Eventual Millionaire

Frugal Entertaining Without Breaking Your Budget

Posted by Jaime on August 27th, 2010

: Image by clevercupcakes via Flickr

Practicing sound financial habits does not have to be boring. It would be horrible for anyone to live a Scrooge-like existence everyday in order to save a few dollars here and there. Humans are gregarious creatures and need social interaction.

This, however, does not mean that you have to break your budget when you decide to throw a small get-together. There are certain ways in which you can be frugal when it comes to entertaining, and the best part is that your guests won’t even realize it.

Limit Your Guest List

This might be a very difficult thing to do, but you can’t expect to keep a budget and invite the whole world in the process. You need to decide who you really want at the party and invite only those people. By making a guest list you also become aware of how much of everything you will require.

Calculate Your Budget and Write a Shopping List

Do not go to the store with random estimations of what you will need. You should calculate your budget before you starting shopping. Figure out how much you can spend and then decide what you need too buy. Write a comprehensive shopping list to make sure you keep within your spending limit.

Use a Certain Amount of Cash and No More

When you go shopping you will see a few items which you did not think of when compiling the shopping list. For this reason you should take the pre-determined budget with you in cash. This will limit the number of extras that you end up purchasing. You should always be aware of your budget and never exceed it.

Ask Guests to Contribute

This is quickly becoming a norm when it comes to social gatherings. By asking guests to bring their own drinks the party budget will be decreased dramatically. There is no need for the host to indulge the drink preferences of every guest.

Themed Parties

Themed parties are one of the most frugal and fun ways to entertain guests, because everyone can contribute. If you create a theme you can then ask every guest to bring one item of eats or drinks which contributes to the overall theme. Guests will be happy to get involved and your entertainment budget will be far lower. This works very well when it comes to cocktail parties, because every guest can then bring a drink and participate in creating random concoctions.

Serve Moderate Portions

You should not serve too much food. If guests are still hungry they will ask for more. You do not need to overload every plate that you serve. Serving small portions does not automatically imply that you are a miser. Guests usually gather to socialize, rather than eat large quantities of food.

Prepare Pasta

Almost everyone enjoys pasta and it isn’t too expensive to make. The internet is filled with fantastic recipes so you don’t have to be Italian to make a good a dish. If you want to lower the budget even further, then you can use vegetables instead of meat.

Prepare a Really Good Dessert

If you leave your guests with a good final impression they will remember the entire evening fondly. One of the best tricks for effective frugal entertainment is to provide an amazing dessert. Desserts are cheap to prepare and it is easy to make them look good, so you should always put a bit of extra effort into this part of the preparation.

With a little forethought, you can put together an impressive party without breaking the bank!

About the Author:

Mrs. Not Made of Money likes to save money every way that she can and stretching the family budget has become a favorite hobby. She writes the personal finance blog “Not Made of Money” along with her husband where they share their money saving tips for living a debt free life.

Gather Your Data: Debt and Net Worth Worksheets

Posted by Jaime on August 16th, 2010

Image via Wikipedia

So the last post in this series involved how to be honest. Being honest means facing up to the facts and accepting them for what they are. Here is your chance!

This is the part that everyone hates. Who wants to know how much debt they are in? Who wants to know that they have a negative net worth?

I know I didn’t. The first time I added ours up was when I was fired up and ready to pay it off. But after I did the math, I felt like someone had poured water on me. I knew I was in a lot of debt but I had no idea it was $70,000. That is how much my first house cost!

I had all sorts of negative thoughts in my head:

I can’t do it, it’s too much.

What was I thinking getting into all of this?

It’s never going to happen.

I am going to be at a job I hate forever.

Nice right? None of that helps you reach your goal! Luckily for me I had a huge reason why. I wanted to be home with my son. So even if I didn’t do it, I had to try.

Being on the other side helps me to realize that the bigger the amount of debt you have, the better the story you are able to tell once it’s paid off.

So download the worksheets and take some time today to fill them out. If you don’t make time to do it today you will download them and they will sit on your computer, never to be looked at again. So make sure you are going to use them before you download them. I know most of us don’t need more clutter on our computers.

