Back on the Budget Again

Okay okay okay I know that headline is technically misleading because I was never off my budget, but it’s a lot simpler than writing “remember how I told you I had extra money to spend in my personal budget? WELL I EITHER SPENT THOSE DOLLARS OR GAVE THEM JOBS.”

My goal, for 2019 (and, assumedly, beyond) is to keep all of my personal expenses under $30,000 per year. That’s roughly $2,500 per month, though it doesn’t fall out quite that neatly thanks to vacation and holiday spending.

One of the reasons I had a little extra cash in my budget was because I initially tried to shove both my business and my personal expenses under the $30,000 cap. Then my business income exceeded expectations, which meant I needed to reconfigure my financial strategy—which became “personal expenses at $30K per year, tax-deductible business expenses as anything I want that will also help me grow my business.”

That’s how I ended up a little under budget two months ago; I literally gave myself more money to put towards personal expenses than I had initially planned. Some of the extra dollars were given discrete jobs, and the rest went into “discretionary,” a YNAB spending category that had originally been two separate categories: the YNAB-recommended “stuff I forgot to budget for” and the Nicole-recommended “stuff I didn’t know I wanted.”

Then I spent that extra discretionary money—about $600—almost immediately, on plants and arts organizations and a dance pad.

When I say that my FI calculator predicts I’ll hit financial independence in (*rechecks calculator*) six years and six months, that’s estimating an annual spend of $30,000. If you add in my business expenses, the FI calculator jumps to nine years and two months—which still puts me at FI before 50.

That’s assuming my income and expenses remain constant (which probably won’t happen, but I’ll cross that bridge when I come to it) and I don’t run into any expensive surprises.

On that note: I’m going to be meeting with my CPA next month to discuss tax optimization, including how to max out my SEP IRA for 2019, whether I should open a Solo 401(k) in addition to the SEP IRA, whether I should invest in a business asset (like a laptop or desktop computer I use only for freelance writing), and so on. Will I end up owing more in taxes than my CPA and I anticipated at the beginning of the year? Probably. How much more? That’s still to be determined.

So until we know more about… um… all of that, I’m back on the budget.

Which I technically always was. This is just my roundabout way of saying that I’m not going to indulge in a bunch of non-essential purchases right now. ❤️

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