Budgeting

Tools for Self-Employment Folks: So…What’s Really Essential?

As a self-described minimalist freelancer, I’m really reluctant to sign up for new apps and tools to run my freelance business. That’s because I feel like there are only so many things you need. It’s far too easy to get bombarded with the latest apps or tools claiming to save you time and money and the like.

So why get caught up in that madness when you can get by just fine with the bare necessities?

In the last year and a half I’ve been self-employed, I’ve only found I needed to pay for two services: data backup and cloud accounting.

Data Backup
If there’s anything I need to protect, it is all the documents on my computer. Now that I work for myself, there’s no IT person I can call when my computer is on the fritz, and if my documents get wiped out, it’s pretty much over.

Besides saving my documents on the regular on an external hard drive, I use Carbonite, which is pretty simple to install. I haven’t had a data crash thus far (knock on wood). From what I know it doesn’t scramble my data, so if I need to recover my files, they should remain in the same order.

Carbonite came in handy when I switched out my SSD drive last year. Carbonite costs $60 a year (well, $59.99 to be exact), and you can test it out with a free 15-day trial. On occasion I’ll come across a 30% off promotion, which is pretty sweet.

Cloud Accounting Software

Xero the Hero
I’ve been playing around with Xero and the first thing I noticed was their clean interface and easy navigation. If you’ve used Quickbooks in the past, you can convert your files from Quickbooks.

Plus, you’ll be able to integrate with more than 500 apps to help you further streamline your accounting stuffs. I took a gander and you can integrate Xero with apps for time tracking, billing and expenses, inventory, and financial services. And when you invoice through Xero, you can receive payments via Paypal and set up an automatic Paypal bank feed to keep track of transactions.
Xero has also has a separate section for Payroll and Inventory, which is pretty sweet if you have several employees and need to keep careful track of your products. You can also reconcile bank transactions to make sure your records are up to date and accurate.

Right now Xero is offering 30% off your first 6 months. And the pricing is as follows:

Starter: $6.30 for the first 6 months, $9 a month thereafter. You can send 5 invoices and quotes, enter 5 bills, and reconcile 20 bank transactions.

Standard: $21 a month for the first 6 months, $30 a month thereafter. You can enter unlimited invoices and quotes, enter unlimited bills, reconcile unlimited bank transactions, and process payroll for 5 people.

Premium: $49 a month for the first 6 months, $49 a month thereafter. You can enter unlimited invoices and quotes, enter unlimited bills, reconcile unlimited bank transactions, process payroll for 5 people, and handle different currencies.

 You can try Xero out for free for 30 days.

Creating Your Own System Using Free Tools
Now you can certainly create a makeshift system. I have some friends who don’t use many tools and they aren’t really missing out. Of course, it just takes more time and work. If you’re just starting out, you may need to use accounting software just yet.

Here are a few ways on how you can create your own system for invoicing and tracking expenses:

Time tracking: Because I do mainly writing and copyediting and I charge either either hourly or per article, I don’t really need to track my time per project. I still like to track my time, just so I can get a sense of how long things take and I can figure out my bandwidth when new opportunities arise. I am a big fan of Toggl, and use their free version.

Inventory: While I don’t have too much experience keeping track of inventory, there are a few free systems for keeping track of your inventory. You can check out Stockpile, which is 100% free and offers customer support. I think the catch is that the company that created Stockpile is building out other tools that they’ll be charging for. InFlow Inventory also has a free plan.

Tracking assignments: I still use good ‘ole Excel to keep track of my assignments. I include the outlet, assignment name, whether I’ve sent over an invoice, if payment is received, and how much I should sock away for taxes (I’ve heard you should save anywhere from 25-50% for your taxes as a solopreneur, and I save 40%).

Staying on top of deadlines: I use Trello to stay on top of my deadlines for assignments. I’ve also created little cards for each publication I write for with logins, links to editorial guidelines, “pitch banks” with story ideas for each outlet, and other details such as my main contacts, editors’ emails, how and when to invoice, method of payment, and the like.

Tracking expenses: Keeping tabs on your business expenses will save massive headaches come tax time. You can use Expensify, which has a free version, or keep track with an Excel Spreadsheet. I would probably create separate tabs for each month, and organize by date, the amount of the expense, how you paid for it (cash, credit card, debit) and which expense category it falls under.

