How to Start Living Below Your Means

I’m sick today. If I didn’t speak for a living, I could probably still go to work, but I’ve got laryngitis, so I am out of commission. Trouble is, as an hourly employee and freelancer, “no work” means “no pay.” The good news is, Mr. Vega and I have the great good fortune of a fully funded (3-6 months of living expenses) emergency fund, and have gotten the hang of living below our means, so we probably won’t need to dip into savings to cover a few days of lost work.

But it wasn’t always like this. Most of my work has come without paid sick time or vacation days, and before I learned to live modestly, even one sick day could create a financial crisis. Never mind “paycheck-to-paycheck,” I lived “credit card bill-to-credit card bill” for a decade, and viewed due dates as mere suggestions, racking up late fees and ruining my credit, while still getting $100 spa treatments on a regular basis. If I heard the suggestion during those years to live within or below my means, it didn’t register, because I wouldn’t have even known where to start.

It’s been eight years since I found myself living in a small, sad apartment, staring at thousands of dollars in credit card and tax debt, alongside statements for hefty paychecks, wondering how I could have earned such a high hourly rate for so long and have nothing to show for it. Less than nothing, actually, because I had a negative net worth!

Something happened in that lonely apartment, and before I knew it, I was canceling credit cards, filing amended tax returns in search of deductions that had been overlooked in my sloppy record-keeping, and trying out slow-cooker recipes to lower my food costs. I ignored my health and my relationships in order to work as much as I possibly could to get the debt paid. My intense focus got me debt-free within a year, but two years after that, I found myself with a $6,000 credit card bill, and a $20,000 car loan. I had learned how to pay off debt, but not how to avoid it in the first place. I hadn’t learned to budget, and I not learned to live below my means.

My first attempts at budgeting failed miserably, because I based them on templates that had little to do with my actual spending habits. As a single woman living in Los Angeles, I spent more than the national average on rent and transportation, but nothing on child care. Grocery expenses were low, restaurant spending was high, and visits to the hair salon were (and still are) non-negotiable. I came to understand that each of us is unique, and our earning, spending and savings will reflect that. What’s more, even one’s own budget will not remain a perfect fit year in and year out, or from one month to the next. Life changes quickly, and we have to change with it. I learned that if you’re ever going to get a handle on this money thing, you have to write down everything you spend. This is a requirement for success, but I struggled with it terribly until I discovered Mint (with whom I am not affiliated, and from whom I have received no compensation), which made it easy for me to see where the money was coming from and where it was going, so that I could begin to make changes based on what was actually happening.

With the whole ugly truth laid out in front of me, the first thing I did was to stop the most obvious money leaks. These are the areas where economizing is relatively painless: I started buying six-packs of soda at the grocery store and taking drinks to work instead of dropping $1.50 a day into the vending machine. I’d drive around the block looking for street parking instead of mindlessly pulling into the pay lot. My lifestyle didn’t change much, and I was still spending too much money, but I was beginning to wake up to the possibility of doing things differently. Things got much more refined later, but at this early stage, every time I didn’t super-size my order was a win for me.

After I got the hang of easier things, I began to get creative with the less-obvious opportunities for savings. I scoured my auto insurance policy for coverage I didn’t need, checked that my cell phone plan wasn’t more than I needed, and scheduled coffee dates with friends instead of dinners out. It became a game for me, and no savings was too small: the double-loader washing laundromat machine that cost a quarter less than two separate loads, the ten-cent savings at the coffee shop for bringing your own cup (later, of course, I switched to brewing my own coffee), the grocery store that offered a nickel credit for bringing your own bag…. I began to enjoy finding some sort of savings everywhere I went. After all, pennies add up to dollars, eventually.

Another major step in my financial awakening was beginning to declutter. I thought selling some of my no-longer-used things might be a good way to create more space in my home and in my budget. It was quite a shock to learn that I couldn’t expect to receive even half of what I had paid for most things, even if they had never been used! The exercise of decluttering and downsizing my possessions made me keenly aware of the purchases I made going forward. I have since cultivated a practice of buying less, buying for life when I can, and doing my level best to avoid retail prices everywhere else.

