I have a number of debts I need to kill off this year.
Some debts can be recycled month by month (such as credit card debt being used to pay for backdated bills). Others are not coming back to you, no matter what you do.
One of these that I have to pay off now is Iwoca, as they stopped renewing my rolling overdraft. It was good at the time, and allowed me to get a lot of stock in for my store. However, the stock didn’t sell as fast as I’d hope – and when I went to renew the terms with them, they refused.
The pros of Iwoca are many:
Easy cash to help with business flow
Very simple and quick approval for your business
You can repay your loan at any time, so if you need money to bridge you over for a couple of days, it’s ideal.
The cons of Iwoca are:
They can retract their offer at any time, and instead of being a rolling overdraft, you’re left with a standard loan.
The interest rate can be hefty if you take a loan over a long period.
If you make a big payment in error, they’ll take it to pay off the loan instead of refunding you.
I started freelancing seriously at the end of 2019. I have about five clients already, but the work isn’t regular and I’ve already finished most of their projects for them. Reaching out to multiple clients has left me with a lot of names to remember and a lot of projects to keep track of, so I’ve set up a CRM system.
I’m using Dolibarr 10.0.5 which I installed through the Softalicious Installer. So far it’s helping me keep track of my prospects and exisiting client, and remindng me when to chase up on leads. I looked at a number of paid and free solutions before deciding on this one, a close contender was Flowlu, however I am not currently earning enough from my freelance work to justify it at this point.
I am still getting used to Dolibarr but so far it’s proved perfect for what I needed it to do. It also has billing and financial tracking capabilities – I use alternative solutions for this at the moment, but will see how easy these are to integrate later in the year.
To put it mildly, I’m in debt. I paid for a full refurbishment on my house this year, which is still underway – and getting hit with depression and having to take three months off work at the end of 2019 threw my credit score into chaos. I’ve applied for PIP and get other benefits whilst I’m not making an income – but I’m slowly establishing myself as a freelancer and hoping to follow that path going forward in 2020.
The first thing I will do is apply for the New Enterprise Allowance scheme. I’m currently not allowed to do that as I’m still signed off sick, but it will provide me with a helpful boost to establish my business. Then I have to make sure I am meeting the financial goals I set for myself every month.
I believe the way I plan my goals may prove helpful to others who have irregular income, so I’m sharing it here.
My blueprint for Personal Financial Planning in 2020
1. Work out your essential outgoings
First, there’s the essential outgoings: Gas and electric: £170 Water: £30 Internet & telephone: £65 Mobile: £30 Repayments to debtors (repayment plan): £5 Website hosting: £20
Essential outgoings are £320 a month, or £3,840 a year.
2. Work out your non-essential but highly desirable outgoings
Then there’s the non-essential, but still useful outgoings for work and pleasure: Car repayments: £440 Spotify: £5 Diesel: £25
Semi-essential outgoing are £470 a month, or £5,640 a year.
3. Work out your habitual spending and base lifestyle outgoings
I drink a lot of Red Bull and I smoke cigarettes. Neither of these are cheap habits, but they are very much a part of being me, for now. Let’s say I smoke 15,000 cigarettes and drink 2,200 cans of Red Bull a year. That’s 1,250 cigarettes a month and 183 cans of Red Bull a month.
I buy my cans of Red Bull in packs of 24 and I buy my cigarettes in packs of 200. So that’s roughly 8 packs of Red Bull and 6 cartons of cigarettes.
I can make huge savings on cigarettes by travelling to buy them, but let’s not work that into the equation for simplicity’s sake at this point.
Total habitual spending is around £840 a month, or £10,000 a year
4. Work out your minimal food spend a year.
I know for others it will be much less than this, but the minimum amount I need for food is £5 a day. That’s a meal deal at a supermarket, or an offer at a local bar. I don’t cook often at the moment as the kitchen isn’t finished, but I will be able to reduce that later in the year. For now, my minimal food spend is £5 day, which is approximately £150 a month.
Total minimal food spend £150 a month, or £1,800 a year.
5. Work out your actual food spend a year.
In reality, I survive on take outs at the moment, and my actual food spend is more in the region of £15 a day. The idea of this plan is to compare the reality of your spending to the actuals and ideals. Don’t by shy with this figure, food is as essential to live as heating and water, so budget it in.
