote about wanting to save 25 percent of my income and pay my business expenses directly out of those savings, and that was kind of a convoluted idea that was based out of my not knowing what I might be spending on my business over the next four months.
So I sat down and figured it out. For the next four months, it looks like my estimated $5,000 income will be divided up as follows:
25 percent to taxes, or $1,250
15 percent to savings, or $750
40 percent to rent/bills/food/overhead, or $2,000
10 percent to business, or $500
10 percent to personal, or $500
The business and personal costs won’t equal exactly $500 every month, but with the expenses I’ve already planned, they should each hit right around $2,000 by the end of August.
FIVE. After August, my business expenses should drop because I will no longer be launching a book, submitting it for awards, or taking it on weekend-trip-book-tours. I should also have a little extra income coming in from the book, although that will likely slow down once the launch/promotion phase ends. (Thank goodness I already have the sequel drafted.)
This means that if I can hold off on personal expenses like new clothes—or a new sofa—until September, I should be able to free up some funds to put towards them.
SIX. If something does happen, whether it’s a true emergency or a desperate need for a new pair of shorts because my current pair (which cost $10 at Old Navy) fell apart, I will have bumped my savings up from 10 to 15 percent so I’ll have an extra buffer in there. If I can stick to the budget I made for myself this weekend, my savings account will increase by $3,000 between now and the end of August. It’s almost a win-win.
Yes, it feels a bit like a constraint. There is literally no budget for “I don’t feel like cooking dinner tonight” or “I don’t feel like riding the bus today.” But I’ve got a lot of things planned for this summer—the book, my nephew’s first birthday, a few trips to see friends while also doing readings at local bookstores—and it’s worth cutting back so I can make these plans happen while also prioritizing my savings goals.
Because if something happens to change those plans, I’ll probably need those savings.
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