I am really lazy when it comes to numbers, mathematics or anything related to those two. That’s why I never have the slightest idea of living on a personal finance strategy. I admit that I’m bad at math. I’m bad at money controlling as well. But these are just excuses.
I’m not a shopaholic. But I do buy things randomly when I feel like it.
Looking back, in around 2016 I got a full-time job and a good side project which brought me about 1200USD income per month. Yet I didn’t have a single penny saved that year. I spent all buying random stuff, from goods for my toddler, too many unnecessarily expensive clothes (you know there’s a type of people who buy clothes they never wear – I’m used to be one of them), a resort trip (okay this was worth it), eating out at expensive restaurants, life insurance (I jumped into investing in it even though I didn’t really understand about insurance at the time)… and I don’t even remember how I spent the rest.
How does no personal finance srategy affect your life as a freelancer?
Working as a freelancer means that you’ll have to live less comfortably when you’re at the first steps into this job. Like me, even if you don’t like doing the maths or calculating the number, it’s really important to do so to balance your life. Especially when you’re raising a toddler and have a family to care for (again, just like me).
If you don’t watch out for how you spend the cash – especially when your cash resource is unstable or even lower than your latest full-time job – you will not survive the freelancer life.
Now, here’s the question: how do you control your cash flow (in and out)?
A personal finance plan with a budget will help you. However, I think it’s unnecessary to exaggerate ỏ overdo your “personal finance plan”. All you need to do is:
1. Track down all the money source/amount you earn in one month with the amount of money you spent within that month. Divide your spending into categories (such as Food, Fashion, Mandatory Bills…)
2. Find out where your money went to. Did you spend too much on eating out? Or buying too many new clothes
3. Define the budget for each category (except for the mandatory bills like electricity bill, gas, …). Remember to divide your money into different “wallets” too: one wallet for spending, one for saving for an emergency case (wedding invitation…), one for retirement saving,…
Changes for the better
In my case, after being surprised that I spent all I earned, I also discovered this little hack: each month I spent around 260,000VND washing my hair at a hair salon. If I do it by myself at home, I can save 260,000VND to pay for my insurances’ fee. The amount of money is exactly the same. The reason for having my hair washed at the salon is just because I feel comfortable by letting others do it. Nothing special. I can get rid of that to save money for better use.
I also switch to buying fewer clothes. I started sticking to wearing denim pants with T-shirts and wearing sandals or non-brand shoes. I don’t walk too much so I don’t really need high-end brand’s shoes like Addidas (but I do have one pair of Addidas for running). I also choose to wear basic colors like black and grey. It makes me happier when I have fewer options to consider. It’s kinda “minimalist” style.
I’m just starting my first month of personal finance tracking. I’ll write about the more details/insights I collected along the way. Wish me luck, hehe.