The past year has been eye-opening in terms of how I spend money. It wasn’t so much how much I spent but why I was spending money in the first place. Living in my car put my spending habits under a microscope, helping me see things objectively for the first time. This year I’m ready to tackle some of those whys and re-align my spending with my personal values.
One of the ways I’m going to try to do this is by keeping a report of how money flows in and out of my life. By being more aware of how money flows my goal is to be more deliberate with my discretionary spending, that is all the money I spend on incidentals like food, gas, personal expenses, and entertainment. While I lived in my car I became more consciously aware that my spending happened subconsciously, on autopilot. I didn’t keep track of my discretionary spending and let my emotions lead the way. Now that I know what triggers my spending habits, I think I am in a better mindset to manage my money this year.
I also came to a really important conclusion last year about financial stewardship. During my 20s I didn’t have the discipline to manage a single $1. How on earth could I ever imagine managing thousands, tens of thousands, or even millions of dollars someday if I can’t even manage just $1 right now? If I want more financial resources to flow into my life I’ve concluded that I have to first demonstrate that I am responsible and I plan to do that by being more deliberate. Discipline is a habit you have to practice. It’s not something you can magically learn overnight.
To be a better steward of the financial resources I currently have, I am setting parameters around my discretionary spending. I’m giving myself a $500 budget each month broken into two $250 allowances. These allowances are disbursed with my biweekly paycheck into a segregated checking account that is separate from my other, primary bank account. When the money in that segregated account is gone, it’s gone.
The reason for segregating the accounts is to use the separate checking account to mimic how I used to use credit cards. Because of my undisciplined approach to managing money and my scarcity mindset around what I did have, I developed a habit where I would charge everything to my credit first, then make a payment. The money I needed for rent was comingled with the money I used for discretionary expenses so I didn’t have a clear grasp of how much money I actually had to spend. As a result, I took on a lot of consumer debt.
Back in December, I decided to chop up my credit card once and for all. My credit card was kind of like a financial security blanket. It protected me from the financial insolvency I otherwise would have faced due to my weak grasp on my finances.
By swapping out a new debit card with my old credit card my hope is to retrain myself to spend consciously. Instead of having an arbitrary credit card limit to spend towards I now have a balance I can spend down to. Credit limits can be a little too permissive while overdrafting a checking account is more punitive. It’s a subtle mindset shift, but I do think it is an important one. If you’re like me and struggle with credit cards, consider chopping yours up and adopting the segregated checking account approach. I now realize a credit card is simply a tool but without the right training on how to properly use it, it is easy to abuse.
The goal of this is to teach myself how to be a better steward of financial resources. I don’t believe in the mindset of budgeting for reasons you can read about here but after living in my car I am aware that my discretionary spending habits are a manifestation of my beliefs around money. Thus, I’m going to focus on teaching myself how to live more deliberately by keeping my discretionary expenses under $500 per month.
Discretionary is everything that isn’t fixed and obligated such as food, gas, or personal expenses. I’m only focusing on these expenses because they are within the realm of my control. How much I pay for rent, my monthly phone, and my car payment are all fixed expenses. My fixed cost of living expenses total about $1,180 per month.
The other fixed expense category to note is debt. Excluding student loans which are still in COVID forbearance, my minimum debt payments total $348 per month. Any unallocated funds are going towards debt repayment, as well as saving up to buy a bus to convert into a skoolie.
|Everything Else (personal expenses,|
one-time expenses, gifts, etc.)
What I Did Well
This process helped me significantly cut down on food expenses. In 2021 I spent $445 on average each month on food. Through living in my car I discovered spending money on food was something I did to fill an emotional void in my life rather than meeting my caloric needs to survive. I’m not trying to save money on food for the sake of saving money on food, but rather to let go of using food as a way to meet unfilled needs in my life. The savings here shows I’m making progress in that regard.
I also allocated about $40 in my Everything Else expenses towards purchasing a gift for a friend. I am a terrible gift giver because of my scarcity mindset. I have trouble putting others before myself because I do not feel like I can meet my own needs. I want to become a better gift giver this year as a way of overcoming my fears and keeping financial insecurity in check.
What I Didn’t Do So Well
Even though I worked from home the entire month, I spent a lot of money on gas. This is due to commuting about 1.5 hours to the Goodwill bins to go sourcing for my eBay business. While the mileage will be a future write-off on my 2022 tax returns, I have to spend the money now, in the present. This has made me more aware of the role of cash flow in both a personal and business sense. When people talk about starting a business they highlight all the ways you can write stuff off on your taxes. While that is absolutely true, you still need to spend money upfront to get the money back.
I also didn’t plan for an oil change which added a significant expense to my Everything Else line. Last year I started the practice of automatically transferring $50 per month to a car maintenance “sinking fund” which I am holding for significant repairs. While this is a good habit I think everyone should get into, I didn’t adopt the same mindset around routine maintenance. I know how often I will need oil changes and can estimate when I need new tires so this is something I can and should start factoring into my sinking fund.
Last but not least, I obviously did not stay within the $500 per month budget I set for myself. I spent $242.56 more than allotted. Fortunately, I had that money available to use in a separate checking account. However, using that money meant less I had to put towards debt and saving for my school bus. Instead of borrowing from a credit card company, I borrowed from myself interest free.
Even though I spent more than I planned, this exercise made me more aware of my spending habits. I’m not beating myself up because I overspent but I am looking more objectively at how I spend money. I had 17 no spend days this month and significantly cut my food spending. I lived reasonably within my means and didn’t spend frivolously. Given inflation and other macroeconomic issues maybe it’s possible that $500 isn’t enough and I need to adjust my expectations. The goal is to become more conscious of how and why I spend money, not to be overly legalistic on staying within untenable parameters.
