Living in the Denver/Boulder metro area you meet a lot of people who work for themselves. There is an entrepreneurial energy that permeates the city. With businesses such as: Smashburger, Chipotle, Izze, and Justin’s we like to create amazing business concepts and live the Colorado lifestyle. I’ve mentioned before that I want to work for myself. This is not a decision that I made lightly. Every time I looked for jobs the thought of someone else having so much control over my career and my potential earnings really frustrated and annoyed me. I also have become increasingly frustrated with the amount of time that I waste commuting to my job and think about how that time could be used differently.
I want to travel, get married, and have a baby. When I do these things I don’t want to work at an office. I want to be like all of the skinny moms that I see with a baby bjorn at the coffee shop who just worked out at Corepower Yoga and now are working on their ETSY store as they watch their child.
So, I became honest about what I really wanted for myself. I wanted to continue working, I wanted to make more money, I wanted to grow my skill sets, increase my opportunities, and I wanted to work remote. In order to do that I had to figure out what my number would be.
What number am I referring to? The monthly amount of money that I need to earn in order to have the same level of comfort and security that I do now. I began to create a mock budget and listed every single possible thing that I could think of that I currently get in benefits and that I pay for and I came up with the following number:
$5651
This is the amount I need to make for 6 months in a row before I would even consider leaving my current job.
I’ve spent weeks looking at my budget and reading other people’s posts about how they are making money now that they work for themselves. I’ve noticed in all cases that they are making MORE MONEY. They are also working harder!!! And they actually seem to be enjoying themselves while doing that. I don’t mind working harder, getting paid, taking care of my debt, and creating a schedule that works better for me.
I have created a mock budget and I increased it by $1000 increments so that I can anticipate adjustments to the line items.
Notice that Taxes are the FIRST line item on my budget. You do not want to be hit with a substantial tax bill or get audited. I’ve also found a CPA (Certified Public Accountant) who lives within walking distance of my house. I would rather pay the money three times a year to file taxes correctly so that I don’t have a major tax problem later.
| Line Item | Amount |
| Personal Income Taxes | 1386 |
| Mortgage | 600 |
| Electric | 65 |
| Phone | 25 |
| Groceries | 250 |
| HOA | 50 |
| Monthly Savings | 250 |
| Medical Insurance | 350 |
| Student loans (overpayment) | 1000 |
| Transportation | 150 |
| Budget for the Tiny Condo | 100 |
| Retirement (15%) | 700 |
| Mysterious additional expense | 250 |
| Travel | 100 |
| Future wedding | 100 |
| Entertainment | 100 |
| Clothing | 100 |
| Gifts | 25 |
| Glasses | 25 |
| Dental | 25 |
| Total | 5651 |
As I make this mental shift to becoming an entrepreneur I am throwing off the security blanket that is the idea of working for someone else. Fear is laced with high levels of anxiety-what if I fall flat on my face? That’s not an option. I feel like I’m emerging out of a long coma or stasis. I’m even waking up early in the morning to exercise-What the heck!!
I spent a lot of time thinking over and over again how much do I need to make each month working for myself. Have you ever thought about your number? Not your yearly number, that’s too easy. I’m talking your monthly number-that’s a bit trickier. It’s trickier because your yearly number is always pretty high. Of course it is, because who wants a low yearly number? The trick with a monthly number is that you have to start from a realistic baseline of expenses, taxes, etc. Then, you go from there.
If you look at my list of expenses I’ve taken into account everything I could possibly think of. I also increased my monthly student loan payment, retirement contribution, monthly savings, and transportation allocations.
Why would I work for myself and exist on ramen? What’s the point to that?
I thought big, but realistically for the first year of working for myself. It doesn’t mean that I don’t have bigger dreams. It means that I wanted to set myself up to succeed. In a pinch I could decrease my expenses by a substantial amount. I don’t want to do that though.
I want to make more. I want to increase my savings, retirement contributions, money that I set aside for travel. I want to spoil my mom, visit my relatives and friends, get mani-pedis, and go out occasionally for a yummy meal.
