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Working Out the Numbers After a Bad Month

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Okay, so you may have noticed, I am not posting monthly income reports anymore.  I stopped a couple of months ago.  Someone took offense or was jealous and reported me to Google for selling ads that Google frowns upon.  So it has become unsafe for me financially to be completely open – sucks, huh?  It irks the crud out of me…

Bad Month

Anyway, March was about the same as previous months but our income in April took a hit.  A bunch of advertisers are a bit gun shy thanks to Google hits.  Mr. BFS and I aren’t starving to death and we can still afford our new home, but we have had to seriously look over our budget.  Neither of us wants to return to a commuter job, so we are truly evaluating what we need to be happy – financially and in general.

Our Priorities

We had to sit down and make a list of our life priorities.  These are the people and stuff that are most important to us right now – we can give up other stuff in order to keep these people and things in our lives.

  • Friends (free, yay!)
  • Family (free, yay!)
  • Dogs ($)
  • Jacqui, our housekeeper and friend ($)
  • Ben, our lawn guy ($)
  • Our new home ($$$)
  • Paying off our current home ($$)
  • Not having to commute to work (Mental Health is Priceless)
  • I like to blog (Makes $)
  • Mr. BFS likes sports officiating (Makes $)
  • Financial Freedom in the next 10-20 years ($$$)
  • Fun – no matter what, we do want some fun in our lives, so we will need fun money ($$)

Tightening Our Belts

We have created a new budget for the next few months until business either returns to “normal” or a new normal is figured out.  New notes are in red.  Yes, there is almost no “fun” money in this budget – don’t worry, we had already paid entry fees into two Curling Bonspiels (tournaments) in May and August – that’ll be our fun.  🙂

Here is how our budget looks right now:

  • Mortgage (only until May 2012 hopefully until the end of 2012 at least) – $900  $505
  • Roth IRA – $300
  • Health Insurance – $315
  • Life Insurance– $30
  • Car Insurance – $110
  • Gasoline – $150
  • Electricity – $150
  • Water – $30
  • AT&T U-Verse & DSL- $140
  • Sprint (smart phones and unlimited data) – $140
  • Housekeeper – $130
  • Lawn Services – $50
  • Netflix for Us – $10
  • Netflix for Grandparents – $20  (They cancelled this a few months ago though – not our idea or suggestion.)
  • Groceries – $300
  • Fast Food / Restaurants – $300
  • Misc. Bills – $150
  • Toll Roads – $50
  • Car and Home Account – $500
  • Joint Entertainment – $50
  • Hubby’s Fun Money – $100
  • My Fun Money – $100
  • Emergency Fund/Savings – $250
  • Vacation Account – $50
  • Tax Account for IRS and Property Taxes – $400
  • Cash for Investments – $200
  • Cash – $200
  • Total Bare Minimum Current Budget = $5100  $3200

We are averaging $15,000 a month in 2012 through blog advertising and freelancing . Taxes eat a big ol’ bite though – at least 33% to 40%.  All extra money is currently being kept as cash for padding for the new house, new housing costs, and paying off our current home.  After we go through closing in September 2012, we will reevaluate and start saving a ton again in Roth IRA’s and a SEP IRA.

Future Costs and Income

Since we are having a new, pricey house built (well, pricey for me…sorry to everyone on the coasts that hate me), we will have an additional $1050 a month for a mortgage and $850 in property taxes, HOA dues, and homeowner’s insurance.  That’s about $1900 a month.  And our new utilities are expected to be around $300 a month, so that’s about $100 more than now.  I’ll just call it an even $2000 extra a month.

That will be on top of the $800 a month we pay now for our current home ($520 for mortgage and $250 a month for property taxes and homeowner’s insurance).    That means that in awful months, we could be paying out about $3000 a month for two homes and not making anything.

So we could be looking at $5200 a month as our bare minimum without hardly any savings.  And I really would want savings (you know me), so that would be an additional minimum of $500 a month for Roth IRA’s, $300 for the emergency fund, $500 for the car fund, $500 for investments, and at least $200 for fun.

What This Means

That said, my honestly happy number would be a minimum of $7200 a month, so $11,000 in income before taxes.  If we need $5200 just to cover expenses in bad months, that means we need to make at least $8,000 to get that after taxes but we’d be saving nothing.

$8,000 – $11,000 a month after blog expenses is very doable but a bad month made us scared.