To figure out which categories are eligible for tax deductions, you can check out a blog post I wrote about the most common tax deductions for freelancers, and Paco of The Hell Yeah Group also has a great post on business expenses that are tax deductible.

Invoicing: You can send free invoices with Invoice Generator. It keeps a history of the invoices you’ve created, which is pretty helpful. I’ve used the free version and have no complaints.

So there you have it. If you want to go barebones with tools and software when you’re going self-employed, it’s definitely doable. You might want to go this route if you’re just starting out and don’t have a lot of beans to spend on running your business.

Disclaimer: This post includes affiliate links to FreshBooks, Carbonite, and Xero. I only endorse and write about products I know and love. 

 

 

 

 

 

 

 

 

How Creative People Can Kick Butt at Managing Money

Illustration by Viet Vu

You just might be scratching your head. Creative people? Good with money? Let’s be clear about one thing: Just because you may put other things above making money: pursuing your personal projects, taking time off to make art, investing in classes and supplies, doesn’t automatically mean you suck at managing your money, or don’t care about having money. We’ve long associated that being passionate about something as an all-or-none mentality, that we have to completely eschew money and the pursuit of it as to not dilute our creative aspirations. Artists have a money stigma. You are stinky rich as a result of 1. Being mega successful, 2. Born into wealth. The rest of us are toiling away, starving for our passions. Otherwise we run the risk of the worst thing we could be as artists: sellouts.

I think that’s a bunch of bull.

We can all agree that money is a great tool to help you reach your goals in life. It’s not something to despise. It doesn’t make you corrupt or greedy or evil. It just amplifies who you already are. And the more of it you have, the better.

Artists are notoriously known for being bad at money matters, and that may be more of a a result of circumstance. It can be tough to budget when you
1) Have issues getting paid in the first place,
and
2) Your money fluctuates like a mofo from month to month.

A lot of people feel as if managing their money can be boring and tedious, I’ve found that it can be an extension of your creativity. As someone who was obsessed with money from a young age, having a good relationship with your money is a process that evolves and grows as you do.

Here’s how creative people can go about being the best money managers:

Know that rules are meant to be broken
There are plenty of approaches, methods, and rules to managing your money, from the 50/30/20 rule to the zero-sum budget and reverse budget, where you save first and then spend as you please.

For me, I used to spend a bunch of time poking around the Internet to learn about basic budgeting principles and systems. I’ve tried Excel sheets, the 50-30-20 rule, as a sort of template. The further I trekked along, the more I figured out my personal spending habits, and adopted a style.

With managing your money, you can learn from the trial and errors of those who have been in the ring, then do some experimenting on your own. From my year of freelancing full-time, I’ve found that paying myself a monthly salary, putting my money in different buckets to help keep me loosely keep track of my spending, then based on percentage, allocate whatever’s left over toward my different short- and long-term goals, works best for me.

I’m not an expert in personal finance nor will I ever claim to be. But what I can claim is that I am super obsessed with taming the money beast and have worked hard at it. For instance, trying to come up with a personalized budget. Since I don’t find much value and monitoring every single transaction,  I’ve put the work up front in devising a system and process that works best for me, then work on auto-pilot 80% of the time. I just make it easier for me to save than not to. It takes time to come up with your personal budgeting style, but once you do, you’ll be able to make serious headway.

The same goes for when you learn a new craft, such as writing fiction, composing a song, learning basic graphic design principles, and so forth. It’s only after you learn the rules that you can break them, and come up with your new style. Gain inspiration and insights from the greats, then adopt them to your own goals.

Treat growing your money into a game 
The rules of financial wellness are simple: spend less, earn more, and invest the rest. Now implementing them? That’s an entirely different story. By approaching wealth-building as the ultimate game, you’ll stay interested. More important, you’ll have fun. What expenses can you cut back on? How can you be the ultimate side hustler?

When I was in high school, I had a friend who was really into Calculus. I personally couldn’t get my head around the subject. My friend told me this: You have to work through the tough stuff. Only after that it starts to get fun. And of course, it’s only after you see results (i.e., I actually have some money in my rainy day fund? Or, the ultimate trip to Japan is going to happen next year!) That’s when things start to get amazing.

