The work I do as a conference administrator for local government is on a freelance basis, so I find out week to week how much work I’ll be doing. Generally the work is fairly steady, but there are some weeks where there are a ton of conferences booked and I’m working like a mad woman, and there are weeks where there are hardly any conferences, so by the time the ones available are shared around the team, there might be little or no work for me for the week. All of this means that my pay can vary a lot from month to month.
I was recently talking to a colleague, working in a different role, who said that she could never work freelance because it required too much budgeting and organisation compared to being a permanent member of staff. You had to be prepared for those times when there was no work, or when you were taking annual leave or sick leave and would not get paid. Yes, so true, I nodded in agreement, but in my head alarm bells were starting to ring. I was a freelance worker, and my ‘budgeting’ consisted of spending what I earned and throwing my bank statements in a shoe box to deal with later. Of course, these alarm bells were not enough to actually spur me into action to start budgeting.
I’ve never really done a budget. They were one of those things that seemed like a good idea in theory, but that is exactly what they remained to me – a theory, not something I put into practice. I remember when I got my first job out of university, and the transition to getting fortnightly pay checks compared to the weekly payments I got from my student loan was a bit of a shock to the system. I would always manage, but that last weekend before the next pay always seemed like a fairly lean time. I remember being relieved that I was not getting paid monthly like a lot of my friends. The idea of only being paid 12 times a year was too depressing.
Now being freelance, I always knew that some budgeting and balancing would be required, but for some reason I never got around to actually doing anything specific. I would make attempts at it, such as downloading a budget spreadsheet and fillings bits of it in, but I never really knew how much to allow myself for all those extracurricular activities. It was also difficult to know how much I was earning as well, as it varied from month to month. It all seemed like too much work and I just never liked the idea of going back over my monthly bank statements to see where I spent my money. I’ve now realised that really it was just another way I was living unconsciously. I didn’t want to know too much. It was much nicer living in my little bubble where I just spent what I earn.
I don’t want to paint a picture of myself as being completely financially irresponsible. I have always paid my rent and my bills, I have always paid my credit card off in full every month, I joined the superannuation scheme at my old work and managed to save quite a bit to put towards my student loan. Despite this, I still feel like there was a lack of awareness about my spending sometimes. Just like with my eating, there were times when I would go on a bit of a spending binge. I would try to hide the evidence of a binge on food, throwing out the leftovers, stuffing the packaging deep in the trash, and I would do the same with my spending. I would ignore the bank statements and would try to think of something else whenever the thought flashed in my mind that I really should be saving. I would sometimes conceal the telltale shopping bags and would always mark down the price of items when someone asked me how much I had spent.
Yesterday I found out that there might not be much work available at the end of August. While I know I’ll work things out and will be able to pay my rent and bills and will have enough to eat, it gave me the push I needed to take responsibility for my spending. I need to be conscious of how much I spend and what I spend it on. And I need to make better choices.
I phoned a friend today who I think of as a bit of a budgeting guru. When we were flatting together she had a detailed spreadsheet of her spending, and when I moved to London and asked her to give me a rough idea of how much her living costs were, she sent me an itemised breakdown of all her costs per month. This was a woman who was conscious of what she spent. My friend gave me some good advice, but most of it boiled down to being more aware of how much you spend, what you spend it on and to a certain extent forecasting what you will spend in the future. She also said that I should develop an ‘emergency fund’, which for me could come in handy when work thins out, but could also be used if I needed to go to the dentist urgently or some such. My friend also told me that despite having this elaborate budget, it did not mean that she always stuck to it, but at least she knew what she was spending.
All of this is pretty sensible and pretty obvious in a way, but it’s been easy for me to ignore it or not priortise it, until I really had to. While I’ve done a lot of work this year about living more consciously in relation to being aware of my feelings, being aware of my body and being aware of what I’m eating, I have neglected being aware of my spending. My plan for the next week is to start looking over those bank statements in the shoe box and then try and work out a realistic budget for the future, prioritising developing an emergency fund. Second priority will be developing my discretionary savings account aka the Ibiza fund, as I hope to go somewhere more exciting than the dentist this year.