The title says it all.
Since I started my Secret Office Day Job last June I’ve been saving a lot—the exact amount ranges between 10 and 40% of each month’s income (well, 40% was only once…) depending on my expenses, how many side gigs I have, or how much overtime I’ve worked.
(Luckily I keep a budget each month to track how much I make and where it’s going—and if you click on no other link in this post, check out my piece on the basics of budgeting, because it’s that important!)
My savings routine works like this: at the beginning of every month I track my previous month’s income, pay all my bills, and see how much I have left. I keep $2,000 bucks in my checking account to cover unforeseen expenses (car trouble, computer explodes, bills I’ve forgotten about, etc.) and any money left on top of that I divide in half, with one half going into my savings account and the other half going toward my last and very final student loan (meaning that I’ll pay less in interest the following month!).
The math on this is easier than it seems: say that at the beginning of the month I have $2,700 in my checking account. Keeping $2,000 leaves me with $700 left, so in that case I’d put $350 into savings and $350 extra toward my student loan.
I use this system because it’s simple, works for me, and helps me get closer to my two immediate financial goals: 1)Save a decent amount of money for an emergency/life change, and 2)Pay off the last of my debt, both of which are really important to me.
I don’t recommend this method for everyone: some of you reading might not have any savings at all and need to build some up, or you might be drowning in debt that you need to pay off ASAP while you put cash savings on the backburner. Or maybe you’re beginning to think about for-serious retirement savings like IRAs and stuff—the point, as always, is to look at your personal situation, consider your financial goals, then decide something that works for you and stick to it!
I Skimmed That Last Part Because I Wanted to Know About That 6 Months of Savings—What Are You Going to Do With It?????
I’ve been saving for a long time because I don’t want to feel restricted by HAVING to work a Day Job that doesn’t mean anything to me just to pay my bills, since having to work a Day Job limits my freedom to focus on my creative work, pursue other work I’m interested in, or even move to a new place because I wouldn’t have enough money to live on while I looked for work there. And that freedom is the most important thing for me in terms of what it means to have money.
That’s also why I try to live as frugally as I can and avoid unnecessary expenses (especially reoccurring ones like car payments and monthly subscriptions that aren’t Spotify), since I don’t want to put myself in a position where I HAVE to keep working a certain job to cover all those expenses. For me, being able to lighten my Day Job workload and focus on my novel is my main goal, like I talked about two weeks ago in my Novel Update.
The six months isn’t a pauper’s budget either: my basic monthly budget, including rent, utilities, food, gas, health insurance, and budgeting for other basic needs and frivolities comes out to about $1,600 a month—that’s enough for me to pay all my bills and still have enough left over to buy some books, meet my friends for pizza, and go to the occasional concert, things I enjoy doing and that add meaning to my life—all for six months. (Feel free to do the math and see exactly how much I’ve got saved, if you care that much…)
And knowing I’ll be fine for those six months barring some unforeseen medical or car disaster feels really, really good.
You Still Didn’t Answer My Question—What’s Your Big Plan???
That’s something I haven’t quite ironed out—I’ve got a rough skeleton of a plan and a lot of it’s banking on the result of some Secret Things I Applied For back in the fall. I’m not ready to talk about those things here yet, but they’re definitely epic in that game-changing kind of way (!!!!!).
My real concern is that I don’t want to just quit my Office Day Job now to finish my novel because as incredibly awesome as that would be, I wouldn’t have anything close to a mid- to long-term plan about what to do after that, so when my savings ran out I’d be in the same financial boat I was in last spring, except that I’d be another year older and my car would have more miles on it.
Not knowing my next step also tends to cause me a lot of stress and worry—like most people out there, I feel WAY more secure when my life, finances, and goals are relatively stable, which helps me focus on getting my shit done. In the past I’ve lost a lot of time to depression and anxiety that left me lying in bed under the blankets doing absolutely nothing but worry about how things were going to turn out—and I’d like to avoid having that ever happen again.
So the real question is, how can I set up my working life so that I feel stable and secure, but also don’t have to devote all my time to a Day Job that leaves me with less time to make the creative progress that I want to make?
Six months is a long time to go between jobs, and that money could last even longer if I’ve got a steady stream of editing work or other part-time gigs to supplement my income. Both of those prospects feel very attractive because they buy a lot of creative work time, so that if/when I go back to full-time Day Job work I wouldn’t be so crazy far behind with everything and could plan my next project, so that focusing on finances for a while and then focusing on creative work becomes a kind of back-and-forth cycle that allows me to stay clearheaded about both.
Ultimately, though, my goal is clear: to replace Day Job work (i.e., work that I don’t really care about) with meaningful, creative-based work.
And while having six months of savings isn’t a golden ticket that’ll make that happen, it’s an excellent tool to have in your toolbelt when you’re planning a big change ;-)
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