Tuesday, May 8, 2012

Side Hustle

I believe that every one who is head of their household should have a side hustle.  No.  Actually, if you make over $200k a year, you probably work long enough to where you don't have time for one, and quite frankly, you make enough as it is.

But, for most of the rest of us out there (incomes less than $70k), a side hustle is a great way to scratch a little ground out, make a little buffer on Murphy.  While I didn't understand it while I was growing up, my Dad spent Saturday mornings and a couple evenings a week preparing taxes at the local tax office.  I can only assume that dedication to our family is what helped pay for us kids to go to college.  His side hustle is something he still does today, for a few months each year, even though he lives now 140 miles away from the job.  He enjoys the work, the people, the money is good, and since he's working there for over 20 years, is pretty well vested in the firm.

My side hustle history started right out of college.  Two weeks before I started my full-time State engineering job, I quit my job at Pizza Hut, where I had delivered pizza for three years during college.  I spent those two weeks relaxing, but anxious to start making some money again.  I hadn't worked for two months at my full-time job when I went back to the Hut to ask about delivering a few days a week.  I went on to work my full-time job, and my side hustle, delivering pizza for about 3 more years.  In that time, I got married, paid off my credit card, engagement ring and car.

I ended up finally quitting that pizza delivery job when I accepted a new full-time position and when my wife graduated college (dual income household then).  I only had the full-time job until January of last year when I contacted a friend about doing some weekend contract work for his race timing company.  We hit it off well, and I worked for him all last year, and am doing the same this year.  That job, and some connections, have led to other, smaller, contract jobs measuring running courses.  It's been an awesome ride, so far, even when I get up at 3:00 a.m. on a weekend morning to drive across the state to time a 5k.

With the extra income, we've managed to avoid lifestyle creep, but have also been able to more easily absorb some bumps in the road.  There are so many great side hustle opportunities out there, get yours today!

Tuesday, May 1, 2012

What's a Sinking Fund?

What's a sinking fund, and what do you use them for?

A sinking fund, is basically a savings account that you fund with regular deposits (or withdrawals, in our case).  We use sinking funds for a lot of our budget categories, about 10 "envelopes" worth.  We currently have sinking funds for:

  • Clothing
  • Home Repair
  • Car Maintenance
  • Vehicle taxes and insurance
  • Subscriptions
  • Vacation
  • Race entries
  • Gifts
  • Dinner out
  • Pre-school (during the summer months when we don't have tuition)

These are partially funded with each pay check I get.  We store these funds in either physical envelopes or a 'virtual' envelope where we use an Excel file to account for a money market fund at the Credit Union.

For example, the first time we put a budget to a paycheck, we allocated $15 for clothing.  This went in an envelope.  During the next two weeks, we didn't spend any money on clothing.  The next time I got paid, we put in another $15, for a total of $30.  Same thing happened the next two weeks.  Eventually we had $90 in our clothing sinking fund.  Then we bought about $60 worth of gently used kids clothes for our boys at a consignment sale.  This left us with $30 to build back up.  More importantly, it left is with no stress, because we were able to pay cash that we had saved and designated specifically for this purpose.

These funds are great because they account for things we don't need to buy every pay check and for things that take a while to save up for.  I highly recommend the use of sinking funds for these and even more budget categories, since they're essentially savings accounts.  And, I love savings accounts!