Actual food spend a month is around £450 a month, or £5,500 a year.
6. Using the figures above, work out what you need to make for each scenario.
The Essential Bucket
To pay your bills and to survive on a bare minimum is Figure 1 + Figure 4. In my case, that’s £320 + £150 = £470 a month, or £5,640 a year. This is the amount of credit you want to make available to yourself at ALL TIMES throughout the year. By credit, I mean, cleared debt off credit cards that aren’t going to reduce your limit, overdraft availability – you want to make sure you have the means available to cover your bare minimal essentials as a priority going forward. What if you don’t have that amount available? That’s the amount you’re going to work to make available to yourself at the start of the year – it’s a bucket you can dip in and out of when you have guaranteed pay arriving but not at any other time.
The first £470 made in any month should go into the essential bucket. Anything extra after filling the The Life Bucket should go into The Essential Bucket until the bucket is full (£5,640) for the year.
The Desirable Bucket
This figure is the Essential Bucket + Figure 2. This will cover all your essentials plus the highly desirable outgoings. Sure, I could survive without a car, and I could certainly survive without Spotify, but they do add to my quality of life – and having a car saves me a lot of time on public transport, that I can spend working instead.
The Essential Bucket is £470 a month, and the highly desirable outgoins are a further £470 a month. The second £470 made in any month should go into the The Desirable Bucket, to ensure that you have the desirable things that make your life easier and give it quality. Therefore the first £940 I make in a month is accounted for and bucketed. It is only earnings above this I get to spend on habitual and “lazy” compromises.
The Life Bucket
My Life Bucket is Figure 1 + Figure 2 + Figure 3 + Figure 5. It’s the amount you need to earn to maintain the lifestyle you currently have. In my case that is £320 + £470 + £660 + £450 = £1,900 a month.
If I were to get a full time job not working from home, the salary I would need to meet My Life Bucket would be £30K. Add on £5K for the inconvenience and extra cost of travel. A job in that salary range would be easily in my reach, indeed, I tend to go for jobs that pay three times that amount – but the quest here is to work for myself, during hours I choose, and not to go back to the every day grind.
Therefore my initial aim is £1,900 a month, or in dollars $2,500 a month.
7. Work out how you’re going to fill the life bucket.
With a rough aim of $625 a week, I need to split this evenly through my businesses. I believe I can make $400 a week from freelance work, and will aim to make up the rest in sales through Amazon FBA and the other income streams I’ll be establishing throughout the year. It’s not going to be easy, but by focusing on a figure to get started, I can keep track of where I’m at. The ultimate aim, of course, is to make $100K this year, and if not this year, then the following year, etc. Ths guide to managing my finances in the meantime is a blueprint that I hope is easy enough for anyone to follow to manage their personal finances in the year to come.
I barely watched any television in 2019. My one ‘half-an-hour habit’, watching Hollyoaks, went by the wayside. So, my TV was switched off for most of the year, apart from the occasional Netflix & Chill night, which consisted more of not finding anything worth watching on Netflix that didn’t take up copious amounts of my productive life and resulting to watching a film from Amazon Prime instead.
The first things I’ve done to stop wasting money in 2020 is cancelled my Netflix subscription. Why pay for something I barely use? Whereas Amazon Prime video is an add-on to a service I use regularly, Netflix just sits there untouhed unless i have company.
The second thing I’ve done is start to watch Hollyoaks again. Not daily, I’m a year behind on the plotline, but catching up from where I left off in 2019.
Hollyoaks is mindless entertainment. But it’s fun, it has comedy moments, and the characters are well developed. Without Hollyoaks I’d literally spend every waking hour in front of a screen working, and that isn’t healthy. Sometimes you brain needs to take in some mindless, harmless entertainment to reach its full potential. Whatever your mindless habit is, try picking it back up again in 2020 – it may do you more good than harm.
If you don’t have a method to keep your resolutions, you’re likely to let them go by the wayside. I read an amazing book last year, Atomic Habits, by James Clear, which was a lifechanger for me. He outlined four ways to start building good habits along with other numerous tips to kickstart a better life. I can’t recommend the book highly enough to anyone who wants to keep their new year’s resolutions.