My Plans to Cover Our Butts

I am not stupid.  I know aiming for 5 digits a month is alot.  Believe me, we were only making $7000 a year before taxes and benefits less than a year ago.  I know.  But I also know that we can do it, here’s why:

  • We have always lived on a budget, so we can keep that up.
  • If we have to cut expenses anymore, we can easily get rid of $300 in extras like cable and Mr. BFS’s personal trainer.
  • $1300 a month in rent on our current home is doable – it is slightly less than the comps in the area, so it should go fast
  • $600 a month in rent on one bedroom of our new home – very doable, we already have a set of friends lined up
  • $500 a month in rent on a second bedroom of our new home – doable, we have one maybe and can branch out
  • $300 a month for commenting services – that’s if I do not get any new clients
  • $4000 for reffing from September-December – so $300 a month on average
  • Paying off our current mortgage would mean $505 could stay in our pockets

That’s a little more than $3800 if we follow through on it all and that’s without even thinking outside the box anymore than we are now.  I could always go back to petsitting for $20-$30 a night per dog, babysitting, or Mr. BFS could get a part-time job doing something he likes like fixing the bowling alley’s machines or shelving at the public library.

In short, we should be good even in the bad months like April.  And in the great months, we will continue to squirrel away a big part of the extra.  But it is always good to have backup options.  Always.  I never want to be at the mercy of money again.  And we should spend towards our priorities.  Period.

What are your priorities?  What are your financial backup options?  How would you make some extra money if you had to?



FYI:  I worked at a dead end cubicle job from 2005-2011 for about $30,000 per year.  I went self-employed in July 2011 and make between $70,000-$90,000 through blogging, professional pet sitting, hubby's reffing, and our rental home.  If you’d like to start your own site (link to my free step-by-step guide), I highly suggest checking out Bluehost (my referral link with a nice discount for you, PLUS a free custom header banner from me!).  Please contact me any time at budgetingfunstuff*at*gmail*dot*com with questions or just to brainstorm! I’d love to help!
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25 thoughts on “Working Out the Numbers After a Bad Month

  1. I didn’t want to say it, but I am one of those people on the coasts that hate you.. 😉 haha. Seriously, the cheapest house I could buy in my town would be like $300k for a small 2BR built in the 1800s. haha. I guess that’s part of the reason why we aren’t planning on living here long term.




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  2. Wow – I didn’t realize that somebody reported you and that’s how all of that mess got caused. That’s UNBELIEVABLE! What the hell is wrong with people these days? Everybody is so damn envious of one another. Ridiculous.

    Anyway, the sacrifices you’re making by renting out rooms in the new house are quite impressive. That’s something I probably wouldn’t do unless I HAD TO. But I work 100% commission as well and I know how scary it can be not know if the $$$ will come in on a consistent basis.

    Kudos to you for thinking outside the box and being willing to sacrifice. Most people wouldn’t do that and would be stuck up shits creek without a paddle.




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  3. I’m really sorry that all of this happened to you! That really stinks that it happened. I hope everything picked up soon, but it looks like you have a great budget.




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  4. It sucks your income was reduced because of a jealous rat. Either way, it still sounds like you’re doing well. I love that you’re using your home to generate extra income. As someone who is self employed, you already have to pay extra taxes for Social Security and Medicare. At least your rental income isn’t subject to self employment tax.




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  5. That stinks about what has happened. At least you have a plan and some flexibility in your budget(s). Yes, I’m jealous about the cost of your housing ;), but I’m not jealous of the possibility of having to pay two mortgages simultaneously! That’s a little scary for me. Hopefully things will pick up soon (for the both of us – LOL!)




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  6. With the studio slowing down a bit (barely mad my magic number in April), threat of June layoff for the wife and google messing with Internet income… Yes we are tightening as well

    Wish you luck 🙂




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  7. I have to say, I am a little scared for you. Especially if there is a possibility that in order to have your “dream home” you might have to rent out two of the bedrooms in it. I don’t know about you, but I’d rather have a smaller paid-off home and privacy than to have roommates. But that is just me. 🙂 BUT… I am also VERY confident that if anyone can come out of even the worst months ahead of the game and still financially stable it is YOU! You always continue to amaze me with what you can achieve. I’m excited to follow you on this journey and read about your adventures.




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  8. I’m really sorry to hear about being reported to Google. 🙁 I enjoyed your breakdowns on traffic/income – but you definitely have to do what you need to do to protect yourself from future troubles!




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  9. I agree with Denise above.

    It seems like your dream home is going to cost you a lot of money — I live in a big city on the east coast, and a 700 sq foot apartment here costs upwards of 500K. You have an 1800 sq foot house right now with a very very tiny mortgage for 1/4 of that! You are very close to complete debt freedom, but you dump 260K on an even bigger house — easily multi-millions up here — and then write a post about how it’s going to be difficult to afford it if your business falters. This makes no sense to me.

    Before they build the house and it’s a done deal, I urge you to talk to Mr. BFS about your hopes and dreams for the future. What If you have kids!!!??? They are expensive — and your budget is already stressed to its max, from what it seems. Do you want to help them pay for college? Will you be able to if you have a another big mortgage? These are all things you should be thinking about.

    I say, forget the house, save a ton of excess and re-evaluate the situation in a few years… This is a fine example of lifestyle inflation and depending on your future self as you can find and is a terrible idea IMO. I am only commenting here because it seems like the “echo chamber” of the PF blog-o-sphere is definitely mis-leading you.