Download the worksheets:

Your Debts Worksheet DOC

Your Debts Worksheet PDF

Net Worth Worksheet XLS

Net Worth Worksheet PDF

Have you done this before? If you have, do you keep track? If not, what do you think?

I Must Do the Thing I Think I Cannot Do

Posted by Jaime on August 10th, 2010

Image via Wikipedia

In life, we are made up of our actions. The actions you choose make up the experiences you have. When you think back over your life, the ideas you have, the thoughts you have had, are all based on the actions you have taken (or not taken) during your life. So if we keep just taking action we can live an amazing life, right?

“You must do the thing you think you cannot do.” -Eleanor Roosevelt

The important actions aren’t easy. They are hard because of our fears. No one is without them. Do we choose our fears? How is it that we come to have these specific ones? In Eleanor Roosevelt’s quote she specifically says, the things YOU THINK you cannot do.

These things are based on your fears and beliefs about yourself. You may think someone else can do it, but not you. Why?

Facing those fears, and challenging those beliefs, no matter how scary, is what makes an amazing life. I believe that conquering those fears and changing those beliefs are why we are here. If something seems scary, too hard, or impossible, there is a reason why you think that. The reason is that you were meant to overcome it.

How powerful would you feel, if you conquered something that seemed impossible? What would your life be like if you knew that whatever task you set out to do could be completed, by you?

When I work with clients I see it often. When I suggest something that seems scary, I can see the resistance in their face, and I can hear it in their voice. They may act like the suggestion is not worth doing, or come up with excuses as to why it wouldn’t work or they couldn’t do it.

They are capable but not willing. We need to push past the unwillingness. But you know what is funny?

It’s so easy for me to say that. When I am on the other side, when I don’t have to do the work, it’s easy. Saying, “You must do the one thing you think you cannot do” is easy.

On the other hand when I have to face my fears, I do the same thing. I resist. Saying, “I must do the thing I think I cannot do” is different. It feels different to say aloud. It makes me responsible.

But you know what helps? Have someone else that can look at your situation and think it’s easy. Because sometimes it is easy. Have someone tell you that you are capable, because you are. Have someone tell you that even if you fail, that’s ok. Because eventually you will believe it too.

Today think of one of those fears. Are you capable? How can you be willing?

July Income and Expenses Report

Posted by Jaime on August 4th, 2010

It’s already August, so it’s time for another income and expenses report. I love going back through the month to see how we did. At the end I’ll explain a little more about my lax method of budgeting and income and expenses.

INCOME

This is usually our best month of the year, and it looks like it is again this year. I have to give my husband credit for all the work he does. You have to be good in business and performing to be a professional juggler.

Our income this month was $11,933.28. Since we are self employed most of that money was made in the month of June, but we weren’t paid until July.

EXPENSES

Here are our expenses:

First Mortgage	$1,712.00	Kids	$50.00
Taxes	$500.00	Matt	$50.00
Electricity	$112.00	Jaime	$50.00

Gas/Heat		Childcare	$880.00
Phone/Internet	$30.00
		Attic Project	$852.00
Cell	$88.00	Laptop	$703.00
Car Insurance	$76.00	Printer ink	$46.02
Grocery	$500.00	Hosting	$77.93
Restaurants	$100.00

Health Insurance	$485.00
Gas and Oil	$350.00	Total	$6,661.95

My lax method of budgeting looks like this. At the beginning of each month we estimate what we’ll spend. It’s usually the same, so we just brainstorm if there will be any extra expenses. There is always something, like birthday parties, or needing ink for the printer. Either I look it up to get a general cost estimate, or I just know from experience.

The Fridge Sheet

Then I print out a Fridge Sheet. I call it that because I am old school and have it on my fridge! It’s pretty much just an excel doc with columns for each category. I write in what the budget is at the top of the column. So for Gas I write $350 and we just minus each receipt as we take receipts from our wallet. Sometimes it’s every few days, sometimes it doesn’t happen for two weeks, but all of the information gets on there before the end of the month.

