Every year, I take the time to review the past year and look forward to the new year. I set a variety of different types of goals, including financial goals. In many recent years, those financial goals have been ambitious. However, this year I have to go back to the basics.
Overarching Goal: Earn More Than I Spend
This is the most obvious rule of thumb when it comes to money. Having been working on my personal finances for a couple of decades now, it’s something I’ve been aware of for years. And yet, I find myself in the position of having to recommit to this back to the basics financial goal.
How I Ended Up Here
Quite a few things conspired in the past couple of years to land me in this place. I have to go back to the basics and focus on earning more than I spend for a few key reasons:
- Due to a series of health issues over the past couple of years, I cut back on much of my work. Therefore, my income dropped.
- Then the coronavirus happened, and many of my clients had to cut back themselves. Therefore, my income dropped even more.
- And yet, my spending was high. That’s in large part due to the fact that I had accrued significant medical and business debt in recent years. Paying that off meant huge chunks of money going out each month.
I did scale back the spending by restructuring my debt. And a lucky real estate sale helped a lot this year. But now it’s time to get back on track and back to the basics.
Part 1: Spending Less
Step one is spending less. I’m going to do this in all of the obvious ways:
- Review my budget. Adjust it. Stick to it.
- Set short-term and long-term financial goals for the year. Review them monthly.
- Look for ways to cut back on the little things that have added up a lot this year.
- Review my debt again. See if I can do more to either restructure it or pay it off quickly. I don’t want this to continue hanging over my head.
- Make conscious spending a key part of my every day life. Reading books, listening to podcasts, and consistently reviewing the basics of personal finance will help.
Part 2: Earning More
Step two is getting back to earning more. Despite awareness of ways to cut back, I simply do have a lot of outstanding debt. And I live in an expensive city. And my values require that I spend more on things than other people might (ethically sourced food for my pets, for example). So, I do need to earn more. Here’s the plan:
- Review current earnings with a careful eye. Am I getting enough from each client to make the work worth the time?
- Increase rates with existing clients were appropriate. Increase base rates for any new clients.
- Ask my best clients if they have more work for me this year. Make myself available.
- Start doing regular searches for new clients interested in my writing services.
- Get back on top of a few longer-term writing projects that I had set aside when I got ill. They may not pay off right away but they’ll help in the long run.
It’s a little embarrassing to have fallen so far down on the financial ladder. But it happens. Life happens. And the solution is to get back to the basics. I’ve climbed up from debt before and I can do it again.
What are your 2021 financial goals?
- Frugal Facebook Groups to Follow
- Bitcoin Basics: How Much Does It Cost to Buy Bitcoin?
- Here Are The Best Early Retirement Blogs
Kathryn Vercillo is a professional writer who loves to live a balanced life. She appreciates a good work-life balance. She enjoys balance in her relationships and has worked hard to learn how to balance her finances to allow for a balanced life overall. Although she’s only blonde some of the time, she’s always striving for total balance. She’s excited to share what she’s learned with you and to discover more together along the way.