In the past few years I have: stopped shopping for clothes for a year, taken public transit, stopped going to the grocery store for 9 weeks, eaten what’s in my house, grown a vegetable garden, and used my sh$t. I’ve side hustled, cleaned Super Poo, and product tested. I’ve dug deep and am ready to dig deeper.
Let’s Do This Thing.
What’s your number? Have you thought about Freelancing? Yes? No?
What’s stopping you? Are you a Freelancer? When did you know it was time
to take that risk?
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Hi Michelle,
I am also looking to start freelancing, too. Creating a mock budget is a great idea! I randomly came up with a number, but I may have to go back and change it after I sit down and really think about what I want. Best Wishes!
Hi Belita, thank you so much for stopping by! I would recommend using one of your old budgets, and then work from there. Also, since you have the two cutie pies (I checked out your blog) I would recommend adding their 529 savings, and getting an insurance quote for the three of you. Include your retirement savings! My mom raised me after she and my dad divorced it wasn’t easy but she did it. You will be fine and I think you will find a path to freelancing! Good luck and sending good vibes your way.
I think it is super that you want to work for yourself. There is nothing like it! About 18 years ago, my husband started his own business, designing outcome programs for orthopedic surgeons. It was great for about ten years. We loved that we were out of office politics and working for ourselves. It cost us about $10,000 to be licensed by the American Academy of Orthopedic surgeons, but it was a good investment at the time. Sales were good, and then the Academy made some changes to the questionnaires that patients had to fill out for the information that we needed.
This directly impacted us in a negative way. Patients simply would not fill out all this info (4-6 pages). It went from simple to complicated. My husband needed all this information to design our programs, and it vanished! We thought of going into the cardiac outcomes business, but the license cost $100,000 for that, so it was a no go. After a while of seeing our business decline, Hubby went to work for a hospital.
My point is that there are many things that impact self-employment that are out of our control. You may want to ease into this. Keep your regular job and build your own brand slowly. It is highly competitive in the internet world. Not everyone can be a Pat Flynn! Would we go back to our own business? Yes, but it may now be after we retire.
Kiki, thank you so much for your wonderful comment. I actually have been thinking quite a bit about diversifying my income once I’m self-employed. I think about this a lot even now because I don’t like having my eggs in one basket. I think that you make an incredibly valid point about things being out of your control that will affect your business. But, it also is the exact reason why I want to work for myself-I don’t like all of the arbitrary business decisions outside of my control that affect: my continued employment, my ability to make more money, my ability to take time off, etc. I work for the State and watched with concern when Wisconsin did away with a lot of the concessions that Wisconsin State employees had. Also, when the U.S. GOVERNMENT shut down-that was it for me. I know that I can depend on myself and I want to prove that I can do this. You are also right to advise a slow and steady approach-which I have been working on. Now, it’s just time to accelerate the pace.
Hey, Michelle,
Good post, but I have a question. The $1386 is property taxes PER MONTH? So, in effect, you pay about $2,000/month for housing, right? I’m asking because my boyfriend and I are just starting to talk about buying a house, and I’m really concerned if taxes are so high!! It actually makes renting seem like a better decision…
Thoughts?
Thanks.
Oh, wait, I just realized that Taxes probably refers to personal income taxes. Sorry!
🙂
Hi Andrea,
Sadly (or happily) those are income taxes! I think I pay less than a $1000 a year for my property. Just don’t overbuy.And don’t buy a house based on two incomes. And…I wrote a post about how buying a quirky property can really pay off later. You may want to give that some thought. Good luck with your house hunting!
Whew, check you out lady! It’s so good that you are making sure you account for all of the small details that could happen financially. Do you already have your emergency savings fund saved and set up?
I don’t feel like living on Ramen, so I had to really think about my current goals, short-term future, and distant future goals. The emergency fund is being funded this year. I am thinking about the amount and have decided to up it quite a bit. Will probably blog about that later this year. Btw-when do you sleep debt killing machine!??