For Groceries, I don’t write $500 at the top. I write $125 per week. I learned my lesson with that. I would tend to take a little more each week sometimes spending $130, or $140, so the last week we would have like $60! That wasn’t fun. So now try to hit $125 each time. Sometimes I’m off, but I make it up for it the next week.

At the end of the month all I do is make sure the categories under. I don’t care exactly how much under they are. I don’t move money out of the account if I saved $40 that month. I just let it pad the checking account. I do this because we go over occasionally. We don’t go over with our personal funds, or birthday’s etc, but sometimes we need to get more gas than we expected. I’m not as strict now that I am getting out of debt. If it goes over, we still have a pad from the months we were under. But I make sure to adjust for the next month.

That is why the expenses above are all round numbers. I could go back to the Fridge Sheet and tally everything for each category and record it. The info is there, and we save it in case I need to look back at it next year. But in general I don’t want my finances to take up a ton of time.

We need to be in control of our finances, but we don’t want them to control us either.

How lax is your budgeting? Or how strict is it?

You Are Not the Numbers

Posted by Jaime on August 2nd, 2010

: Image by Stewf via Flickr

Whether you like them or not, the numbers show reality. They exemplify what is important to you. You might say being home with your children is the most important thing to you, but unless you are spending money consciously then the numbers don’t lie.

Why do people avoid numbers like the plague? Because it makes them feel crappy! Realizing that you aren’t doing well financially hurts. It makes you feel stupid, or like you can’t do anything right. Even if you are doing ok, shouldn’t you be doing better?

First things first. You are not the numbers. Your financial statements don’t determine your value. You are a smart person. You care about your family. You are a mom trying to be everything to everyone.

The numbers show the truth. They may mean your choices weren’t smart. There are two reasons why we don’t make smart choices with money.

#1 Misinformation, or you didn’t have enough knowledge

#2 You let emotions make your decision.

We all make bad decisions in our lives. No one is perfect. So don’t worry if your financial life isn’t healthy right now. That’s why you are here.

The only thing you can do about your past mistakes are to learn from them. Being willing to accept your mistakes is an important part of accepting yourself.

Nathaniel Brayden from the Six Pillars of Self Esteem says:

“We must remind ourselves that “accepting” does not necessarily mean liking, enjoying, or conditioning. I can accept what is and determine to evolve from there.”

Being able to accept reality is the precursor to growth.

Do not ignore the reasons for your mistakes and say, “Everyone makes mistakes, I won’t worry about it.” Those words are a recipe for disaster. You need to understand why you made them so you can make better future decisions.

This is how I made made the changes necessary to become debt free. I was able to say, “Wow I made some bad decisions!”

I thought they were right at the time with the information I had. But now looking back, they weren’t going to help me life the life I want. So I swallowed some pride, and decided to move forward.

Now when I look back at those same mistakes, I smile. I still know they weren’t smart, but I know I crushed them. Crushing your mistakes is a great feeling! I’m glad I made them, just so I could overcome them.

How do you feel when you look at the numbers?

Work and Peace

Posted by Jaime on July 29th, 2010

Image via Wikipedia

There is something to be said about having hectic schedules at work, they leave no time for peace! Most of us cannot find the time to relax, or even find time to be alone. Here are a few key ideas for bringing more peaceful moments into your life and work.

Breath with awareness. Conventional wisdom says to take a deep breath when you are stressed. I would suggest not only take a deep breath but breath with awareness.

Bring a deep breath in and concentrate on how it makes your body feel. Hold it for a few seconds, let it out, and again notice how your body feels. Bring awareness to the parts that feel especially good after the breath.

Be an outsider. Pretend you are an outsider looking in at the situation. Imagine yourself looking down on the situation years later. Most of the stress comes from being in the situation, but if you can remove yourself and imagine yourself outside of the situation it can give you a moment of peace.

If you are dealing with constant work, and overwhelm, think of yourself 20 years from now looking back on the situation. What do you think? Do you want to laugh at how important you thought it was at the time? What would that older you tell you?

Concentrate on one of your senses. Choose one of the 5 senses, and really pay attention to it. If you are near freshly cut grass, pull yourself away from the stress and concentrate on how it smells. If you are stuck in a traffic jam, really concentrate on how a cloud looks, or how the steering wheel feels. Concentrating on one of the five senses grounds you in reality. It can bring about an almost meditative state, which can bring that peaceful moment you need.

