Friday, December 31, 2010

Fiscal Year in Review

Wow, can't believe it is almost 2011! Time really flies!
Didn't it feel like it was just yesterday that everyone was preparing for Y2K, worried about the imminent destruction of the world which relied on computers that would go bonkers when they thought it was 1900 again. Yea, much ado about nothing. I remember lying on my bunk bed in the attic bedroom I shared with my older sister, watching the clock tick closer to midnight, waiting for the apocalypse, or at the very least, a blackout. But midnight and Y2K came and went and nothing, not even lights flickering. What an anticlimax!

Anyhow, now that I reminisced about my 12 year old self (yes, I'm that young), I can get to the point of this post- my fiscal year in review.


January, 2010. One year ago. Or rather, 363 days ago, to be exact, I decided that I wanted to see if I could make some money by being frugal. I'd been reading a blog about a frugal woman whose blog grew at such an astounding rate that she ended up making thousands from her blog each month. I wanted that! I felt I had good ideas to share! I loved writing, loved being frugal, and so, PennilessParenting.com was born.

Back in January, I was living rather frugally. Our income was small, and our expenses were small, but unfortunately, they were more than what we were bringing in. We were in debt and every month the debt would just grow. Even though I was frugal.

Having the blog gave me lots of feedback from readers and even more suggestions to how I could save money, and I began adopting those frugal measures.

In March, I started working as a cleaning lady for a family in my neighborhood. It brought in some extra cash, which definitely helped, but our expenses were still eating up our income. At the same time, it started getting warmer out, and I started line drying more instead of drying in the machine. That helped cut down on our electric bill.
In March, our hot water heater died, and we needed to pay cash to fix it as the landlord refused to do it. That set us back quite a lot financially.
In March, I also reached 10,000 visitors on my blog.

In April, my husband and I were starting to get fed up with our apartment. Because of a terrible landlord, we ended up sinking so much money into the apartment just so we could have livable conditions. We decided that we needed to look for another apartment, and we were prepared to downsize.

In May, my husband and I found an apartment in the adjacent neighborhood to where we lived. The landlords were good people, unlike the other landlord, the apartment was brand new, so it was in good condition, and the rent was a few hundred dollars less a month. A few hundred that I knew would make the difference between breaking even financially and spending more than we made.
The clincher? It was half the size of our current apartment. 454 square feet instead of the 900 some square feet in our first apartment. The living room was non existent. We'd need to get rid of our couch in addition to a bunch of our furniture and nonsense. We'd also need to get rid of our rabbits, chickens, and fish, all money traps in their own way.
Moving there would be costly. The move itself set us back a lot, in addition to what we were already set back  by our too high rent and having spent a lot of money on repairs for the old apartment. Regretfully, we took a loan from the bank. This loan gave us the ability to change our lives, by moving somewhere that we could actually afford. The loan also covered our overdraft, which was being charged at a higher interest rate than the loan.
Some might say that taking that loan was foolish. I think not. It was taking a loan as a way to better our finances. I absolutely do not regret it.

We found new tenants for our apartment; the landlord refused to let them move in. He knew he had rent checks for the months of May, June, and July, and saw no reason to have someone else move in in the interim. No, we couldn't cancel the rent checks- doing so would have been illegal in our country.

So for 4 months, we were paying double rent. It was eating us up alive, but fortunately my husband was able to work extra shifts at work and thus increased his take home pay. At the same time, I found a new cleaning job, so was contributing financially as well. I also got my first check from Google Adsense. Yay, I was $100 richer. Lol. But it was something, and it showed me that I could make some money.

In August, we no longer were paying double rent! Woohoo! Financial freedom! I also got my first sponsor for PennilessParenting, so I was able to make some money that way. I'm still looking for more sponsors, by the way. :-D

In September, I threw my son a big fancy birthday bash; it cost me very little money and we had a grand old time.
Also in September, my husband made a very measly income from his work, and I was sure we'd have to use up our emergency fund to stay in the black... but fortunately, I got a cleaning job with tons of extra hours in September that enabled us to get through the next two months and still be able to breathe!
September 2009 we made very little income. 100 dollars more than our rent that month. We ended up going more and more into overdraft.
In September 2010, my husband received a similar paycheck. Only this time, I had a cleaning job and we managed to stay out of overdraft! Definite progress!
In September, I also was contacted by a magazine; they saw my website and wanted me to be a steady columnist for them- the topic? Frugality! Though no increase in income happened immediately, the knowledge of money coming in the future was enough to make me feel giddy inside.

In November, I started writing articles for my new column, which was to be published at the end of November.
In November, I also got my second Adsense check for 100 dollars. Not a fortune, again, but 100 dollars can go quite far where I live.
In November, best of all, my husband and I accomplished a great thing- we completed baby step number one in Dave Ramsey's Total Money Makeover- we had a fully funded Baby Emergency Fund of 750 dollars! Time to move to step two- wipe out that debt!

In December, I was finally able to breathe a sigh of relief. For the first time in my married life, we ended the month with money in the bank. Not just the Baby Emergency Fund; we also had a decent amount of padding in the bank. The account didn't dwindle down to zero at the end of the month, as it had done every month previously (when it wasn't dropping below the zero mark). We had quite a few large expenses and were able to cover them all without flinching.
Finally, finally, I could say we were financially comfortable. Not only living within our means, but living below our means.


So, the year in summation? I would say it's fortunately just been going up and up! I see the light at the end of the financial tunnel. I'm able to live a relatively stress free life. I don't need to worry how I'll be able to afford things, because I know we have more than enough money to cover everything we need.
Yes, we have more debt now than we did 1 year ago. But as I said, I don't regret it one drop. We're finally relatively comfortable financially, in a position where we can start making huge changes in our life, and taking leaps and bounds forward in paying off all our debt.

My goals for next year?
My biggest goal for next year is to get really serious about budgeting. With monthly budget meetings. I know, I know, I made a budget and posted about it here, but it was a vague budget, relied on money that I haven't seen yet, and included expenses I no longer have. After reading Dave Ramsey's Total Money Makeover, my husband and I agreed that we will sit down together monthly and have budget meetings, working out where we'll spend our money each month, and then throw the excess at our debt!
I really can't wait for January 10th, when my husband gets his next paycheck. I am looking forward to writing an actual, tangible budget with the money we have in the bank.
Aside for that, I want to just keep on doing what we're currently doing- keeping our expenses down to a minimum, enjoy life and each other's company, and feel blessed for every day we're alive.

Happy New Year!

So, how would you sum up your fiscal year? Would you say you're at a better point financially at the start of 2011 than you were at the start of 2010? Or worse? What do you think contributed to that?

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