When I had just about reached the limits of minimizing my expenses within the life I was living, it became time for me to make a big move. For me, this first meant cutting cable and killing my TV, and later, moving in with a roommate to reduce my rent by $400 a month. And while it seems counterintuitive to not have begun with these things, baby-stepping my way up the ladder of frugality allowed me to garner small wins and develop an experiential conviction that larger sacrifices would be worth the effort. And they definitely were.

With my expenses cut as deeply as I could manage, my next task was to learn to earn more, which was by far the riskiest thing I did, as it involved working less, and taking a few chances with my schedule of part-time jobs and freelance work. But because I had finally paid off all my debt (again!), and brought my expenses more in line with my earnings, I could afford the gamble. The graphs and trends on Mint helped me realize that the job I deemed most stable, but that also caused me the most stress, accounted for only 10% of my annual income. With some trepidation, I left that job and increased my availability with the employer who was less stable, but paid much more. As last-minute freelance assignments come with a 20% premium, I held off on booking lower-paying work in advance, in the hopes that the higher-paying, same-day assignments would be plentiful enough to meet my needs. And I spoke up: when a new manager came on board at the freelance agency, I told him honestly that although the agency was one of my favorite employers, I frequently declined work there in favor of higher-paying jobs. Within the month, I was offered a rate commensurate with what I earned elsewhere. By choosing my assignments carefully, and giving highest priority to the highest-paying jobs, I was able to increase my income and reduce my workload.

Rinse and Repeat. By the time I had found so many ways to reduce my daily expenses, had brought down a few of the big ones, and learned to make more money in less time, life had changed enough that going back to the beginning seemed like a good idea. I had met and married my husband, and we began budgeting together early on in our dating relationship. “My goals” had been modified and expanded to become “Our goals,” which included saving for a house, and while the household income had doubled, regular expenses had not (two may not live quite as cheaply as one, but happily, the cost of running a household doesn’t double when its occupancy does). Eating a nearly meat- and alcohol-free diet didn’t work so well for my husband, so grocery expenses were higher, but cooking and eating at home was more fun with a companion, and so the restaurant budget shrank. And since we moved from California to Texas, we’re spending less on gasoline, but more on mosquito repellant!

Perhaps the biggest lesson I’ve learned on the path to living below our means is that you’ve got to have fun doing it. Brown-bagging my lunch means I get to eat healthier, more interesting meals every day, and still have enough money to get my hair done every other month, without having a minor panic attack when it comes time to pay. Losing my loyalty to name-brand products made by companies who aren’t concerned with my well-being means that I can fill our fridge without draining our bank accounts. Finding free fun on weekends lets us enjoy life while saving for a house. And taking a few calculated risks in order to earn more money allows me to stay home and write when I’m sick without fear that the lights will get turned off next month because of it.

Is living within or below your means important to you? What changes have you made, or would you consider making, to do it?

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Work More, Earn More? Not Necessarily

A lttle over four months ago, Mr. Vega and I packed up a moving truck and left California for Texas, in pursuit of the American Dream. Real estate is cheaper here, we had read. Texas has no state income tax, and unemployment is lower, especially in Austin, our city of choice. What we didn’t quite plan for, however, is that while still much lower than in Southern California, the cost of living in Austin has increased dramatically over the past few years, and most incomes, including those in our fields of sales and service provision, haven’t kept pace. Our natural response was to kick into high gear at work, but we are coming to understand that working more doesn’t automatically mean earning more. Here are some things we’ve had to consider in our search for the sweet spot in our schedules:

In all freelance work, as in sales, it’s important to consider that opportunity cost is inherent in commitment. For every gig I accept, or every meeting Mr. Vega schedules, there will be others that we will miss. And while it’s unwise to try to keep one’s options so long that all the chances dry up, it’s generally a good idea to leave a little space in our schedules to take advantage of previously unforeseen opportunities. As a side benefit, rush jobs or last-minute gigs often come at a premium. In Los Angeles, same-day requests for service in my line of work are billed at a higher “emergency rate,” but that isn’t standard practice in Austin. What I’ve discovered as a freelancer is that, even though it’s out of the norm here, some clients are indeed willing to pay a 20% premium to have same-day service requests covered, and so I’ve gone against the grain and set my rates accordingly. In Mr. Vega’s line, the more urgently his customers need service, the more they’re willing to pay for it. If he were to schedule all his meetings three weeks out, he would run the risk of not being able to provide service to clients who need contracts signed today, so they can be up and running next week.

