Back in the spring of 2013 I had some big events in my life. Ultimately, I was offered the opportunity to relocate to Boulder, Colorado for work so I took the opportunity. Little did I know that my new living and financial situation would lead me down a path of working to basically break even, if that.
I did a lot of contemplating before I decided to relocate to Colorado. The reason I chose to make the move were as follows:
- More job opportunities in Colorado: If something were to not work out with my current job, there were more job opportunities around Denver and Boulder than there were in Southern Oregon
- Change of pace: I was ready to try something different in my life and I thought Colorado would be a fresh start
- Outdoor activities galore: I thought I would spend a lot of time snowboarding, rock climbing, hiking, and endlessly enjoying the outdoors
- Better place to live while young: I don’t know, I guess I thought I would love the younger crowd of the cities than I would the older crowd of Southern Oregon
- Higher pay but higher expenses: I knew that there were likely better paying jobs in Denver and Boulder but also knew that living expenses were higher. I thought that the increased pay and higher expenses would balance themselves out and that at least there would always be more opportunities for work
The Lifestyle I Thought I Would Have in Colorado
As I was getting things in order, I did the math and thought I had my cozy lifestyle all lined out. I set myself up with:
- A nice 600 sq ft apartment: It was cozy but big enough for me, I loved the granite counter tops, it was modern looking rather than the older apartments I looked at, and just 15 miles from work
- A new car: I sold my 2001 Saturn L200 and bought a 2013 Subaru Legacy that would be great for snow driving, and I thought that since I would be making pretty good money that I would be able to afford the payment no problem
- Some furniture: I didn’t want to feel like I was a college student with mismatched furniture of Craigslist, so I busted out my weak interior design skills to strategically buy things that made my apartment cute
- A rock gym membership for $60/month: I love rock climbing, it’s a great way to make new friends and meet people to do enjoy the outdoors with, and if I can climb then I don’t feel the need to do much else that costs money
- A season snowboarding pass: I didn’t go through with this, but I thought that since so many awesome mountains were so close that getting a season pass would be a no-brainer. Even if it was say $400 for a season pass, surely I’d get my money’s worth out of it.
I had this idea that I would be rollin’ in the dough while living a somewhat “lavish” lifestyle in Colorado. I also thought that the above ideas were reasonable for someone making $48,000/yr.
Here are a few pictures of me “living the dream” in Colorado.
What I Found Out: I Was Basically Breaking Even
After my first couple of months in Colorado and the newness of the move wore off, I was becoming more and more unhappy with my job. It wasn’t just the work I was doing, but I hated working on someone else’s schedule, my work wasn’t engaging to my brain, I felt disrespected on a frequent basis, there was a lot of corporate BS, and I grew more and more unhappy on a day-to-day basis.
In this same time frame, I decided to take a good, hard look at my budget post-moving, just to take an inventory of my life… I’m sure you know how that goes
Here is roughly what my monthly budget looked like in July of 2013, when I was making $48,000/year.
|Payment Category||Avg. Monthly Cost|
|Other (Fun... what?)||$200.00|
$5.00 at the end of every month if I kept up this lifestyle?! ARE YOU FREAKING KIDDING ME!??!
I suddenly felt panicked. I thought that my lifestyle was more than reasonable. I thought that once I graduated from college and had a good job that there was no reason I shouldn’t have my own comfortable apartment, have a nice car, eat organic food, and have some modest fun.
Obviously, I miscalculated the costs of this lifestyle in Colorado. So what could I do about it?
Why I Needed a Larger Financial Cushion
Basically, no payments I was making were investments of any sort. All that money would never be seen again. Unlike paying down a mortgage, I would never own my apartment. I would never own my power system. In short, I was never going to get anywhere.
When I looked at the real numbers, I was hoping that I would be saving a decent amount of money a the end of every month so that I could make progress in life and maybe buy another house one day so that I wouldn’t be a perma-renter. I wanted to have a cushion for unplanned life events. I didn’t want to slave away at a job I slowly grew to despise strictly to pay for my overhead.
What Could I Do About It?