The same goes for frugality. I’ve turned frugality into a game. How many uses can I come up with, say, baking soda? How I do without X? How far can I stretch a dollar? Once you realize that you don’t need that much stuff, and how much time and mental energy you waste buying useless junk, you can focus on what really matters. What matters most to me? Time. I’m a time hog. The more time I have to myself to think, wander, work on my own projects, and do whatever it is that I please, the happier I am.

Be in tune with your values and goals 
Self-exploration is a huge part of having a good relationship with money, and it takes time. For instance, you’ll want to know what your spending triggers are, what areas you tend to slack off, what you value the most, and how to align your spending with what’s most important to you. This is a lifelong process, and you’ll never be 100 percent done. The deeper understanding you have about yourself, the better equipped you’ll be to tackle any money struggles and hit financial wins.

Yes, all this sounds like a lot of work, and at first it is. But once you get the hang of it, it starts to get fun (or at least less painful).

Creative folks: What have you done to kick butt at managing your money? 

Four Types of Freelancer Money Flows and How You Can Best Manage Your Money

When it comes to our money, freelancers share common issues: budgeting to pay for yearly and quarterly taxes, forking over money for our own medical insurance, and then there’s that good ole’ self-employment tax. And of course there’s the challenge of budgeting with variable income. The thing is that depending on our line of work and how we get paid, how our money fluctuates it can vary.

A recent article opened my eyes to the fact that while we commonly think of freelancers as writers and graphic designers, the top industries for freelancers actually include education and training, IT, and medical professions. Who would’ve thunk?

 

I’m really into creating systems to manage my money and spend a lot of time on how to set things up so I do the least amount of work and thinking later. I seriously nerd out about this stuff.

Here are four types of freelancer money flows and some tips on how you can manage your money accordingly:

Freelancer Money Flow Cat

Freelancer $$ Flow #1: Slow and Steady 

Types of Freelancing:
These are usually jobs where you have a steady roster of clients. You might have four or five clients at the same time, a few with whom you work with on retainer.

If you work in social media management, as a content writer, or consultant, you most likely fall within this camp.

Tips on Managing Your Money:
+ After you sock away money for taxes and your monthly expenses, think of allocating the rest of your money based on percentages. For example, whatever is leftover you can put 25 percent toward your vacation fund, 25 percent toward retirement, to pay off credit card debt—stuff like that. This is what I do, except I treat my retirement fund as a recurring monthly expense and sock away the same amount every month.

+ While it may not feel urgent at the time, think of ways you can perhaps expand your duties with existing clients or new clients should your bandwidth change.

Freelancer Money Flow Raccoon

Freelancer $$ Flow #2: Long and Intense

Types of Freelancing: Those who work on long-term projects, such as web designers, UX/UI designers, those who work in the film industry.  While you may work intensely on a project, you also (hopefully) make a killing.

Tips on Managing Your Money:
+ Have a robust “fuck-off fund.” You really cannot have enough socked away for your emergency fund, and it’s more apparent when you freelance.

+ If you need that money to tide you over during any dry spells, put your paychecks into a separate account and pay yourself a set fee every month.

+ Be on the lookout for your next gig well before your current one ends. We will get into create a CRM, or Customer Relationship Management database, at a later post.

Freelancer Money Flow Mouse

Freelancer $$ Flow #3: The 9/3

I call this the “teacher money flow,” as it’s something that people who work as contractors in the schools deal with. You work nine months, then get three months off.

Types of Freelancing:
They’re usually school psychologists or those who work in entertainment where the season is seven months, so they have five months off.

Tips on Managing Your Money
+ If you’re fortunate to make enough during the year, do the math to figure out how much you need to save so you have enough during the time off to tide you over. It’s a nice place to be if you have money left over at the end of the month to not have to work during your time off. You can also have a separate bank account and pay yourself a set amount every month.

+ If you’re not too busy while you’re working full-time, look into getting a side hustle. There are plenty of ways you can earn an extra buck these days, all it takes is a little bit of creativity. You can also pick up a side hustle that relates to your main gig. For instance, if you work in education, you can be a tutor in the summer. Or if you work as a motionographer for a TV series, you can pick up projects at production houses around town. That sort of thing.