Profits aside, helping people handle their professional emergencies builds goodwill. There are many reasons besides procrastination that people need service at the eleventh hour: deals fall through, providers fall ill, and bad luck can befall anyone. Whatever we charge (and it’s not always more) for last-minute work, our clients and customers will hopefully remember that we came through when they were in a tight spot, and express their gratitude through referrals and repeat business.

Another good reason to avoid the temptation to over-book is that diversifying work environments grows word-of-mouth. We could keep the bulk of our efforts focused on a few select clients, but that increases the risk of decimating our income if we were to lose just one or two. Instead, we believe that the more people we can get our faces in front of, the more our phones are likely to ring. We need to leave a little margin in our days if we want to widen our sphere of influence in order to keep our income more stable.

Once the opportunities have been claimed, it’s important to bear in mind that working less can yield a higher-quality work product. There’s a joke sign I’ve seen hanging over the cash register in auto mechanics’ shops: “Good, Fast, or Cheap. Pick two.”  In order to earn more, we have to be willing to deliver a quality work product on-time, every time. The more over-booked we get, the more likely we are to cut corners or miss deadlines. And the more we do that, the more we have to lower our rates. So, declining work every once in a while allows us to do better in the work we do accept.

So, we’ve left some options open, and we’ve given ourselves time to do good work, but we also need to leave some room in our lives for self-care. Because in reputation-based careers such as ours, image is everything. I work closely with my clients, often when they are meeting new people, and am frequently viewed as an extension of them. If I am late, disheveled, or too exhausted to perform my duties well, that will reflect on the people I am assisting. One bad experience can result not only in losing that person or entity’s business, but also to developing a reputation as a service provider to avoid. And in sales, people are more likely to buy what you’re selling if they want what you have. The “used-car salesman” stereotype exists for a reason: too many salespeople have bought into the “work more, earn more” paradigm, and they come off creepy and desperate. But if a salesperson who appears fit, rested, and organized recommends a product or service, then unconsciously, folks are more likely to think that making the purchase just might make them a little more fit, rested, and organized. And because we allow ourselves a bit of time to attend to our lives outside of work, we’re not the people asking you to wait while we make personal phone calls or respond to texts. When we’re at work, we’re… well… working! Doesn’t that sound like someone you want working for you?

The concept of working more to earn more also reaches its limits when we find ourselves spending more money to maintain a busy work schedule. In our household, healthy eating is one of the first things to suffer when we get overbooked. We get so busy that cooking gives way to restaurant takeout, and eventually gets downgraded to fast food. “Just this once” becomes nearly every night, and then starts to include lunches, too. In addition to the expense of the food itself, the lack of quality nutrition contributes to lower energy levels and weakened immunity. The more poorly we’re eating, the less resilient we become, and eventually, our go-go work schedule leaves us sick and unable to work. Not to mention the weight gain, which can lead to having to buy new clothes that actually fit (Also, am I the only person who has ever bought clothes because I hadn’t found time to do laundry?) Minor clothing repairs can escalate into major wardrobe malfunctions when left undone due to busy-ness. Hectic schedules also deprive us of time to care for our homes and our cars… neglecting maintenance and repairs can be costly in the long-run, and few things are more embarrassing than exiting a cluttered, filthy car and finding yourself face-to-face with your client.

Keeping a too-busy life also harms personal relationships, which are a requirement for mental health and long-term happiness. After all, if we’re doing all this work to be able share the rewards with our loved ones, we’d better make sure there are some loved ones still around when we finally reach our financial goals!

