Once upon a time I had a “real” job. Meaning I showed up at a more-or-less set time and left at a more-or-less set time, every day of the week, year in, year out. Highly predictable.In trade for that, at the end of each month, a certain sum of money would be written to my bank account. Highly predictable.
As a freelancer I get money when I work. And when there is no work, there is no money. Luckily when I do have work, I earn enough to save up for the times when there is nothing to do (up to a point of course). The amount of work is unpredictable and thus the money coming in is unpredictable.
Outflow however is much easier to adjust. Cooking at home and not buying any new clothes unless absolutely necessary will make the same Euro last a whole lot longer than weekly dinners in town and shopping sprees.
With a fixed pay-check it’s easy. You get in X, you spend X (including some savings (hopefully).
With variable income, I need to think about what my monthly budget is. Which is related to how much time I expect to have between assignments. Should I expect to have a month of sitting on my hands for every month I work? Or is it one month in between all assignments no matter how long the assignment was? Should three months of pay last me six months or four months?
I know it is very difficult to get used to having less, whereas it is very easy to get used to having more. As soon as I start spending more, expecting that assignments will keep coming, I will have great difficulty scaling back if push ever does come to shove. And spending less now is also difficult, because I got used to my current level of luxury (with some occasional new clothes and going out for dinner once and awhile).
I’m not giving up anything, I seem to be building up a bit of a buffer. And if I really do need to cut back, there is still enough slack to do just that.
Going on a shopping spree can be very tempting…