+ I think saving for short-term and long-term goals can be challenging when your money flow is the 9/3 cycle. I think you just need to figure out how much you have comfortably saved in your baby emergency fund (usually 1-2 months of your savings) before you can start saving for a vacation, new computer, or for retirement on the regular.
freelancer money flow bear

 

Freelancer $$ Flow #4: The Parrot

Types of Freelancing: Contractor jobs in IT, education, or the medical field may fall into this category.

Tips on Managing Your Money
+ After socking away money to pay off your taxes, make sure you budget for your medical insurance, and enough money to cover your health premium.

+ Keep track of stuff you can deduct for taxes, such as mileage, train passes, equipment you might need to purchase for the job, books you buy, business lunches, continuing education courses.

+ Keep a robust emergency fund, in case you need to find a new job.

I call this one “the parrot” because it mimics working as a full-time employee but without the benefits. Note that whatever profession you work in and no matter how your money flows as a freelancer, you’ll need to budget for those who are “Parrots” need to save for.

What is your freelancer money flow? What are you some ways you can create a structure and process to stay on top of your money?

Try the Percentage Method for Budgeting

So I’ve been playing around with different systems for budgeting, and the one that works best for me is to create buckets for my recurring expenses. The money I have left over, I  kick over to the percentage method. Here’s how I do it:

Step 1: Create Buckets for Your Money
I am big into create different “buckets” for my main expenses. This is similar to the envelope system, but you do it digitally.

main expenses
This includes fixed, recurring expenses that don’t change from month to month, such as rent, utilities, cell phone, insurance.

variable: fun
Variable expenses are things that you normally spend money on but change slightly from month to month. I have two buckets for my variable spending. The first bucket is for socializing or stuff I do “outside,” such as eating out, entertainment, and fun.

variable: home
The second bucket is for stuff I use in the home, such as groceries, sundry household items, and shopping for stuff like clothes.

Why have two separate buckets for variable spending? Sounds complicated, right?  I think the way I spend when I am going out is vastly different than when it’s stuff for when I’m just chilling at home or for myself. I also find that I have more control and discipline when it comes to groceries, while I might splurge when it comes to going out with friends. Don’t we all?


Step 2: Save Based on Percentages
When it comes to my short-term and long-term goals, I save based on percentages. So after my main budget has been accounted for and I have a little bit socked away in my baby or buffer emergency fund (I try to keep about a month of living expenses in my baby emergency fund), I move on to percentages. Here are my main short-term and long-term goals at the moment:

Emergency Fund
Retirement
FUN fund (vacation, buying a computer)
Investing
New Car Fund 

I recently committed to saving a set amount each month for my retirement. Why? Because it’s important that I get to retire one day, and the only way I can ensure I accomplish this goal is to saving on the regular.

While my FUN fund can be broken down to specific goals, I personally find it easier to just create a main bucket and take money out when I need. For instance, I’m going on vacation next month and conveniently had enough socked away. This also shows how long it’s been since I’ve been on a real vacation, but that’s an entirely different story.

I probably can create another account for business-related spending, but I’m not there yet.

Would creating a budget based on buckets work for you? Why or why not? 

What I Vow to Do Differently Next Tax Season

Because last year I made the switch to being self-employed, my taxes this time around are going to be a little more complicated. As a result I’ve developed somewhat of what I call “Fear of Taxes Syndrome (FOTS).” I kind of am approaching this year’s taxes with a bit of a fly-by-my-seat approach—and it feels pretty messy. While I would much prefer to hide underneath a rock until tax season is done and over with on April 18th, that’s obviously not an option.

Although I’m working with an ace accountant who specializes in taxes and bookkeeping for freelancers (huzzah), I’m still feeling a little anxious, and hope I get through this year’s tax season. To stay on top of things for next year, here are a few things I vow to do differently tax-wise so I’m better prepared next time around:

1. I Will Know More About What I Can Write-Off
I would be doing you a great disservice if I told you I knew everything there is to know about tax deductions for the self-employed. Because I really don’t. I am still learning the ropes myself. The amazing Carrie Smith of Careful Cents write a pretty comprehensive post for Freelancers’ Union last year on tax deductions you should keep track of during the year. You can also check out the Freelancers Unions’ “Ultimate List of Freelancer Deductions.”