In this scenario, many people default to thinking that they need more money. I knew that I was probably close to a maxed out earning potential as a graphic designer with my skill and interest set. I knew that it was unlikely to make any more money in a career path I was unfamiliar with. I didn’t want to go back to school to find a higher-paying job because I realized that I despised corporate work, subject aside, and that my college degree was supposed to set me apart financially from those that didn’t have a degree… right? That’s the dream we’ve been sold since kindergarten?
- Apartment: The biggest expense I had was my apartment, but I was stuck in a lease and didn’t think it was feasible to change my living situation until the lease was up for renewal. So I looked to see what other areas I could cut.
- Food: I realized that food was much more expensive in Colorado than it was in Oregon. I was paying $9.99/lb for organic chicken. I decided to stop eating organic to lower my food bill by maybe $100/month. This didn’t excite me at all as I believe that eating as organic and “real” as possible that my health would thank me for it later on down the road. On the other hand, I wanted more money at the end of the month. Jesse kept saying “Save money on your apartment, not the chicken!” but I tried to save money on the chicken anyways.
- Fun: I put a halt on anything “fun” for the most part. I stopped rock climbing all together, I didn’t hang out with friends when it required spending money, I put a stop to spending money on clothes, and I didn’t travel far to enjoy the outdoors.
- Work: Since I knew I couldn’t tolerate my job for a prolonged period of time, I decided to engage in a new hobby of making residual income online. I worked on this puzzle for probably 30 hours/week with very little return. I somehow made $100 that December but my hourly rate was terrible! I knew deep down that this was my ticket out so I kept going.
These efforts helped me to save maybe $200/month if I was lucky but if you do the math, it would take me a while to save up any significant amount of money that I could actually make wise investments with, and it would probably end up being put towards the “life happens” category after enough months or years went by.
There had to be another way.
I thought about my situation long and hard over the months to come, trying to think of a way to break free from this cycle of working to pay for my overhead.
Fast Forward Many Months: I Finally Made Big Changes to Put More Money Into My Pocket
I was secretly hoping for a few months that I would be laid off from my job because I knew that I wouldn’t quit on my own. They were also cutting people left and right, so it seemed realistic. My prayers were answered, and I was given notice that our relationship would end in about 10 weeks.
This was the sign I was looking for to make a big change. I sprung into action immediately.
Here is what I did to put A LOT more money into my pocket upon notice of losing my job.
- Moved back to Oregon: I moved back to Oregon for two reasons. One, Jesse and I were ready to take our relationship more seriously and didn’t want to do this back and forth stuff. His business was in Oregon and it was MUCH more affordable to live there.
- Transitioned to self-employment & remote work: Thanks to a lot of coaching from Jesse, I jumped into self-employment with both feet. I contacted a handful of people in my professional circle to see if I could be of assistance with overflow work as a self-contractor. I immediately landed a remote gig that turned into a consistent $1,000/month. I also attended every networking group I could think of and with a lot of hard work was able to pull in another $1,000/month maybe.
- Found an affordable apartment: And by affordable, I mean we tried to balance cost with living standards. We went with the lowest living standards we could tolerate so we were not really in great areas of town. Our rent was $500/month, so my portion was $250/month.
- Lowered fuel bill: Because I wasn’t commuting to work, I was able to drive less which lowered my fuel bill.
- Shared cost of utilities: Because Jesse and I were now living together we were able to share the costs of household utilities, where before we were each paying our own. You don’t need a significant other to do this… any mature roommate should do!
Our Long Term Financial Goals
Long term, we decided that we really didn’t want to need money at all. We never wanted to be slaves to our jobs or to constantly feel financial stress. Some of the things we decided we wanted and are now getting closer towards include:
- Owning vs. Renting: We are working on purchasing our own land and then paying it off as quick as possible. We will then not have a payment for our dwelling. We will build our home cash with our own hands which means in the end, we will have spent pennies on our home compared to someone that bought a pre-built house with a 30 year mortgage.
- Owning our power & water systems: Why pay for utilities monthly? Our goal is to be off-grid. We would like to own a solar power system large enough for our modest needs. We also plan to have a well with access to free water.