A peaceful moment may only be a few seconds, but if we keep seeking these moments throughout the day they will get longer and more frequent.

What do you do to find peace during hectic times? Any tips?

Lessons From the Output

Posted by Jaime on July 27th, 2010

Image via Wikipedia

I didn’t realize how fast paced life is until I stepped back from it.

I spent two days at our camp by the river, by myself. I wanted to step out of reality for awhile and have a few silent days away from the constant noise of life.

The main reason why I scheduled this trip was because my goal this year is to become more spiritual and meditate more. I’m still learning, and I wanted to give myself a chance for reflection and meditation. It’s hard to reflect when you have two small children running around.

(Usually my meditation consists of 10 minutes of trying to clear my mind while I hear the kids running around with my husband downstairs!)

I went into the trip looking for more spirituality (whatever that means!) and I don’t think I found it.

Instead I found the art of living. I know I write a lot about how there is more to life than money, but there is even more to life than just enjoying it. Giving more of yourself to help others enjoy their lives too.

I’m realizing slowly that for me life is about creation. It’s about defining who you are by output, and in that process changing others.

The past few days I was able to do whatever I wanted. I wrote my intentions at the beginning of the trip. It said, “I have no expectations as to what should happen.” I’m writing a book and I wanted to write a lot! But I didn’t want to write if I had to write.

I ended up running for many miles in the woods, I kayaked, I drew, I painted, I wrote (a lot), I read, I listened to music, I meditated. I just sat.

The meditating and the running and the exercised helped me output. I wrote better, I painted better.

I think I have become so used to input that I never allow myself to create! Normally I read, I learn, I internalize, I think.

This blog has been my first attempt at output. The book is another. And guess what?

I LOVE OUTPUT.

Those days at camp, I felt like a young version of myself. One that didn’t need to worry about getting dinner on the table. I felt like I could live without judgment from others since I was alone, but also from myself.

Nothing needed to be perfect. It was all about the process.

As adults, we need to do that more. We need to know that it exists. We will become better human beings for it.

Output and Business

It makes perfect sense. In order to create value that others will pay for you need output.

We can get so caught up in marketing and selling, learning the newest technique or dealing with vendors. We forget the value of creativity and output for the business.

We have so many goals to achieve and we are always looking forward. Sometimes we look back at our mistakes and failures to learn from them. But how often do we look here and now?

How often do we relish in where we are, and how far we still get to go? Not how far we HAVE to go. How far we GET to go. Because once you beat the game it’s not fun anymore.

Take a day away from the office. Think about where you are now and how amazing it is, and start to output. I promise you it will be worth it.

Lessons from the Ouput

I’ve learned a few things along the way.

Things to do to increase your output:

Create a growing habit. Output can take awhile to get used to. I never labeled myself as a writer. English was the only class I got a C in and my horrible assignments forever scarred me.

So I started with a journal that just listed my accomplishments. Then I started writing a little more. It started to become a habit. Then it started to become second nature, so when I started putting it out there it didn’t scare the crap out of me. Now I write every day. (I am better at visual arts, but I don’t think a painting of this post would have gotten the message across as well )

Don’t Judge. When you output, judge nothing! You can always cut words later, or you can start over on a painting. You can change your plans. Judgment stifles creativity!

I heard a story that Walt Disney wouldn’t allow any criticism in the initial creative process. Even at EepyBird when we start to generate ideas, nothing is allowed to be judged. There are no critics in the room. You must let a few crappy ideas get through to allow the space for the amazing ones.

One idea often sparks another, so if you judge and never allow yourself to get into the flow of ideas you may never hit that bonfire. You never know what your ideas might spawn into.

Stop the Input. Just like Tim Ferriss says in the Four Hour Work Week, go on a low information diet. While information can spark ideas that eventually lead to output, it’s hard to get ideas out when so much is coming in.

Can you imagine a pipe flowing with water into your brain? How easily do you think you could push out an idea? Let yourself turn the incoming water off, so you can output!

