As a freelancer, I was thinking the other day that we actually live our whole lives on a form of credit, that is a credit to ourselves.
Every time I stop working, I am aware that the crisis has set in and there is no more money coming in. I hoard my money as savings, and I slowly watch it trickle down and away while I live through months without income.
I borrow from myself, the savings I have hoarded during the times of feasting while I am in (semi)-famine mode.
With freelancing, there is no guaranteed income coming in next week, or in two weeks, there is only the future promise of finding a contract that will bring in that income, but you have no idea WHEN, which makes all this budgeting and expense tracking so much trickier but so much more necessary.
While I don’t necessarily beat myself up for NOT spending only $1000 a month during my months of Famine, I do keep a careful eye on my savings dwindling down from $35,000 to $30,000 and so on.
When it hits the $20,000 mark, it’s when I start to sweat.
I feel my line of credit (from the Bank Of Myself) running close to its limit and running dry, and I start to cut back even more in my spending as the months go on.
It’s only when I get a contract and work, that I feel any kind of income relief.
Of course, this is all somewhat fabricated by me, myself and I to create this sense of perpetual semi-crisis or semi-poverty so that I don’t start spending like a rockstar, but it seems to help me make it through to the next contract.