Create A Working Budget (and Stick to It!)
Life can get pretty hectic. And let’s face it; working from home can be like having two round-the-clock jobs (as work and family are no longer separate, but inexplicably melded in a web of interlinking activities). When you’re squeezing in trips to the grocery store and dropping the kids off at practice between editing files and meeting deadlines, it’s only natural that a few things will slip through the cracks. That’s when you start getting calls from the bank to notify you that your account is overdrawn (you were sure you remembered to deposit that check before you mailed your mortgage payment…nope, there it is under a stack of mail). In any case, keeping track of your wayward finances can sometimes end up being the last item on a long list of to-dos that never seem to get done. However, taking a little time out of your busy schedule to create a budget may relieve a lot of the pressure on you to constantly keep track of which money goes where (so you can focus instead on your work and your family).
The first thing you’ll need to do is sit down and chart your income and expenditures. This can become a bit complicated, especially if you have multiple clients who pay you separately. You may also have a large number on monthly bills in addition to those that occur on a yearly, biannual, or quarterly basis (such as insurance and taxes). Regardless of the simplicity or complexity of your payment structure, you should probably think about streamlining the process. In terms of receiving monies owed for services rendered, consider setting up a PayPal account (if you don’t already have one) and requesting all of your clients to pay you through their portal. Sure, you have to pay a small fee for each transaction, but considering the fact that you can deposit money directly into your bank account at the click of a button, the ease of use may be worth the additional expense.
As for outgoing money, you can set up a monthly bill-pay through most banks that will allow you to handle your finances online. For bills that don’t fluctuate from month to month, like your mortgage, HOA, or trash pick-up, you can simply select the auto-payment option so you don’t even have to think about it. For expenditures that differ every month, you can simply transfer the funds electronically when the bill shows up. No wasted paper, no need for stamps. What could be easier? As for items like taxes and insurance payments (that come infrequently but demand a large chunk of change), break down what a monthly payment would amount to and set aside that money in a savings account. Then when you need the cash, it will be readily available. You may also want to set aside a rainy-day fund for unexpected medical expenses or a lean work-week.
One last bit of advice: don’t forget to budget for fun. Sure, it seems like all your money is gone by the end of the month (that’s why you need to track your finances in the first place). But you should make sure that your life doesn’t turn into the “all work and no play” scenario. If you deprive yourself of the little things that make life worthwhile (a grande mocha now and then, or a new pair of sandals), you are almost certain to go a little nuts at some point and overspend (probably to the tune of buyer’s remorse). So make sure you factor in a little fun money to enjoy the benefits of your hard work and have a better chance of sticking to your budget.
Jennifer Kardish is a writer for Online PhD where you can browse the top PhD programs.
Image source: womenwithmoneymoxie.com