What do you think about output? Would taking a step back work for you?

Important Bond Decisions for Start-up Entrepreneurs

Posted by Jaime on July 22nd, 2010

: Image by Damon Duncan via Flickr

This is a guest post by Matt Bruns. Beforehand I didn’t know much about surety bonds. Thanks for educating me too Matt!

If you’re starting your own business, you probably already have a to do list that’s several miles long. From getting your business licenses and permits to establishing your company’s structure, the process can often be difficult and stressful at best. However, beginning your own company can have huge rewards, not the least of which are financial.

Successful business owners can expect to reap substantial gains from their companies and between the business’s equity and earnings, owning your own business can often be the surest path to financial success and prosperity.

Ensuring that your company has all the applicable surety bonds in place before you begin any type of business-related activity is a critical step to being rewarded with top earnings. The process is a fairly simple one. Surety bonds are required by law for a variety of businesses and are in place as an assurance that you will abide by federal, state, and local laws and regulations concerning your industry.

What’s more, bonding is a reasonably easy and inexpensive process, with most bonds costing just a few hundred dollars. But keep in mind each state sets their own surety bond rules. For example, a surety bond in Illinois that is required may not be required in another state, or may have a different bond amount. If you’re unsure about the type and amount of bond that you need to purchase, contact your state’s small business administration or bonding agent of choice and inquire about the bonding requirements for your industry.
One crucial step to purchasing a surety bond is finding a company from whom to buy your bond. Surety bond companies are numerous, particularly online, and it’s important to find someone who is accustomed to selling bonds to companies in your industry, since the challenges associated with running a business are often unique from industry to industry. Your new bonding agent should be knowledgeable about the challenges you’re facing and should also be able to offer a fresh perspective as well as a support system for you in the early days of your company. Look for someone who makes you feel comfortable and seems to take a genuine interest in your company and your success. The more allies you have on your side, after all, the more likely your business will thrive.
It’s also imperative that your new bonding company have a stellar reputation. After all, you’re trusting them with your finances and, essentially, your reputation should there be a claim on your bond. The bond company should be secure, established, and trustworthy above all else. It’s a good idea to ask other companies in your industry about their chosen bonding company, and to also check with the Better Business Bureau to make sure whichever company you choose has a clean history.

Keep in mind that you’ll be providing detailed financial information to the bonding company so that it can make a determination of your credit standing and financial strength. Surety bond prices rely heavily on the bonded company’s credit score and financial statements, so it’s critical that you provide accurate and up to date information. Since surety bonds are a form of credit (not insurance), the bonding company needs to make sure that you’ll be able to cover the full value of the bond should it come due because of a claim. If your business has poor or little credit history, you can expect to pay more for your bond and may have to use a bonding company who specializes in subpar credit bonds, which can be both a hassle and an expensive proposition. Therefore, it’s important that you clean up your credit as much as possible before seeking out a surety bond.
After you’ve purchased a bond, make sure to advertise the fact that you do maintain legally-required bonds to your customers. As they become more and more savvy, consumers are looking for companies who are licensed and bonded and often, this fact will win you more business over your counterparts who may not advertise their bonding status.
Keep in mind that surety bonds are not only a legally-required part of many industries but can also be a good selling and conversational point for your company. Maintaining a bond is an inexpensive way to ensure that your business is complying with state, federal, and local laws and will therefore protect the time and money that you’ve invested to make your business functional, reliable, and above all, profitable.

This is a guest post from Matt Bruns of SuretyBonds.com, as part of their Surety Bond Education Program.

How I Handle an Irregular Income

Posted by Jaime on July 20th, 2010

: Image by sunciti_sundaram, VARIETY IN GALLERIES via Flickr

This month will be a little different. I won’t actually be sharing our income and expenses for June. As noted in my post Stolen: $1084, my laptop was stolen. It had Quickbooks and all of my data. While I do have a lot of it backed up, I didn’t have June backed up.

Instead I will go over the process I use to deal with our irregular income. It is one of the top concerns of freelancers, and it was one of my biggest fears when I quit my job.

My check used to come in every two weeks. I could plan exactly what I was going to do with it months in advance. It made me feel secure and safe. Taking the leap from my job felt like I was jumping out of a plane without a parachute!