2. I Will Keep Better Track of My Tax Deductions
So it’s one thing to be fully aware of what you can write-off for taxes, and it’s another to actually keep track of them. A bare bones way I by using an Excel sheet. At first this method did the track, but lately I’ve found that I can only do so much. The thing is is that using Excel doesn’t link up to say, invoicing or tax return software. FreshBooks has a pretty cool feature where you can keep track of your expenses. You can also snap a photo of receipts on your phone so you can keep everything in one place. What’s also cool about FreshBooks is that you can try it for free for 30 days.

I really need to look into this for the year ahead as I’ve occasionally had an assignment where I bill for expenses and end up with a jumble of receipts to sift through.

3. I Will Stay on Top of Quarterly Taxes

FYI: Your estimated quarterly taxes are based on last year’s taxes. Here are the due dates for 2016:

+April 18, 2015 (for payment period January 1–March 31)
+June 15, 2015 (for payment period April 1–May 31)
+September 15, 2015 (for payment period June 1–August 31)
+January 17, 2015 (for payment period September–December 31)

Another thing to keep in mind that depending on the state you’re in, the percent you owe in each state isn’t an even 25 percent. For instance, in California it’s 30 percent for the 1st quarter, 40 percent for the 2nd quarter, nothing for the 3rd quarter, and 30 percent for the 4th quarter. Weird, I know.

4. I Will Keep My Business Stuff Separately
I have been slow boating it on this one. Once my taxes are officially filed and I can let out a celebratory cry, I will be looking into setting up a separate account for my business. I think it will be a lot easier to keep track of expenses and income that way. Plus if I use just one card for all my business expenses, it will be easier to see what expenses and purchases are tax-deductible.

I’m still not sure about expenses that can be deducted for business such as my cell phone bill and utilities. That’s a whole other story. I know that I’ll have to move some things around, such as direct deposits and linked accounts, but I’ll feel a lot better after the initial work has been taken care of. E-File also has a free version if you qualify for a 1040EZ form.

5. I Will Look Into Filing Taxes on My Own
I’m not sure if I’ll continue to use an accountant or try to make a go of my own on filing taxes. I’ve used TurboTax in the past and have absolutely zero problems with it. It has a free edition for federal taxes. Even though you start for free you usually do end up paying something to use its services.
TaxAct also has a free version if you have simple taxes and qualify for 1040EZ, so that’s another option to consider.

Who knows, I may fall in love with using an accountant and discover and never go back to doing my own taxes. But there’s a part of me that wants to see if I can pull off doing my own taxes.

By vowing to stay on top of my taxes this coming year, I’m hoping that things will be a lot smoother next time around.

FYI: I am no accountant or tax specialist. This is just info I found out on my own. So if you have specific questions be sure to ask a professional.

How to Live Comfortably in L.A. on $800 a Month

By Andrew Dove

Sounds crazy, huh?

Well I’m living it!

Hello everyone! My name is Andrew Dove, I’m a 20-something L.A. native running a massage business on the Westside. I work only 8-10 hours a week so that I have more time to volunteer, be involved in the community, and whatever else I feel like doing on any given day.

Disclaimer!
Even at minimum wage, which is $9 dollars in California,  you will be making much more than $800 a month after taxes, working a typical part-time and or full-time job. That being said, the purpose of this is to trim the fat from life so to speak, to produce less waste, and overall promote a healthier and more conscientious society. Even if you’re not down with that program at least this can teach you how to save up for that $1,000 thingy you’ve always wanted, you consumerist you.

That means you can set aside the money you earn building your retirement, investments, and maintaining a solid savings that can be used for travel and any emergencies that might come your way.

L.A. is a happening place, people are friendly, there is so much to do, so much to see, and all kinds of different locales to explore. The rising cost of living here might make some transplants feel a little nervous, but with a little knowledge we can make $800 work!