To that end, I think it’s worth looking at why we’re so driven to earn. Perhaps you’ve heard the story of the American businessman who takes a vacation to Mexico, where he meets a young father who spends his mornings on the beach, fishing only enough to feed his family, and then spending the rest of the day with his wife and kids. The businessman tells the fisherman that he should fish all day in order to sell some of the fish and earn money, so that he can buy a boat and employ a crew to earn even more money. The Mexican fisherman asks the American what the result of all that work would be, to which the businessman replies “Well, after many years, if you work very hard, you can retire, and spend your days fishing on the beach with your wife and grandchildren.”

Certainly working and earning to better our lot in life is a noble goal… That’s exactly what we’re doing, and why we made our big cross-country move. But there comes a point at which simply doing more work starts to take us farther from what we’re trying to achieve, rather than moving us closer to our goals. As Mike Rowe says, “Work smart and hard,” and that’s exactly what we’re trying to do.

Networking Works, Y’all!

My work takes me into all kinds of environments, but there’s one I prefer in particular (I’m being deliberately vague, for reasons of confidentiality). Before we moved to our new city, I was told by several people that there was one person in particular I needed to speak to about working where I most wanted to work. We had met once, several years prior, and I correctly assumed that I wouldn’t be remembered. I arranged an introduction, which went well. A day later, someone more influential re-introduced us, which was good, because again, I wasn’t remembered. Sigh.

Later, I sent a follow-up email, and…. you guessed it, I still wasn’t remembered. I’m not sure what was going on with this person, and I know it didn’t have anything to do with me, but I was getting frustrated. So frustrated, in fact, that I decided to drop it and pursue other avenues of employment.

A few months later, I found myself at a professional event. The person was there, but I didn’t attempt to reintroduce myself, and in fact, it appeared to me that there was no recollection by that person of having ever met me. As it happened, though,  I met a few people who work where I want to work. I enjoyed talking to them, joined them for lunch, and handed out a few business cards. Upon learning of my credentials, one of them told me that there was a need for my services, and that I should call the person in charge the very next business day.

Before I had a chance to make that phone call, though, I received one. It seems there was an urgent need for me specifically to come work there right away! A hiring process that normally takes weeks was expedited, and I was doing my dream job less than a week later.

The person that everyone says is the gatekeeper to that job was never involved, and appears to work in another department altogether. I’m looking forward to learning why everyone around here thinks that’s the go-to person, because it’s sort of a mystery to me right now, but I’m glad I found a workaround. Or, should I say, I’m glad the workaround found me!

 

 

How I’m Approaching Freelancing in a New City

First Things First: Update That Resume!

As soon as we knew we’d be moving, I updated my resume, something I hadn’t done– not really— in years. I needed to know my exact dates of hire and separation, as well as exact rates of pay, which took several phone calls and a visit to an HR department across town. I had worked there so long ago, my employment history was on microfilm, but as the work was still relevant to my career, it was important information to track down.

Once I had my resume in order, I made sure to send it to all the potential employers in my new city, with a short note introducing myself. Also, I included it as an attachment with follow-up emails, so that they wouldn’t have to look it up, if they wanted to refer to it.

 

Attend to Social Media

Because I’d worked at the same jobs and with the same agencies for many years, I’d never bothered to join LinkedIn. Nearly the moment I did, a client of mine from years ago wrote me a glowing recommendation, for which I was very grateful. I spent some time creating a professional profile that was as complete as possible, working from my aforementioned resume and also poring over the pages of colleagues, scouting for language and ideas that might be useful for mine. I endorsed every connection that I legitimately could, and took a look at their connections for names that I knew (or wanted to know).

I recently posed for a professional headshot, as well, to add to my LinkedIn, as well as to a few other sites specific to my profession.

Mine is a tight-knit profession, based almost entirely on reputation. Personal and professional relationships are quite fluid and often overlap, and so in my case, it was appropriate to reach out to my Facebook contacts, and to add my new colleagues as friends right away. Because of that, I took a closer look at my privacy settings and personal timeline, in order to ensure that my social persona was represented as being in alignment with my professional image, so that potential colleagues and employers in my new city would be able to see whether I am someone they’d like to work and play with.