Fast forward almost four years. Our income is very sporadic. But I have become so accustom to this lifestyle that it is no longer an issue. Even me, a perfectionist that needs to plan months in advance, can get used to it!

These are the steps I use that help me relax.

Our Emergency Fund

Our emergency fund gives me so much peace of mind. I’ve heard a lot of people say that we shouldn’t have so much in savings, we should invest it. My peace of mind is better than any return I could get!

We have 5 months worth of expenses in our emergency fund, and about 2 months worth of expenses in our Heath Savings Account (HSA). If we have no income we could live for at least 7 months.

Planning the Future

I still plan. I actually spend more time planning than I used to. This has been the key to my success. I have to plan because our income tends to be seasonal. We make more money in the summer than we do in the winter. We are working on changing this, but that’s where we are now.

Every two months I go over the future. I have a spreadsheet that details all of the income we are expecting. Since my clients sign on for three months at a time I can predict at least the next few months. Matt’s shows are booked in advance. Usually we know about the next four or so months, but as time passes they book more shows.

It’s hard to predict the future, but I try!

First I figure out how much we have in savings right now, not including our emergency fund. Since we have two bank accounts all I do is add it up. Then I figure out the expected income for each month, and see how far the money will go. I figure out the overflow and then carry it to the next month. I am very conservative in my estimates just in case.

Here is what my spreadsheet looks like:

Savings + Month – Expenses = Overflow

July

$12,055 + $9,200 – $5,100 = $16,155

August

$16,155 + $5,975 – $5,100 = $17,030

September

$17,030 + $2,600 - $5,100 = $14,530

October

$14,530 + $2,050 - $5,100 = $11,480

November

$11,480 + $3,700 – $5,000 = $10,180

December

$10,180 + $400 - $5,000 = $5,580

January

$5,580 + $800 – $5000 = $1,380

February

$1,380 + $400 – $5,000 = -$3,220

So according to this, if we didn’t add any more work, we would be able to pay for everything through February. Then to make myself feel better I add those 7 months of emergency fund if we needed it.

So technically if we only had the work we had today and nothing more we could pay for everything until next September. Now barring any disaster, I know that we’ll have at least some income this winter, and have a huge income spike next summer. So that will propel us into next winter.

Worst Case Scenario

The first winter we did this I was scared. I predicted the best I could, but I couldn’t let go of this nagging feeling that I wasn’t in control. I wasn’t making much money and I felt like I wasn’t contributing.

I kept thinking about the worst case scenario. What if Matt was injured? What if the economy tanked and we couldn’t book work? (Funny thing is, the economy did tank and we were OK anyway!)

The best lesson I learned was to logically find solutions to my worst case scenarios. They sound so scary when you imagine them. I thought, what if we had to live in our car! Looking at it logically, that would never happen.

I would imagine that we lost Matt’s income completely. We would have our emergency fund, and I would plan to work full time at my business to increase clients. I would also look for a job. If after three months we still weren’t making it and we were burning through our emergency fund, I would put the house on the market.

I would do a short sale if needed. Even if our house was foreclosed on I would still have my beautiful family. We would go live with my parents until we figure out what to do next. We would work our butts off to figure out a way to make it work.

Why was I worried about living in our car? We had friends and family that would help us if we were at our worst. The worst wouldn’t happen, so why keep imagining it?

It also made me realize that we had so many options. If our boat was sinking we wouldn’t have to go down with the ship! We could find ways to save ourselves.

After the Leap

You know what? It gets a lot easier with time. The second winter I was less worried. Even after a hard summer last year (taking time off for maternity leave) we were fine. This winter I feel great. I’m able to contribute more, and I know that Matt is working his butt off to have an awesome winter too.

I feel like we are making progress to combat these hills and valleys. I’m not as worried about surviving anymore. I want to thrive.

What do you think?

If you want to work for yourself but haven’t made the leap, what stops you?

June Income and Expenses Report

So this month will be a little different. I won’t actually be sharing any numbers for June. As noted in my post Stolen: $1084, my laptop was stolen. It had Quickbooks and all of my data. While I do have a lot of it backed up, I didn’t have June backed up.