Here’s how:
To put things into perspective, my average budget looks like this:

+ Rent: $700 (including utilities)
+ Cellphone: $60
+ Food: $40
+ No insurance (I am still on my parents’ health plan)

Basics
Rent will the meat of your expenses. Try to aim for a $600 to $700 range, but $500 can be found with a little luck and patience. Note: if you have a roommate, things will be much more flexible, it’s much easier to find a 2-bedroom apartment for around $1,400 to $1,500, like I did in the Palms area. Other places to check out include:

+ Mid-Town
+ Koreatown
+ Inglewood
+ East L.A.

Food, toiletries, and the essentials
In earnest, if you must buy food, make friends with someone with a Costco card because buying in bulk is your friend! Stock up on oats, beans, and veggies in bulk. Cook oatmeal, soups, stews and curries. Freeze or refrigerate what you don’t eat and $10-$20 can last you the whole month.

But if you’re like me, you’ll find creative ways of getting around that. I help out at food banks quite often and they typically give for free their excess food that they have no room for. While this might mean you’ll be taking a ton of cheese and yogurt one day and strawberries and bread the next, the combination of things is usually more than enough for me to get by with.

Go-go gadget Metro!
Getting around town in L.A. is only getting easier, with new bike lanes, buses, train stops, and extensions being put into place every year! Metrolink and metro buses cost $1.75, but they can be transferred indefinitely within two hours of first use, which means you can go from Venice to downtown to Glendale to Long Beach and anywhere in between one way with just $1.75! Blue and green buses cost only $1 and are fairly clean and modern. But never forget about the best form of land transportation, the evolutionary process of millions of years, the bipedal locomotion that our ancestors relied on across the ages: Ah yes, the joy of walking.

The best things in life are free
L.A. is bursting at the seams of free things to do and see, many of which can include free food and goodies. I highly recommend joining just about every free club, newsletter, and email list. Here are some of my favorites:

+ Giant Robot. They’ve had pizza and sushi platters at opening nights on multiple occasions!
+ Natural History Museum
+ Cinefamily. Hint: Google “Cinefamily sneak peeks.”
+ Freethingstodoinla.com

Don’t budge on your budget!
The idea is to incorporating conscientious activity into your life.

Now this is the part that requires the most discipline. Budgeting is quite the difficult experience, but with some 2nd grade math and the patience of a mantis you can do it. With some time and practice, your throwaway consumerist shell will crumble, and from the remains will emerge a beautiful minimalist butterfly.

You can then fly free, free from the transparent web of imposed social constructs woven by greedy, profit-driven arachnids.

It is free to be free.
Andrew Dove HeadshotAbout Andrew Dove: Andrew is a crazy 20-something who owns a massage business in West L.A. In his copious amounts of free time he can be found volunteering at a local food bank or participating in various cosplay and video game—playing activities.

P.S. The opinions expressed in this piece are solely of the author’s.

How to Keep Your Financial Upkeep from Turning into a Time Suck

If you’re like me, you find the chore of financial upkeep a terrible nuisance. Staying on top of invoices, tracking time spent on a project, managing payments, and prepping for taxes can be a total time suck. As I’ve been taking on more freelance on top of my day job, the struggle with dedicating time solely just to write is real. It sometimes feels like a tiny part of me dies every time I have to track an invoice instead of working on an article. As I’m personally wading through the muck, here are some suggestions on how you can get a grip on your financial upkeep:

First things first:
Create a schedule and stick to it.
Designate a specific time just to tend to these tasks to prevent pile up. Below are some suggestions on how frequently you should tend to the following tasks along with some resources to get you started.

Invoicing
Frequency:
Once a week
Unless you need the money as soon as possible, scheduling time aside once a week to send invoices and follow up on outstanding payments should be sufficient.

Resources:
Right now I’m keeping track of my invoices in a spreadsheet in Google Docs, but as my freelance ramps up I’ll eventually check out GoDaddy Bookeeping . Toggl is a free time-tracking software which I’ve used in the past. For time-tracking and invoicing tools, there’s FreshBooks, which is extremely popular and you can sign up for a 30-day free trial.

Tax Stuff
Frequency:
Once a month.
Not only should you ideally keep track of anything that you can write off if you’re self-employed, but include donations made to charity.