- Have a garden & farm animals: To cut down on our food bill, we plan on having a healthy-sized garden large enough for an entire family, with some to spare. We would also like chickens and maybe a goat or milk cow. We will likely need to supplement our garden with local meat (unless Jesse wants to hunt!) and specialty items such as seasoning and coffee, but that is okay. The bulk of our food bill should be reduced.
- Have zero debt: Many people are held back by debt. Our goal is to have zero debt.
What YOU Can Do to Put More Money In Your Pocket!
To end this blog post, I would love to share some ways that you can put more money back into your pocket. We are all in different situations and come from different backgrounds, so what works for one person may not work for another. You may not have the option to relocate, or you may already be stuck with a hefty mortgage payment.
I’ve put together a list of 10 ways to put more money into your pocket. To access, please use one of the buttons below!
Let’s tackle the big things first. Remember… save on the mortgage or rent, not the chicken!
- Save money on your rent: If you rent, take a look at where you live. Can you move into an apartment that is more affordable even if it would lower your standard of living? You may be surprised to find that you need less than you think. What would you rather have… granite counter tops of more money and freedom?
- Get a roommate: If you live by yourself, why not get a roommate? If you have a one bedroom apartment or house this may not be comfortable, but if you get a two bedroom apartment it will be less monthly for the both of you, plus you get to share the utilities.
- If you have a house, rent out a room you aren’t using: When I had my house in Oregon, I knew that I didn’t want to pay the mortgage payment on my own so I had two roommates. It was a 3 bed 2 bath house so it worked out perfectly. Instead of me paying $1,090 for my mortgage payment, I only paid $345 of it. This allows me to have help paying off my house, not to mention help with utilities.
- Move to a more affordable area: Many people aren’t keen on the idea of moving. but some areas are just expensive. Yes you will likely make more money, but that is so that you an afford the extra costs of living.
- Work remotely: Some people don’t have the option of working remotely, but it doesn’t hurt to ask around. This is unheard of or impossible in some lines of work, but not in all. Some employers may allow you to work from home. Or, you may be able to find a different job that allows for remote work. You may also be able to transition to being an independent contractor which would give you control over your time, work hours, and even where you work.
- Think twice about that car: cars are a liability, not an asset. Do you really need that brand new car, or would it make sense to have a reliable used car that makes more sense financially? Would it be easier to not have a car payment? There are no right and wrong answers, but take a moment to think about your car(s) and if there is opportunity to do things better/differently.
- Eating out / coffee: Many people spend a lot of money eating out and drinking coffee. $5.00 here and $40.00 there adds up quickly. You may be spending $300/month on coffee and dining out.
- Entertainment: Many of us have forms of entertainment that are quite costly. A $100/month gym membership may help to keep you fit but it is not a necessity… you may be able to find a form of exercise in your own home or backyard that keeps you just as fit but lowers your overhead. Maybe you’re spending $150/month on your cable bill when you don’t even watch TV. Maybe you go to the movies a lot with friends when you could instead have your friends over for a BBQ.
- Spend money wisely: This isn’t necessarily about putting more money into your pocket, but by spending your money wisely on investments rather than cheap crap that will break, you aren’t always saying goodbye to that money forever. If you buy quality things with a high resell value, you can think of yourself as putting your money into an object that you can later sell if you need to and you should get some of that investment back. One of the reasons I bought a white Subaru Legacy instead of a blue Hyundai Sonata is because it had a much higher resell value… and when I sold my car just recently, I surprisingly got a lot of my investment back!
- Make a budget and look at it monthly: That which you pay attention to you become aware of. Between 2010 and 2012 I spent A LOT of money on clothes. I spent so much money on clothes that I was afraid to add it all up. I didn’t want to study my budget because I didn’t want to know the truth, otherwise I would have to accept it or make a change and I wasn’t ready for that. Mint.com is a great place for you to track spending by category, and you might find that there is something you can easily cut out.
Join the Conversation!
What is your experience with breaking even at the end of every month? Have you found any clever ways to save or lower your need for money all together? Have you made any large sacrifices to better your financial situation?
Let me know, I’d love to stir up some great conversation about how you feel on this issue and any solutions you may have found!
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