Instead I will go over the process I use to deal with our irregular income. It is one of the top concerns of freelancers, and it was one of my biggest fears when I quit my job.

My check used to come in every two weeks. I could plan exactly what I was going to do with it months in advance. It made me feel secure and safe. Taking the leap from my job felt like I was jumping out of a plane without a parachute!

Fast forward almost four years. Our income is very sporadic. But I have become so accustom to this lifestyle that it is no longer an issue. Even me, a perfectionist that needs to plan months in advance, can get used to it!

These are the steps I use that help me relax.

Our Emergency Fund and HSA

Our emergency fund gives me so much peace of mind. I’ve heard a lot of people say that we shouldn’t have so much in savings, we should invest it. My peace of mind is better than any return I could get!

We have 5 months worth of expenses in our emergency fund, and about 2 months worth of expenses in our Heath Savings Account (H SA). If we have no income we could live for at least 7 months.

Planning the next months

I still plan. I actually spend more time planning than I used to. This has been the key to my success. I have to plan because our income tends to be seasonal. We make more money in the summer than we do in the winter. We are working on changing this, but that’s where we are now.

Every two months I go over the next six months to a year. I have a spreadsheet that details all of the income we are expecting. Since my clients sign on for three months at a time I can predict at least the next few months. Matt’s shows are booked in advance. Usually we know about the next four or so months, but as time passes they book more shows.

It’s hard to predict the future, but I try!

First I figure out how much we have in savings right now, not including our emergency fund. Since we have two bank accounts all I do is add it up. Then I figure out the expected income for each month, and see how far the money will go. I figure out the overflow and then carry it to the next month. I am very conservative in my estimates just in case.

Here is what my spreadsheet looks like:

Savings + Month – Expenses = Overflow

July

12,055 + 9,200 – 5,100 = 16,155

August

16155 + 5975 – 5000 = 17030

September

17030 + 2600 - 5100 = 14530

October

14530 + 2050 - 5100 = 11480

November

11480 + 3700 – 5000 = 10180

December

10180 + 400 - 5000 = 5580

January

5580 + 800 – 5000 = 1380

February

1380 + 400 – 5000 = -3220

So according to this, if we didn’t add any more work, we would be able to pay for everything through February. Then to make myself feel better I add those 7 months of emergency fund if we needed it.

So technically if we only had the work we had today and nothing more we could pay for everything until next September. Now barring any disaster, I know that we’ll have at least some income this winter, and have a huge income spike next summer. So that will propel us into next winter.

Worst Case Scenario

The first winter we did this I was scared. I predicted the best I could, but I couldn’t let go of this nagging feeling that I wasn’t in control. I wasn’t making much money and I felt like I wasn’t contributing.

I kept thinking about the worst case scenario. What if Matt was injured? What if the economy tanked and we couldn’t book work? (Funny thing is, the economy did tank and we were OK anyway!)

The best lesson I learned was to logically find solutions to my worst case scenarios. They sound so scary when you imagine them. I thought, what if we had to live in our car! Looking at it logically, that would never happen.

I would imagine that we lost Matt’s income completely. We would have our emergency fund, and I would plan to work full time at my business to increase clients. I would also look for a job. If after three months we still weren’t making it and we were burning through our emergency fund, I would put the house on the market.

I would do a short sale if needed. Even if our house was foreclosed on I would still have my beautiful family. We would go live with my parents until we figure out what to do next. We would work our butts off to figure out a way to make it work.

Why was I worried about living in our car? We had friends and family that would help us if we were at our worst. The worst wouldn’t happen, so why keep imagining it?

It also made me realize that we had so many options. If our boat was sinking we wouldn’t have to go down with the ship! We could find ways to save ourselves.

Conclusion

You know what? It gets a lot easier with time. The second winter I was less worried. Even after a hard summer last year (taking time off for maternity leave) we were fine. This winter I feel great. I’m able to contribute more, and I know that Matt is working his butt off to have an awesome winter too.

I feel like we are making progress to combat these hills and valleys. I’m not as worried about surviving anymore. I want to thrive.