That’s awesome! I would love to work for myself later on and am looking forward to reading about how you do it. 🙂
Andddd sleep is a bit of a commodity. It was especially crazy this holiday season because my restaurant did a ton of catering gigs. During the school year, 8 hours is a minimum during the work week, and whatever my work schedule will allow on the weekends 🙂
I have just hit the point of “No Return.” It’s long overdue for me to take some risks and this is a big one. I just had to figure out a way to do it that wouldn’t put me at risk. Now that we have access to health insurance (one of my biggest concerns) I feel a lot more comfortable with moving forward with my plan.
That’s wonderful. When you have that passion it will further drive you forward. Looking forward to reading about it happen.
Having a plan and a goal is great-now I just have to implement it!!
Your posts are always so inspiring and motivating. I can tell you have a lot of drive, and it’s great that you’re already saving for your wedding. That’s a great idea. Good luck on getting to that number. Many people seem to make a lot more from freelancing than I do at my current job, so I am hopeful I’ll be okay with replacing my income someday.
Thank you for your kind words. After being depressed for so long I have worked hard on being positive and hopeful. I work on it everyday 🙂 I decided to save for my wedding (with no boyfriend in sight) because I needed to set an intention. I think that there is a lot of power in doing that and would encourage everyone to set intentions for what they want. I also noticed that most people are making more than I do at my current job. That was a turning point for me and how I thought about self-employment. Every single person who has switched to self-employment makes more than I do. I was sold. I just had to get to the point where I believe I could do it-without starving to death.
Freelancing is certainly and hopefully in our future. I would want to make exactly what I am making now at my job (40k) plus an extra $200 a month for security and $100 for insurances. That’s roughly $3k.
Michelle, all I can say is that all of the people who have switched to freelancing are making more than I do. They also seem to travel more, volunteer, and while working VERY HARD, they seem pretty freaking happy. I’ve drunk some of the Kool-Aid. I want in. You can definitely make $3k, I think the key is finding the jobs consistently, and diversifying. I won’t just freelance, I plan on offering other business services too (Social Media Consulting, Virtual Consulting, Event Planning, etc) I will also offer offline services. Just freelancing makes me a little nervous.
I side hustle and have just recently thought about what I’d need to be a full time freelancer. At this point, I think it would be roughly 3k, so I could pay for my own health insurance and still have a decent life. You’ve inspired me and I’m so glad you are starting on this path!
I side hustle like a baller! Hehe. I totally think you can work for yourself. Luckily, living in Colorado our health exchange website is fantastic. So, I will be able to create a profile and price out my insurance costs before I make any “leaps”. I’m making a leap of faith in myself-but, not a stupid one. Keep me posted on what you do-but, don’t lowball yourself…make a little more. Eating ramen sucks (you have to think about the taxes that you have to pay.)
I do not want to freelance but my number would probably be close to yours as I take home about 3k now. Love that you are taking steps to realise your goals.
I have hit the point where it’s time to try something new. I think there are moments in one’s life when you have to take a leap of faith in yourself. It’s just time.
Hey, ramen isn’t so bad, you know? 😉
Seriously though: speaking from experience, if you are doing what you REALLY REALLY want to do, you won’t care so much if you are eating on the cheapo. My husband went from a cushy, well-paid job in which he was bored, to striking out on his own 250 miles from home with next-to-no financial security, eating ramen for a year. And he was happier the year he ate ramen.
(Please to report that our kitchen cupboards proffer more culinary diversity these days though…)
I ate too much bad ramen in college! I DO love the good stuff though. You make a valid point that passion and drive often will override everything else. I have to admit that I’m close to the point where I could just eat ramen, peanut butter and jelly sandwiches or mac and cheese just so that I can get my freedom back. We might be having that conversation next December if I lose it!
Sounds good to me! 😉
I could live on less than that…as I already do! But, I want to make more money.