January flew by faster than I expected, but at the same time I don’t feel unproductive. It’s been energizing to get back into the swing of things and actually be doing stuff (yes, that’s a technical term) after spending the last two months of 2014 introspecting (also a technical term) and mapping out 2015. And since working for yourself can be a bit isolating and insular, I’ve taken to blogging and tweeting to help reinforce some personal accountability. To that end, here’s a recap of how my month went in regards to my two big annual priorities: the Year of Writing and the Year of Debt Reduction.
Writing, Writing, Writing
Let’s just put a big, fat, inky checkmark on writing in January. I was thoroughly impressed with my ability to write so much across so many different channels. In fact, I would say that splitting my time between different subject matter has really helped balance my interests and keep any one topic from getting boring or tedious.
I created a 2015 Writing Log with a quick and dirty spreadsheet so I could track my progress by date posted, title of the piece, word count, and which channel(s) through which the piece was published. And of course at the bottom there's a sum total for the word count. Here’s how I fared:
- 14 articles published
- 6 published to Built
- 4 published to Voiced
- 4 published to Maker’s Nation
- 7 cross-published to Medium
- 20,036 words written
My most popular piece was Going Public: Tough Love for Unhappy Etsy Sellers, which gained lot of social sharing from Maker’s Nation followers and a tremendous amount of visibility, recommendations, and social sharing through the cross-post on Medium.
I am immensely pleased with what I was able to accomplish on the writing front this month, and over the moon that some of my pieces were so well-received. It gives me the motivation to keep publishing going forward, and even though I intentionally didn’t set any specific word count goals (remember, it’s all about the big-picture theme for me), crossing the 20,000-word mark makes me proud of myself. More writing!
De-Debting with a Bang
I reconciled all of my income and expenses at the end of the month with my handy budget spreadsheet (I like spreadsheets), and I have to be honest that there were quite a few expenses that were unbudgeted. Even though my actual income was higher than estimated (yay!), a failing external hard drive, a much more comfortable desk chair, and a handful of other discretionary purchases led me about $800 over budget (boo!). That said, I made a huge leap forward in reducing my debt.
"What did you do?" I can hear you asking. Well, I did what nearly every financial advisor would suggest is a bad idea, and Dad, if you’re reading this, just bear with me. In my earlier post about financial transparency I divulged that I had just over $9,000 in retirement savings from the 403B account (the equivalent of a 401K for educational institutions) I had when I was employed full-time. I made the decision to withdraw all of that money, minus 20% withholding for federal taxes, and apply nearly all of it to my credit cards and student loans.
In the span of the first two weeks of the year, I paid off $3,073 in credit cards and settled one of my seven student loans at $2,239. Now I can hear you asking, “Why would you do that? What are you going to do about retirement? Set it and forget it!” I hear you loud and clear, and rest assured this was a decision I did not make lightly. Here are the arguments that fueled that decision:
- If you look at my existing retirement account, to which I haven’t been contributing anything further, and assume a 5% annual rate of return, I would end up with about $45,000 in my account once I turn 65. If you account for taxes (all contributions thus far were pre-tax), that leaves me about one year’s worth of my current annual income. Knowing that I still need to save a lot of money to prepare for this thing called retirement, this $9,000 isn’t worth a whole lot.
- My biggest credit card comes with a hefty 26.99% interest rate (a vestige of my bad credit days) and at the start of the year carried a balance of $2,100. If I held that balance and made the minimum payment, it would take me 47 months to pay off completely and I would end up paying over $6,000 in interest on top of that. By paying this off, saying I’d save a bundle in interest is an understatement.
- By eliminating one entire student loan balance and my minimum credit card payments, I would free up $150 in monthly expenses that could be devoted to further debt reduction and/or savings.
I’ve set aside the remainder of the money from that withdrawal to help offset my 2014 tax bill, for which I planned very poorly by making some poor financial decisions last year. When all is said and done, I feel confident about being able to make so much headway and my year-end $25,700 of loans and credit cards dropped to $20,300. I know that my progress for the rest of the year will be much slower (no other nest eggs to squander), but if I stay on track with my budgeting and setting aside my surplus money at the end of each month, I’ll be able to whittle it down any more. My credit score has been improving as a result, but I won’t know the full effects until the first of March rolls around and reflects all the account updates.
And you know how I crossed the 20,000-word line this month? Next month I’m itching to knock just enough off to get below $20,000 in debt. It’s the little things, really.
I've long tracked the hours I work through an online app called Harvest, and aside from making it easy to send invoices, it's hugely helpful in keeping me focused on the task at hand and not getting distracted when I'm "on the clock." If you follow me on Twitter you may have noticed some tweets lately with work reports at the end of the day or week. This was something I did last summer for a while as I needed to hold myself more accountable to the work I was doing, and I've found it helpful to do again.
I won't bore you with the daily or weekly minutiae, but here's my report for the month of January:
- Total hours: 139.59
- Billable: 52.76 (37.8%)
- Pro Bono: 52.17 (37.4%)
- Deferred*: 2.99 (2.1%)
Overall, I worked 79.3% as much as someone who puts 8 hours a day into their Monday through Friday job. In many ways the "40 hours per week" principle does't directly relate to how productive we are, but I usually shoot for logging 32–36 hours of work each week. This puts me right on the low end of that range. I'd call that pretty good, considering how accomplished I feel. Keep in mind as well that I have an unusually high amount of pro bono work since everything I do for Maker's Nation is on a volunteer basis.
To sum up: I wrote a lot, paid down a chunk of debt, and worked a decent amount. I'd say January ended with some very positive outcomes, and I'm anxious to see what February has in store!
* Deferred income is not directly billable, but pays out upon the project's completion (e.g. through equity, bonus, etc.)
What progress have you made on your own annual priorities or goals? Did January fly by as quickly for you as it did for me? Want to chastise me for my financial decisions?