What do you think?

If you want to work for yourself but haven’t made the leap, what stops you?

This post was in the Carnival Of Personal Finance.

Why I am Obsessed with Change

Posted by Jaime on July 13th, 2010

Image by cpultz via Flickr

I am obsessed with change. In fact, I think a lot of us are obsessed with change.

You hear a lot of experts say people fear change. I want to change this statement. People fear bad change. People love good change.

For instance, why do most people want a new car? Unless their previous car is breaking down and not reliable there really isn’t a good reason to get a new car.

I still want a new car. I love the new car smell, the new interior, the change. But as soon as the newness blends into the background, as soon as this one seems old, I want a different one.

It’s the fear of bad change that stops people. No one wants to go backward. They would rather stay safe than risk bad changes.

I believe change moves you forward. Both good and bad. Because of this belief I have done some pretty crazy things, and not all of them were helpful to my finances!

My History of Change

In a period of seven years, I have owned four houses in three states.

I owned a home in Rochester, NY.

At the same time I owned a home in Derry, NH.

I owned a home in Milton, NH.

I now own a home in Turner, ME.

In a period of eight years, I have moved seven times.

From my parents home in Lyman, ME to an apartment in Buckfield, ME.

From Buckfield, ME to an apartment Rochester, NY

From the apartment to the house in Rochester, NY

From Rochester, NY to the house in Derry, NH

From Derry, NH to the house in Milton, NH

From Milton, NH to a rental in Lewiston, ME

From Lewiston, Me to the home I have now in Turner, ME.

In a period of ten years, I have had twelve different jobs, in eight companies.

Pizza girl

Dental Receptionist

JC Penney

Tech Support at Lamere

Tech Support at Frontier

Network Operations Tech at Frontier

Engineer at SeaChange

Project Manager at SeaChange

Project Manager with EepyBird

Personal Coach

Business Coach at Next Level Business Coaching

Currently Business Coach/Entrepreneur

Most of the location moves were not good for our finances. We lost money on the house in NY, and we lost money on the house in Milton, NH. (over $30k!) Each move has cost us money for the truck, the new set up fees for utilities, and time lost. So why do we keep doing it?

Most of the moves career-wise have helped my finances (with the exception of leaving SeaChange.) But whether or not they were smart moves, I tend to get bored and want to leave within a short time.

Looking back, I think my belief in progress pushes me toward change. For years my motto has been “Progress.” As long as I am making progress I am happy. Unfortunately I want tangible progress. Improving my speaking skills isn’t tangible, but speaking in front of 200 people is.

I need to have something to show for my progress. That’s why I move, or change jobs. They are tangible and can be measured.

The Next Phase for me

I really don’t want to move again. I don’t want to change jobs. Looking at my history though, I am due for a new house and a career change. I’ve been trying to think of what could replace my need for change that doesn’t involve major changes for my family too.

So I have been thinking about business. I have never thought of myself as an entrepreneur, though I’ve always wanted to be one. I thought an entrepreneur had to have a “serious” businesses and take huge financial risks. The stories I read in Entrepreneur magazine. But I didn’t want to jeopardize my family for becoming an entrepreneur. I have always thought of myself as self-employed.

Business Week describes the difference between an entrepreneur and self-employed person:

“Founders who want to grow companies and freelancers who simply want to make their income working for themselves.”

I realize that this is the change I want. I don’t want to buy and sell more houses. (unless they are investment properties!) I don’t want to change jobs again. I don’t want to be just self employed. I want to build something.

I love the clients I have, and the work I do. But I’ve continued to want more. Apparently I’m not satisfied with just being self employed. I work with clients that have businesses and employees and after our session, I dream about having that too.

This is scary to me. I also have a fear of bad change. What if my ideas don’t work? What if I have to invest more money? What if I can’t do it?

But I think that’s exactly what I need right now. Buying a house was safe. I knew the risks ahead of time. Now I don’t know what the risks will be, but I can do my best to plan for them. The rewards of a successful business far outweigh moving every few years.

Let’s hope my journey will keep us in this house for awhile, I’m pretty tired of packing my possessions in a Uhaul.