Resources:
When it comes to tax deductions, my two favorite resources for the self-employed are the Freelancer Union’s “Ultimate Tax Guide for the Self-Employed” and the Tax Toolkit for Self-Employed Biz Owners by Carrie Smith of Careful Cents. Both are free and are comprehensive guides to helping you get the most out of tax deductions.

As being a freelancer can be more expensive (i.e., medical insurance, self-employment tax) you have to be super ninja about mastering the art of the tax deduction. If you want to get deep in the weeds, the IRS also has made available a bunch of forms and resources.

Updating Your Portfolio

Frequency: Varies.
If you work on long projects you might only need to update your portfolio after the project has been completed. If you don’t have your own website, you can do something simple like post your work on  Tumblr. For someone like me, who does freelance work as a content writer, blogger, and proofreader, I update every week or so.

Resources:
Writers: I love Contently and Skyword. It’s super easy to add articles.
Designers: Behance and Coroflot
Motiongraphers + Film Peeps: Vimeo.

By sticking to a simple schedule, you won’t have to worry about your financial chores turning into a monster. And I’m sure as you wade through the muck you’ll get into your own rhythm and find some shortcuts of your own. Remember: You’ve got this!

Got a Money Minute? Then Vote for Me and My Friends

Hey guys! So, I’m participating in GOBankingRates’ Money Minute video contest. Me and fellow financial bloggers share our favorite money-saving tips. I have two videos, both which were created with top-of-the-line professional equipment and super high production values, as you can see below.

There are some clever, unheard-of before tips shared in this year’s entries, and I learned a lot myself.You can vote once a day until the end of the month. Enjoy!

And here’s my girl Crystal of The Sophisticated Spender, sharing  great creative ways to budget:

And my pal Lee of Bald Finance, who explains a way to pay down your credit card debt quicker:

 

Making the Broken Rules of Personal Finance Work for You

As a self-described money maniac, I feverishly scour money blogs on a daily basis, there’s an endless number of personal finance books in my reading queue, and I love learning about all the new budgeting apps in the works.  Yet there’s a big part of me that is convinced that the rules of personal finance are broken.

So you ask: Why are the rules of personal finance broken, Jackie Cheapster?

And I answer: Because financial wellness is a lot like getting back into physical shape: The rules are easy, but the actual doing is super tough. Being physically fit entails two things: Exercising more and eating healthier. Easy enough, right?

But most of us do not enter a gym with the ideal BMI index and eating negative-calorie salads. We’re overweight, spend most of our time disintegrating in front of a couch, and eat crap food.

The fundamental rules of financial wellness are simple: Spend less than you earn, and find ways to make your money grow. But with all the formulas and rules out there on how to save, it seems as if they’re written for people with perfect financial situations where they make a decent steady income and can afford to put money toward all their goals. Riiiight.

The reality is that if you’re a freelancer you don’t always have a steady flow of income, and you don’t have perfect money-saving habits. We’re human and thus flawed. So, let’s get real, shall we? Let’s look at some of the most popular rules of personal finance and how they can be tweaked to make them work for you:


The 50/30/20 Rule.
What they tell you to do: 50% of your take-home pay goes toward your fixed bills (i.e., rent, utilities, subscriptions), 30% of it goes toward flexible spending such as food, gas, entertainment, hobbies, and 20% of it goes toward your savings and paying down debt.

Instead: This would be totally realistic to do if your rent was under 30% of your income, but as the U.S. as a whole is dealing with unaffordable housing, some of us are paying 50% and upwards of our income. While our fixed bills may not be in total control, really try to keep the 30% (i.e., your flexible spending) as low as possible. That way you’ll have more to play around with on your savings.


Rule: Have 3-6 months in your emergency savings account.
What they tell you to do:
You should ideally have 3-6 months worth of your basic expenses socked away. If you’re a freelancer, it would be great to have 6-12 months. If you’re at the top of your game, you might even want to have a separate account for your vacation/sick days.

Instead: Start with what I like to call a Baby Emergency Fund, meaning you have 1-2 months of emergency money socked away. As you’re starting out, have this fairly accessible.  You can tap into it whenever you’re having a tough month. Do your best to keep it topped off, but don’t be too hard on yourself if you can’t. If you have a great month or two, consider creating a Mama Emergency Fund, where you stow away that delicious 3-6 months of emergency savings.