While I learn how to live within my means so to speak I am concurrently building multiple income streams. I love side hustling, but purely from a risk perspective, if COVID taught us anything it is that we are all one day away from financial insolvency. I think relying on a single income stream is a liability in today’s economy and we all need multiple streams of income. Businesses don’t rely on a single product or a single source of revenue so why should we?
|Stream of Income||Gross Amount|
|Digital Product Sales||$9.97|
eBay Reselling: $2,085.88
I’ve been ramping up my eBay business since I moved back to New York in September 2021. This month was my best month yet with 99 sales generating $2,085.88 in gross revenue. My best flip of the month was a lot of Victoria’s Secret bras I picked up for about $2.00 at the Goodwill bins and sold for $65.
Digital Product Sales: $9.97
This month I released my first digital product of the year: The Ultimate Guide to Selling Trash on eBay. It’s 80+ pages of different ways you can sell actual garbage, recyclables, or household junk on eBay.
I even put what I wrote to the test and listed my own junk mail on eBay. It sold within an hour and I made a $2 profit.
I sold one copy the day it launched which is all I could have asked for. I think it’s a pretty dope guide and I think everyone should read it but that’s just me. Don’t take my word for it, check out what Rick over at Debt Free Mafia has to say:
Digital Advertising: $44.44
This website is another way I generate revenue so thank you for taking the time to read it! I currently monetize the site with Google Adsense which displays digital ads on my site in exchange for a fee. This month I generated $44.44 in revenue.
While I am grateful for this option as I slowly build my site, I candidly admit I want to get away from this revenue stream as soon as possible. I’m not a fan of digital advertising and can’t wait to get to a point where I no longer need to have it.
Affiliate Marketing: $12.33
You might notice affiliate links peppered throughout the site. I also generate revenue through affiliate partners. I participate in a number of affiliate programs, including Amazon Associates. I generated $6.33 in revenue from Amazon and another $6 from other programs leaving me with a total of $12.33. Big money I know.
I should also note I feel the same way about Amazon as I do Google Adsense. It’s a necessary evil. If you do click on one of my affiliate links I will be grateful but please don’t buy more than you need on Amazon. Buy local, look for used items, and borrow whenever you can.
I also participate in a number of other affiliate programs. If you’d like to support Millionaire by Next Year through my affiliate links or are curious about programs you could join for your own website you can check out the Tools page to learn more.
Mystery Shopping: $12
I completed my first mystery shop this month! I downloaded Gigspot and noticed there was a gig at a gas station on my way home from the Goodwill bins. I stopped in and literally made money while I used the bathroom and bought myself a cup of coffee. Not too shabby!
In total I made $12. There aren’t too many gigs in my neck of the woods so I won’t prioritize this income stream but if I can make $10 a month to stop somewhere that is already on my route, why not?
Microhustles are all the little things you can do from your phone like taking surveys. This month I cashed out my point balance from Evidation (formerly Achievement) which allows you to earn points for physical activity. You can cash out your points via PayPal or convert them into gift cards. While you won’t earn a lot doing this I like it because it syncs up to my existing accounts on Strava, FitBit, and MyFitnessPal and allows me to passively earn points while I train for my next marathon.
Millionaire by Next Year has been live since 2019. When I first started the blog I attempted to do something similar to this where I highlighted my expenses and income each month. After a few months I stopped writing it. In the years that have passed I now know why: I was judging myself.
As a writer and creator in the money space I feel I’m supposed to show high performance metrics or budget within tight parameters. At the time I couldn’t show that I was making money and I was embarrassed by my spending. I wasn’t in the headspace to share that information with you because I felt judged, regardless of whether that judgment was real or perceived.
One of the biggest lessons I’ve learned from this whole blogging process is that everyone starts from $0. I constantly get bombarded with CNBC articles with headlines that talk about young people who make absurd amounts of money in short periods of time. I now realize those are outliers used as clickbait to generate revenue. That perception is unrealistic and a very small minority of content creators find success instantly. I need to stop comparing myself to those people.
The other thing I’ve realized is that a good number of creators in the personal finance space aren’t authentic with how they make their money. They create artificial performance metrics that the rest of us feel like we need to meet even though their success is largely derived from a handful of high-profit products such as credit card affiliate programs. (And being able to dedicate more time to their blog because they have a wife cook and clean for them…oh did I write that…oops). I can’t wrap my head around using this platform to sell toxic financial products even though that’s the most profitable route to take. There’s an unethical paradox implicit in doing that: I read an article on a blog about how to save money but the same blog also asks me to click a link and sign up for a credit card. It feels icky doesn’t it?
I’m not going to use this platform to try to sell profitable financial products to you that I don’t believe in. My revenue is going to be substantially less than most other financial bloggers who peddle similar content about side hustling and making money. You might compare me to other successful bloggers just as I compare myself to them as well. I just want to be honest with you: I’m not going to be as financially successful as them and I’m not going to lie about it either. It is what it is and I’ve come to accept that.
For me, authenticity is more important than income. I generated $2,100 in revenue across 6 different income streams last month. I’m really proud of that. While it is certainly a modest income it is a lot more than most people make at their full-time jobs, let alone side hustling. Now that I’ve planted a few more metaphorical digital seeds, I hope they will bear fruit down the road. Everyone starts from $0, including yours truly.
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