    PS: This is from someone whose in his mid-twenties and has paid off almost 100K of loan debt a few years after graduating while living on their own.




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  10. You seem so earnest, and I think your plans for financial success are sound, as is re-adjusting every so often so that you stay ahead of disaster. I had to giggle at “irks the crud out of me” — such language!




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  11. I’m planning on getting roommates at my new house to help cover the mortgage payments and the bathroom remodels. Other than that I’m hoping to do a garage sale and get my personal blog up and running after I’m in the house.




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  12. @20’s Finances, lol, I know, I know. I wouldn’t ever be able to move to an extremely more expensive city now…too spoiled.

    @WorkSaveLive, yep, it is ridiculous and stupid, but I sort of knew it would happen eventually. We’ll just rebuild and move on.

    I don’t see renting out rooms as that much of a sacrifice since we did it in our current home for 2 of our 5 years here. 🙂 It’s great if the renter is great and our renters that are lined up to live with us are trustworthy friends. 🙂

    @Michelle, thanks!

    @Shawanda, good point!

    @Little House, the two mortgages will be for less than a year (probably less than 6 months) – I guarantee it. We only have $26,000 left on this one. We just need the cash on hand more right now. By the end of this year or the beginning of 2013, we will be down to just one mortgage. 🙂

    @Jeff, good luck to you too!

    @Tushar, that’s the plan. 🙂

    @Thomas, no commute really is huge. 🙂 And not spending 40-50 hours of my own week making a billionaire richer while I bring in $26,000 take home a year makes me much happier. 🙂

    @Denise, please don’t be scared. Those are just options if the business can’t bring in $8000 a month. That hasn’t happened since it truly took off last year. We will most likely be renting out one room of our current home and future home, but not because we have to, just because one set of our friends (an engaged couple out of college) needs help and rather pay us rent than mess around with strangers. Plus, we rented out our third bedroom in our current home for 2 of the 5 years we’ve been here (1 1/2 years to strangers), we are already used to it. 🙂

    @Sheryl, please feel free to email for income updates anytime. 🙂

    @Double A, this post was actually to show that we’ll be fine. Not “it’s going to be difficult to afford it if your business falters”. If our business falters, we will make up the difference through those backup options. But our business has never brought in less than $8000 since it took off last year. Now I feel sort of bad for not making that point more clear in the post.

    We aren’t having kids. Or at least not yet. And if we have one, we will do what we have to. But our budget isn’t stretched to the max. This post was about saving cash for the next 4 months and then hitting our stride running after that. Our current mortgage only has $26,000 left. We will not have two mortgages for more than a year and probably half of that. These are just details that are in past posts…

    All of my life plans depend on my future self. When we bought our current home, I was making the assumption I’d be able to pay for it. This isn’t any different, I just ran the worst case scenario numbers because that is what I do. I like making sure that I can handle the worst case.

    I appreciate your opinions, but I have also paid off more than $100,000 of debt in my twenties…it was car and house debt since I worked my way through college, but it was still debt. This worst-case-scenario budget was mainly just to prove to myself that we’d be good no matter what. 🙂

    And having roommates really isn’t bad at all when they are friends or just awesome people in general. We rented out our third bedroom here to a friend for 3 months, an awesome stranger that was just an amazing renter for 1 1/2 years, and then a complete ass for 3 months. The ass reminded us to only rent out our living area to friends. I think I wrote a post about it at My Tenant From Hell…this reminds me to write another one for BFS. 🙂

    @Frugal Portland, yeah, “it pisses me off” didn’t seem to be as PC as I was aiming for, hahaha.

    @Jenna, we’re selling off stuff now too. Good luck finding great roomies!




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  13. Glad to see that it looks like things will be OK for you. Things are so much easier to budget when you have a consistent income, but then you have less opportunity to make extra! It sounds like you have a good handle on your options and they seem realistic which is most important!




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  14. I’m sorry you aren’t able to post your actual numbers anymore – I loved reading your update posts. I like that you not only have a plan, you have a back up plan.

    WE are seriously looking at renting out a room in our house in the next few months – I may shoot you an email to ask you a few questions since you have experience!




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  15. Hey Crystal: Sorry to hear about the crap with Google. I’m been a tad jealous of your income :), but I know you’ve worked darned hard to earn it. Sounds like you’ve got a good plan, and plenty of options to figure out how to keep yourself going!




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  16. Having your spending plan laid out with all of your expenses is a good idea. My budget is not quite as large as yours. My monthly income is less, and the wife and I are on less expensive cell phone plans. Why do you have U-verse and DSL? Is one for a backup connection? U-Verse isn’t available where I live, only DSL.




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  17. Wow, I noticed no more reports and knew it was because of the Google smack, but to think you got reported along the way. Nuts, that sucks. Anyway, glad to read you have a plan. I thought of you this past month. Best of luck adapting and creating a new normal, bigger and better than before.




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