The idea here was not to change how people might see me, but rather to ensure that what they were seeing was congruent with how I actually live and work. Funny enough, the links I posted to the Community Supported Agriculture garden we have a share in sparked many a workplace conversation about healthy, local eating with colleagues who vary widely in their other interests. Being honest about my home life in social media has strengthened several good professional connections!

 

Reach Out to Tenuous Contacts

Several colleagues of mine from Southern California had moved to Austin in the few years prior to our move. Although I wasn’t particularly close to them back then, I asked a mutual friend to help me get in touch, and that proved quite helpful. One man in particular sent me a detailed email, outlining every agency and employer he could think of in the area. He was also, I suspect, instrumental in helping me get the part-time gig I like the most, and you can better believe I won’t forget that soon!

 

Manage Finances to Avoid Desperation!

Even though Mr. Vega would have liked a new car, and we both would have liked an infinite number of new gadgets and furnishings for our new apartment, we kept a tight rein on our spending until we had secured reliable income. We sought out free fun and inexpensive sustenance. We diligently turned up our thermostat each day until we got our first electric bill, and waited for those occasional free Redbox codes to show up in our email.

Moving with a fully funded Emergency Fund, and staying frugal during our transition allowed us to accept assignments based on more than money, and to gracefully weather those first few weeks before the checks started coming in. We’ve been able to avoid overworking ourselves just to make the rent, and to keep our options somewhat open while we learn the nuances of our new home town.

 

Accept That Not Everything Will Pan Out

Before we moved, I applied for a few job openings online, and, for the first time in my career, wasn’t even asked to interview for any of them (remember, our field is based on reputation, and no one knows me here, yet). Well, as it happens, my freelance assignments and part-time gig turn out to pay much more than the regular positions would have. And since Mr. Vega has a job with benefits, it’s better for us financially if I take the higher-paying work over the stable, lower-paying jobs that come with health insurance and the like.

I also had a few coffee dates with potential new friends in my field that weren’t quite a match. We tried our best, but just like romantic dating, there’s an indescribable something that must be present for a friendship to work. And like romantic dating, the magic usually happens when you least expect it.

But it’s a numbers game: the more you try, the better your chances of making a connection.

 

Listen More Than You Speak

Rather than trying to impress everyone with my vast knowledge and spectacular word usements, I chose to keep my opinions to myself for a while and listen to what others had to say. “Tell me more,” became my favorite response. In this way, I got to hear how folks navigate the professional culture here, and what works best for them. And although I do my best to avoid gossip, when three people I met in three different environments each expressed misgivings about a particular employer, I paid attention! Because the only thing better than leaving your difficult boss is never working for her in the first place!

Waiting to express strong opinions also gave people the opportunity to get to know me by my presence and work ethic, rather than by what labels I give myself elsewhere. Letting people think of me as “the one who always shows up early,” or “the one who is attentive and hardworking” is probably better right now than being remembered as “the one who votes Democrat,” or “the one who avoids GMOs.”

 

Attend Orientations, Meetings, Workshops

As much as I’d prefer to avoid any event where I get to wear my name on a sticker, I’ve gotten to as many networking events as I can since our move. The Saturday morning staff meeting at my new part-time job that my boss said I could skip because I was so new? I was there bright and early. The annual end-of-summer gathering of hourly employees at my other tiny gig? Present and accounted for, with my name tag on. Spend an entire Saturday in a skill-building workshop with other members of my profession? You’d better believe I’m going. Right now, I’m the person who will attend the opening of an envelope, if it will help build my name recognition, and familiarity with my peers and clients. Suiting up and showing up is half the battle, GI Joe!

 

Avoid The Temptation to Overbook (Accept Sub Assignments)

It’s been important to leave a little blank space in my schedule, so that I can accept the occasional last-minute gig. This allows me not only to be helpful when there is a need, but also gives me the opportunity to work in jobs I haven’t been hired on for permanently. And again, any time I’m able to meet a new client or colleague, it’s an opportunity to build reputation and create connections. As an added bonus, every time I accept work in a new part of town, I get to learn the city a little better.

