Have you been through periods in life where taking a few steps backward were necessary in order to make a giant leap forward? That's how I'd describe my fourth quarter finances.
My expenses exceeded my income for four whole months and I topped that off with a decadent month of overspending in December. Despite all that, my net worth dropped less than $5,000. If you don't count the seasonal decline in my home value, my net worth actually increased during this period by $374.61.
Overall, I'm proud of how I managed to protect my savings by picking up a part-time job and living off my bare bones budget during my four month career transition.
A New Approach To My Finances
For most of 2014, I focused on living as cheaply as possible.
Before I quit my job, I was saving close to 45% of my earnings by barely spending anything on clothing or entertainment, attempting to keep my monthly food budget between $200 – $300, and only traveling if I was able to utilize credit card points or frequent flyer miles.
Prior to that, I made deliberate choices to cut back on recurring expenses by dropping cable, finding less expensive health, home owners, and car insurance, getting rid of my home warranty, getting a less expensive cell phone plan, and finding ways to workout for free.
I've realized that cutting back further isn't the answer. I've spend money on things like wellness, gifts for others, and occasional trips. These aren't things that I'm willing to cut out of my life. I believe that allowing yourself to enjoy certain indulgences leads to a more sustainable long-term budget.
While I'm still planning to keep my monthly budget between $2,000 – $2,300 per month, I'm consciously working on earning more money for the first time ever.
I've got a side hustle that allows me to work anywhere between 4 and 28 additional hours per week on top of my day job. I'm currently in the process of experimenting with what works best for me. I've also transitioned to more fulfilling career that I believe will be more lucrative over the course of my lifetime.
As attractive as the extra income is, I'm also committed to learning from past mistakes. Not prioritizing my health by constantly overworking is what caused burnout last time, and I never want that to happen again.
Readers: Are you prone to overworking? How have you managed to find a healthy work-life balance?