Rule: Diligently save $1k every month in your retirement fund from the time you’re 25.

What they tell you do to: Because 401(k) plans started in the early ’80s and people are now starting to cash out on them, there has been a lot of hubbub recently on how to save a cool million by the time you’re 65. Very cool, right? The problem is that most of us did not start saving for retirement in our 20s, and we’ll be forever playing catch up.

Instead:
Although I personally nag my friends to sock at least a little away, sometimes you need the money now to survive. Instead, save what you can, when you can.

Look at different options. If you are self-employed or don’t have access to a retirement plan through your current employer, there’s SEP (self-employed pension) plan, Traditional or Roth IRAs, or the relatively new U.S. Department of Treasury-backed myRA. If you’re doing temp work through a staffing agency, they might have a 401(k) that you can put money into. One thing you’ll want to check is whether or not certain plans have a window where you can change your allocation. For instance, at my past job I could only change my allocation amount 4 times a year. So if you don’t want to be locked in, check on this beforehand.

While the rules of personal finance have good intentions, there’s no one-size-fits-all. Do your best and what you can with what you have, and don’t feel bad if you can’t stay on top of your goals all the time.

Do you do think the rules of personal finance aren’t realistic? If so, what are you doing differently?

Stop Fighting With Your Money, Foo!

The following blog post is part of The Road to Financial Wellness Blog Tour. Over a period of 30 days, the Phroogal team will go to 30 locations to raise awareness about financial empowerment. Today they will be in Los Angeles! Our goal is to help people learn about money by starting the conversation. We understand that local conversations can help bring about national awareness.

If you’re like most people, you may not have the best relationship with your money. It might be one of those love-hate type things. Or maybe you have a “shove things underneath the rug about until shit hits the fan” kind of mentality. I may not have pulled off an amazing feat as some of those money stars out there (whom I highly admire) such as paying off an huge amount of debt or be on the path to retiring by 35, but one thing I have managed to get right now that I’m in my early 30s is to develop a healthy relationship with money. It does require a little bit of time and work, though. Here are a few ways to stop fighting with your money and start living the life you want:

Find where you stand money-wise. 
Figure out how much you need to bring in each month to make ends meet and what your money pits are. Financial wellness is a combination of being honest about your money issues, developing good habits, and being aware of the current relationship you have with money. For some money is a marker of success or self-worth, but the truth is that money is not a need. It is merely a tool to help fulfill needs. So really take a hard look at your expenses, money woes, and habits with your finances.

Have a budget.
You really need to track your expenses to see where your money is going and what problem areas you have. This will help you treat your finances similar to running your own business, meaning you have to keep an eye on the bottom line (your savings goals), and make sure the inflow of cash is greater than the outflow (living within your means). The good news is that there are plenty of free tools out there to help you track your expenses. You can start with Mint, Level Money, or LearnVest budgeting apps.

Know your values.
I was raised by a single mother who went to nursing school while working full-time at a nail shop. When I was a child every Sunday we had a tradition where we’d go to church followed by fun and games at the local Golf ‘n Stuff. It was my favorite pastime, and something I looked forward to every week. When my mom completed her studies and got her nursing degree, she began working crazy hours. As a result, it made it harder and harder to make it to Golf ‘n Stuff every Sunday. As a child I equated having more money with having less time. I’ve forever since valued my free time.  I love having time to write, dawdle, and do whatever I please. I would much rather have more free time than accept a promotion that required more stress and hours. It’s easier to make decisions if you know what’s important to you.

Develop a Cheapster Style.
Developing a style figuring how what your money superpowers are as well as your money kryptonite, and creating a method of spending and saving that is aligned with your natural inclinations. This spending a fair amount of time figuring out what works best for you, whether it’s tracking everything with an app, playing The Great Frugality Game (where you turn saving money into a challenge), or automating your savings. In my years of experimenting with budgeting apps and excel sheets to track expenses, I’ve found that what works for me is allocating X amounts on different debit cards and automating my savings.

What’s your Cheapster Style? What are the things getting in the way of designing your own life?