And if the work doesn’t show up for the days I’ve left open? I still have plenty of post-move organizing to do, and it seems like I always am in need of a car wash, a manicure, or a trip to the grocery store.

 

Do Something Else! It’s Not All About Work!

We’re very fortunate to have moved to a place that offers abundant opportunities to get outdoors and have fun. Austinites are serious about their fun, and there is live music and good food just about everywhere you go. It’s been lovely to get out of the house a couple of times each week to disconnect and recharge. It took years to create the rich, supportive professional network I enjoyed in my hometown, and my new life won’t be built in a day. After doing all the work outlined above, it’s important to give it all some time to develop organically. Because as much as I love my work, it’s really only something I do so that I can enjoy the rest of what life has to offer!

(Los) Vegas are Leaving

A little over two years ago, after a ten-month courtship, we stood in front of about twenty-nine people in Twentynine Palms, CA, at 2:29pm on February 29, and got married.

In our wedding vows, we promised to come together and create a new home, one that would be a place of peace and joy. I don’t know how many couples include homemaking in their vows, but I think we had each found ourselves in so many tough spots in our lives before we found each other that it was important to us to have a soft place to land in this marriage, and not just figuratively. We’re gentle, sensitive people, and we need sanctuary from a world that’s getting harsher and more indifferent by the day, it seems. We also long for a space big enough to not only keep us safe, but also to welcome in loved ones…and strangers who may become beloved, as many of our friends already have.

We found a tiny little apartment in a not-so-great neighborhood for much less than the going rate, and we got down to work: there were debts to pay, bodies to mend, losses to grieve. Most importantly, there were dreams to be dreamt.

Over hot stoves, on long car rides, in the relative safety of our bed at night, we began to create the vision for the life we wanted. We spoke of a small house with a big garden, and (hopefully) a child or two. In our minds’ eyes, we sketched out the kitchen, decorated the family room, and chose the type of insulation we wanted. And all the while, we counted our pennies and saved as much as we could.

The pennies added up, but not quickly, and the harder we worked, the farther away our dream house began to feel. We watched real estate prices rising in our city, and calculated how many more years it would take for us to afford a home… The younger of us turns forty this year, and we began to awaken to the reality that, if we don’t want our starter home to be a retirement home, we needed to consider leaving Los Angeles.

Our search for a New City began with the one we visit the most, in the Great Pacific Northwest. We have siblings there, and a niece (and now a new nephew!). Could we forgo our dream of a long growing season to be closer to loved ones? Almost certainly. Would the one of us that’s prone to depression find a way to thrive in a city that sees two hundred and fifty rainy or cloudy days annually? Probably. Could the spouse that identifies as “Hispanic” acclimate to going days at a time without speaking Spanish to passersby on the street, or folks at the grocery store? Um… maybe?

As we considered that city, and the next, and the one after that, we came to recognize, and be able to define, what elements our New City would require in order for us to manifest our full potential as individuals, and as the family we were becoming. We began looking for a place that would offer ample opportunity for growth in each of our careers. A place at least as sunny (if not as arid) as our beloved City of Angels. A city where each one of us, brown and white, could see ourselves reflected in the faces of our neighbors, and hear the music of our native languages in their voices. We wanted big-city happenings, and a small-town feel. A place where our aspirations could rise as our roots deepened. As our list of wishes grew longer, our list of cities grew shorter. Until finally, one city remained: Austin, Texas. And we’re not only asking what our city can do for us: The city has issued a plea for years, on bumper stickers and tee shirts, to “Keep Austin weird!” We figure we could help with that. We’re givers, that way.

We set a timeline for early 2016, and re-dedicated ourselves to saving up for the move, but as luck would have it, we lost a job rather unexpectedly, and for confounding reasons. It seemed unfair, but it also seemed like as good a time as any to go. After all, if we were going to conduct a job search, why not do it in our New City? Moving Day just advanced by a couple of years, and is now set for June 2014. Which is like, almost now.

We don’t feel ready, but perhaps that’s the point of a Big Adventure, isn’t it? At some point, you just have to start, and trust that, if you’re on the right path, what you need will be provided.

At least, that’s the plan…