After reading it, I’ve become a lot more ambitious with my own resolutions this year – I think this book has given me a great guide and blueprint on how to achieve the things I want to.
1. Make your New Year’s Resolution Attractive.
2. Make your New Year’s Resolution Obvious.
3. Make your New Year’s Resolution Satisfying.
4. Make your New Year’s Resolution Easy.
Here’s a selection of my New Year’s Resolutions and how I intend to keep them this year!
Around the house
1. Turn off electric items when they’re not being used
Get Alexa or your home system to check in with you on this, and let Alexa turn things off for you! I’m particularly bad at turning off my computer at night before I go to bed, and something I need to get on top of. Thanks to technology, you can have a constant check-in – be that by your phone, or by email, or by other reminders you leave yourself.
2. Keep the heating down
Again, Alexa can keep control of this if you have the right installation. I have to keep my room at a certain temperature at all times due to my tortoise (who is being over-wintered), but there are still times I can turn the heating off entirely for a few hours and save some pennies.
Diet and exercise
3. Less delivery takeaways
By Habit Stacking, I will set up a routine where I go to the supermarket directly after seeing my mother. This should cut the amount of home delivery takeaways I get by half.
4. Start going to a gym
Whilst it’s tempting to rush into this on January 1st, I’ll leave it until later in the month. Starting on the 1st January sets yourself up for failiure, as everyone else will be expecting you to fail. In a few weeks, once I have the essentials covered through my freelance work, I will start to look at gym memberships.
Finance and work
5. Pay off the credit cards each month
Credit can be reused and recycled to pay off the bills if needed, so don’t be scared about using the money you have to pay off the cards each month (unless you’re worried that they’ll cut your credit limit for whatever reason). The aim is to put less and less on the credit cards each month, until eventually you have no credit card balance outstandng.
6. Don’t worry so much about work.
Whilst keeping to targets and making the minimum amount to survive is essential, don’t sweat it so much when you’re past the target. Despite having my personal goal, I’ll worry less about getting things done this year and make some more room for fun.
This week I will mainly focus on getting my dropshipping goods uploaded to Amazon and Ebay. I’ve always had the option of dropshipping, but never felt disciplined enough to check the orders every day and forward them to my suppliers. Now, however, I am ready to take on this challenge: it will cut the amount of stock I have to keep at home, and allow me to provide a better range of goods.
The first step involves downloading the supplier’s spreadsheet. Then, I work out which goods will make me at least $7.50 per sale – after tax, after shipping, after Amazon or Ebay commission and after processing fees. I’ll do this by creating a series of calculations in Excel. Once I’ve decided which items are viable for dropshipping I need to transfer these to the Product Upload template from Amazon, with descriptions and bullet points. Finally I will transfer the spreadsheet to an Ebay uploader.
I had toyed with the idea of setting up a Magento website with M2E pro, but the amount of time it would take me to do that would be more than if I just created the spreadsheet directly. I will set up an online store away from Amazon and Ebay soon, but it isn’t my priority.
Following that, I need to start getting the stock I still have in my house out to the FBA warehouse. It’s going to be a long job, which may take me most of January, but I know I’ll be relieved to have my house back again.
I’m one for making big resolutions at the start of the year and never carrying through with them. For example, I could resolve to update this blog daily – but I know I won’t. However, I am using it as a way to keep myself accountable, and I hope to provide others with the inspiration to follow through on their goals in the 2020s, too.
My main aim this year is to make $100K working for myself. Everything else will pale into insignificance, probably, as I’ll be so flat out working, I may not find the time to rest. This blog is also here for me to share my goals for a given week; report on whether I’ve kept on track, whether I’m stressed and doing too much, and as a means to organize my thoughts. It’s no lie when I tell you I have 6 businesses on the go, and I’m not devoting enough time or energy to any of them. My aim this year is to balance them all and stop neglecting the ones that have slipped through the net.
Even with that goal in mind, I have to be careful not to allow the simple joys of life pass me by. I have to make time for my friends and family, get out in nature, exercise and look after my mental health.
2020 is a reset year for everyone. A time to start again. A time to welcome a new decade and to let go of the drama and misery that may have haunted you before. Whatever your new year’s resolutions are for 2020, I wish you luck, and hope my blog provides some inspiration along the way.