I’m a freelancer and I save $800 a month, Money News
When Covid-19 straightened its deadly head like many other Singaporeans earlier this year, I lost my job. Shortly after global bans began closing airports around the world, I was fired from my position with a travel company in April.
When I was forced to leave a project that was essentially my idea, it was a big blow.
But what took away some of the sting was that I had an immediate backup plan. Freelance writing (which I’ve done over and over again since 2018) would now be my main source of income.
The only problem was that my income was now about 40 percent lower.
How should I meet my financial obligations – reduce debts, save up to a home renovation and lay the foundations for my future nest egg for retirement?
I realized that I had to split a dollar in two, which could only be done with a magic wand.
Since I didn’t have one, I had to make some drastic changes, and quickly.
Immediate savings as a result
Yeah, it sucks when you withdraw. Getting stuck at home over a circuit breaker sucks too. But the good thing is, I could start saving money right away.
If I don’t have to get out every day, there are several ways I can save money.
First, I no longer have to commute to work, which helps me save around $ 100 each month in transportation costs.
I also no longer have to pay for work clothes laundry and save an additional $ 100 every month.
When I think about it, I won’t really have to buy new work / evening wear in the time to come, given the situation I am staying in at home. Simple shopping budget saved there!
The only thing I didn’t want to give up was my daily supplements.
But I did – I stopped buying vitamins that I thought needed to maintain my performance and energy, and easily saved myself another $ 50 a month.
Side note – a blood test for a health exam later found they weren’t working for me anyway.
Without months of film plans, coffee meetings, bubble tea runs, and Shake Shack Fridays, I saved a cool $ 200 at the end of the month.
Fight against the essentials, debt and insurance problems
While I was able to reduce my discretionary / leisure expenses, other important things like groceries, utilities, insurance premiums, and mortgage payments continued to have to be paid.
There is no way to get a handle on this, and that’s where my worries came from. How should I pay for the bare minimum without a steady stream of income?
I also had to keep up with monthly personal loan payments while paying off credit card balances. And this piece was particularly worrying.
A combination of bad decisions in the past, recklessness, and bad timing had resulted in my coughing up around $ 1,500 in debt payments every month, with $ 1,000 used only to cover minimum payments.
This started to keep me up at night.
I had worked out a two-year plan to pay off my debts in full, but that was clearly out the window now. I had to do something about my interest payments.
Finding savings where there weren’t any
Fortunately, I learned about the Special Finance Relief Program (SFRP), which was set up to help Covid-19-affected Singaporeans cope with their debt obligations.
Under this program, you can apply for special arrangements to restructure your debt or reduce payments on a range of debt arrangements.
However, they would have to meet the qualification criteria, which primarily include a loss of income of more than 25 percent.
In my case, I could convert my credit card balances at 5 percent per year into term loans, which is a massive reduction given the average credit card interest rate of around 29 percent per year.
Thanks to the SFRP, I’ve been able to cut my debt payments by around $ 500 every month!
Find a steady source of income
So far, I’ve cut my monthly expenses by about $ 950 per month, but that’s about as far as I could go.
I knew reducing my expenses was only one side of the coin. The other side was to increase my income.
This is vital as I have two other major financial goals on hold for now – saving up for an increasingly urgent home renovation and investing in growing my nest egg.
These are particularly important goals for me, but with my current income stream, I don’t have the resources for them.
Also, like everyone else, I die after a vacation as soon as the vacation trip reopens (whenever that may be).
I thought the only way to move on was to find ways to increase my income so I could have the money for all of these plans.
I could do that either by expanding my client list and getting more freelance work, or by getting back to a full-time job.
Make the best of a bad situation
What started out as one of my worst setbacks eventually turned into a pretty decent situation for me.
By adjusting my plans, cutting back on my expenses, looking for savings, and luckily by maintaining a constant freelance work, I’ve saved an average of $ 800 per month (pretty big deal if you’re on a payroll).
As I continue to work to increase my income, I can provide timely funding for my plans.
But more importantly, I know this could be the starting point for me to develop my freelance appearance into a full-time, thriving career, and whatever adventure may come with it!
The road is less busy
I am completely honest with you now The idea of flying alone as a full-time freelancer scares me as much as it appeals to me.
For most of my career, even at an especially dark time of my life, I’d always played the dutiful clerk, compromising my principles and sanity just to keep the security of a stable paycheck.
But if there’s one thing I’ve learned from withdrawal, it’s that nobody owes you a living. The hard truth is this: when the numbers don’t add up on the balance sheet, you’re out.
The only thing you can do is survive and be a fighter.
At the risk of sounding clichéd, the opportunity awaits those who go their own way, their own happiness.
And maybe that’s the kind of adventurous spirit I needed to survive and thrive in the new normal. This is my new normal.