November 2nd, 2011
Broke Gal in NYC, Part 2: Time Equals Money and Other Handy Conversions
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Welcome to the “Broke Gal in NYC” blog series! For the next six months, we’ll be following Kate from the Broke Gal in NYC blog in her progress to pay down debt, make a career change and do it all in a financially savvy way!
Keep track of Kate’s progress each month on the Credit Karma Blog. Read Kate’s first post, then come back and read this month’s update.
October has been a busy month. I took Justine’s advice and updated my resume, started keeping apprised of industry news via Twitter, Facebook and Google Reader, and am starting an online portfolio. I also picked up a consulting project and started my application for business school. I really enjoy being busy, and as a freelancer nothing is better money-wise.
I finally paid off my credit card debt! It was so nice to see my card balances at zero for the first time since 2007. It couldn’t have come at a better time since my partner and I have decided to move apartments in the beginning of 2012.
I will have to adjust my savings plans, and I have estimated I will need to save another $2,000 by February 1, 2012. This is going to be challenging because of the holiday season and costs of prepping to return to school, but I’m breaking it down into small monthly and weekly savings goals so that I don’t feel overwhelmed.
My student loans will remain in deferment but I intend on now paying the accrued interest so that it is not capitalized. I’ve also made the realization that the easiest way for me to think about money is not in dollars and cents, but conversions.
Two Lattes Equals Lunch
I really started getting a handle on my money when I starting thinking not in dollars, but conversions; meaning, I don’t think of the raw numbers but the things that my money can buy.
For example, if my daily budget is $30 and I want to go out on Friday night for dinner, a movie and drinks at the cost of $60 dollars, I know that for the few days leading up to Friday I have to be under my daily budget. Therefore, on Wednesday and Thursday I know I can’t eat lunch out because two lunches = $20 = one third of my Friday plans.
The most important conversion is time = money, which is essential for any freelancer or consultant to know in setting fees and managing business income and expenses, which leads me to one of my biggest challenges: time management. I often find myself wasting time and thus, wasting money. When my to-do list gets so big, I can find myself overwhelmed and anxious which impedes my ability to enjoy my free time since I am worrying about my undone to-do list. Right now, I’m experimenting with new ways of managing my responsibilities, because I think there is a missing function in my time=money equation.
Time Is On My Mind
Since I know setting up systems was essential to getting a handle on my finances, I am trying to set up a system for time and project management. With all of my responsibilities professionally and personally, I feel as if I am constantly moving yet not going forward as fast as I’d like. Sadly, this month my blog fell by the wayside when I was too busy with everything else. I know that it is essential for me to stay organized and scheduled so that my projects get completed.
Kate’s time-management advice:
- Put all appointments on Google Calendar and color-code them appropriately by category (work, home, personal, etc). I find color coding my emails very helpful too, and I will upload any relevant documents to Google Calendar so that I am not scrambling for information. I am experimenting with various apps for time management and to-do lists, such as Wunderlist, PageOnce and Google Calendar’s Task list. There’s a few other apps I hope to investigate and try in the near future.
- Don’t over-commit so that you won’t set yourself up for failure by trying to do too much. Saying no to someone or something is not wrong!
- Ask for help and admit when you’re overwhelmed. Maybe a friend, partner or family member can help you finish some things off or give you a different perspective.
- Recognize and be honest about what is working and what isn’t, and recalibrate as necessary.
How do you manage your time for both maximum productivity and enjoyment of personal time?
Kate’s November numbers:
Credit card debt: $0!
Student loan debt: $37,000
Approximate monthly income: $1,600
Justine’s November Goals for Kate:
Each month, Justine, Credit Karma’s Credit Advisor, will give Kate three small goals to work on before next month’s update on Kate’s ongoing career change. We’ll see how she’s progressed in next month’s post.
Time management and planning has been huge for you this month! Balancing short-term goals and long-term goals is the biggest time management challenge. Since you are in the “thinking and planning” mode right now, November’s goals are all about doing!
- Do now: Up your hourly salary. The missing function in your time = money equation is the actual numbers. Your approximate monthly income is $1,600, and if we break that down to a typical 40-hour week, your current hourly salary is $10 an hour. To help time manage your work responsibilities, prioritize what will be the most valuable use of your time. If project A pays out $60 for a 4 hour project and project B pays out $20 for a 1 hour project, project B is a better value-spend of your time. While I don’t necessarily recommend choosing projects solely on money, it’s helpful to prioritize projects by calculating and increasing the value of your time.
- Do continuously: Shave $10 off your daily budget. If you want to make that $2,000 goal by February 2012, that breaks down to saving about $154 weekly for the next 13 weeks. It sounds daunting, but take small and immediate daily steps to start closing in on that weekly goal. Shaving $10 off your daily budget saves $70 a week, and if you can sacrifice those Friday night drinks and a movie, that’s another $60 saved. Try the tried-and-true cash envelope system: at the beginning of the week, pay yourself first and put your savings amount aside, then allocate a cash amount for the rest of the week’s spending.
- Just for Kate: Keep up the blog writing! While it’s important to explore new endeavors, if you love writing your blog and it’s important to you, I’d love to see you schedule in regular time to write in your blog. First, stick to one of your time management apps/tools; then, schedule in a block of time for your blog. Prioritize that time like it’s a paid project or a business meeting; don’t let anything interrupt or compromise your blog writing time. Pursuing your dream job means keeping up a regular writing practice; it’s good for your portfolio and keeps your Broke Gal in NYC readers happy!