The Financial Adventure of Team Jonny
Poor Jonny. He’s always on the receiving end of my quirky ideas, yet he welcomes them with open arms and helps me execute them. Our willing accomplice in this adventure? Our laid-back 16-year-old daughter. Though she has her limits, she’s generally adaptable. This time, I devised a new scheme for our family trio—a month-long endeavor where we would focus on boosting our income while trimming our expenses. I like to call it a Financial Reset!
Why embark on this journey? With the prevailing economic clouds hanging over us, it’s easy to feel like a victim of circumstance. While I’m generally a glass-half-full person, I too can feel weighed down by the financial buzzkill. Instead of succumbing to despair, I prefer to seize the reins of our financial narrative. After carefully analyzing our spending and income, I realized that life has indeed gotten pricier, but we are still treading water just fine. However, I wanted to dive deeper into our financial waters to discern between rising costs like food and utility bills, and lifestyle inflation. There's no point in berating the cost-of-living crisis if my budget is ballooning merely because of spontaneous holidays and impulse purchases.
Yet, our spending is just one side of the coin. While we can cut back, our earning potential is limitless. So, for July 2024, we decided to channel our energy into earning more cash while also slashing our expenditures. Let’s take a look at how this grand plan unfolded, shall we? Fingers crossed our teenager doesn't have a meltdown!
Communicating the Plan
As we have a teenager at home, I felt it was essential to explain our intentions thoroughly—lessons about money can be invaluable during these formative years. I didn’t want her to mistake our frugal approach for a penny-pinching lifestyle devoid of fun! We made it clear that we’re financially stable and merely curious about the arithmetic of our income and spending. Armed with PocketSmith, I had been nudging her to track her own finances and she grasped the rationale behind our month of financial focus. Plus, since she now earns her own money, I reassured her that if she felt deprived, she could buy whatever missing items she wanted!
The Art of Saying "No"
In the spirit of our challenge, I presented my family with the concept only days before July began. Thanks to some inspiration I gleaned from my financial insights, it was time to stretch the gap between what we earn and what we spend. We had a few commitments for the month that we already saved up for, but for everything else, it was a unanimous “NO.”
Should we indulge in a lunch out? NO. How about stocking up on discounted cat food? NO. Should we test the new gondola rides in Queenstown? No again! “NO” became our new mantra, as “maybe” just led to too many grey areas. The beauty of deciding firmly eliminated all doubt, and remarkably, we maintained our happiness while discovering enjoyable ways to spend without breaking the bank. July turned into a month of resourcefulness, and we survived with flying colors!
Discovering Insights Through Restraint
This financial reset was a golden opportunity for anyone seeking to realign their finances. By saying NO for a month, we laid a benchmark for our spending habits, revealing the gulf between our earnings and expenses. The wider that gap, the more we can save for debt repayment or, as we prefer, investing in ETFs. A reset month teaches us valuable lessons about our financial patterns.
Although, I must admit that I might not have picked the most opportune month for this venture—July’s winter chill brought the highest heating costs as we battled freezing temperatures. Our electricity and diesel expenses skyrocketed to $860 this July compared to just $481 in the previous year. We also faced unplanned costs like the school formal and vehicle repairs. Despite these challenges, we managed to cut back in several areas.
Strategies for Cutting Costs
We remained conscious of our regular expenses, but it was the daily impulse spending that needed curbing. Instead of shopping for leisure, we focused solely on acquiring necessary items. Our pantry and freezer became treasure troves as we minimized grocery expenses by using up what we already had, which also helped organize my kitchen!
No more snacks or coffee runs at work! I felt a bit guilty for not supporting my local café, but sacrifices were necessary. We reassessed subscriptions that weren’t essential, temporarily turning off heating in less-used rooms during the day. We even opted for walking instead of driving wherever possible, which was also an environmentally friendly choice.
And a grocery miracle occurred—we switched from our habitual supermarket to explore deals and loyalty programs, spending under $1,000 for the first time in years. Yes, a delightful achievement!
Transforming Ideas into Earnings
Boosting income was where I was most eager to see results! While it’s straightforward to cut expenses, creating additional income holds far more possibilities. We started with selling unused items, turning clutter into cash while also decluttering our home. I found joy in giving away items to charity or neighbors, although it took some effort. There’s something heartwarming about finding a new home for something you no longer need.
Both Jonny and I said YES to picking up extra hours at work—this modest effort amplified our earnings! Jonny also tackled freelance graphic design projects, though at reduced rates. Additionally, I sought collaborations for my blog, but faced various challenges in securing meaningful partnerships due to integrity concerns.
Nonetheless, kindness also paid off in surprising ways! We dog-sat for a friend, receiving heartfelt tokens of appreciation, including a $250 gift card. Small gestures like receiving honey from family friends and sharing drinks during social gatherings illuminated the generosity that often circulates in our community.
Thriving Socially on a Budget
Despite tightening our financial belts, we maintained a vibrant social life. I relished a new book gifted by a reader that kept me warm through winter. Catching up with friends became even more meaningful, with dinners and quick catch-ups on our runs or walks. We didn’t isolate ourselves; in fact, we were more connected than ever!
The Numbers Speak
At the end of this excursion, the numbers surprised us. Using PocketSmith for meticulous tracking, we tallied up our expenses and income to reveal the following: Expenses totaled $7,100, but our income reached an impressive $8,900 (after tax)—much higher than we anticipated! For context, our average monthly gap between earnings and spending usually hovers around $1,800. This time we exceeded expectations: we spent $2,700 less than usual and earned $600 more, resulting in a jaw-dropping $5,100 gap. Yes, a 53% investing rate—total win!
Reflecting on the Journey
While I hoped for even greater earnings, I recognize that endeavors like this take time and patience. It’s vital to accept the ebb and flow of income, especially when relying on part-time jobs and irregular freelance income. Surprisingly, this reset month proved to be an enormous success! With a renewed perspective on both spending and earning, we’ll carry these lessons forward, setting the stage for potential future financial resets.
As I wrap up this experience, I’m reminded of a powerful statement from a blog I recently read: “Just tweaking your lifestyle to be slightly less ridiculous and more efficient than average is usually all it takes.” With that thought, let’s continue to invest wisely and save generously!
