As I sat at home sipping my morning coffee with the chirping birds, finally recovering from the myriad of corporate burnout, Hong Kong harsh covid lockdowns, and from country hopping, I knew it was time to get my butt into gear in terms of my financial goals. Finally, I thought to myself, cracking my knuckles, time to get to business.
I’ve been grinding a bit at home – picking up odd jobs here and there, whether it was voice acting, day laboring, or writing, but all of it has been directionless. While all this was happening, I wasn’t curtailing my spending and I was shamelessly spending too much of my cash on hobbies such as paint brushes which was causing my credit card debt to continue to pile up. Not to mention, student loan payments are coming soon and I’m determined to stop owing money to anyone.
I saw an advertisement for Bailey’s podcast about figuring out your finances and decided to jump on the opportunity and take whatever verbal lashing was due my way. Sometimes, even if you know you need to be reprimanded, it’s easier when it comes from someone else than that small voice in your head that we often don’t like to listen to.
A bit about Bailey Grady from Bailey’s own bio on YouTube
Built my first business at 15. Millionaire at 23. Raw, unfiltered journeys of debt and financial victories. No get rich quick schemes, just real life lessons and boring investing to help you win with your money. Join me as we dive into the world of money, from credit card debt, student loans, car loans, buying a house, debt management and everything in between. Let’s talk money, wealth building, business-building, and enjoying life together! I want to help people learn about money, invest their money, build businesses and enjoy their life.
#1 The best time to start budgeting and living within your means is NOW
Learn from my mistakes and don’t think that you can wait to start budgeting and that time is on your side. Before you know it, time will slip past and credit card debt will pile up. I kept telling myself, once I win enough contracts and earn x amount per month consistently, then I’ll take care of my debt. It was a circular loop of enjoying retired life without consequence; me not looking at my finances, me thinking everything was okay, and me opening a can of beer to play World of Warcraft. The grind can wait, I kept thinking. The resting of my overworked brain was a good respite, but if I had started budgeting a few months ago I could have prevented a lot of unnecessary expenses and been more purposeful in my rest and return to work.
#2 If you can’t pay off your credit card each month then you shouldn’t have one
He was adamant on this one – DO NOT carry credit card debt from month to month. If you can’t pay for it now with your cash account, then don’t buy it at all. I didn’t realize that carrying balance on your credit card to the next month was detrimental to your credit score.
He told me that I should take my credit cards and cut them up since I can’t be trusted. My big caveat to this though is that one should always have a credit card for an emergency, especially when traveling abroad – you never know what might happen.
#3 If your assets are earning less than what your debt is costing, sell the assets to pay off the debt
This is a big one for me – it’s hard to stomach selling my assets but Bailey had a good point, those assets aren’t bringing in money the same way the credit card debt is costing me money. It’s better for me to rationally pay off my credit card now and then re-invest in those assets once I’m no longer in the negative.
#4 Set aside money in a high yield account to pay off my upcoming taxes
Take 25% of each paycheck and put it into a high yield account of around 4.5% to 5%. It’s easier to imagine the money already set aside than to take out a big chunk when the tax man comes. This is especially important as I am running invoices through my company and so taxes are not being taken out of my paycheck in the first place. It’s really going to hurt when tax season comes around.
#5 Keep track of your spending
Bailey recommended Mint.com and I second this – I used to use it all the time at university when times were tough and it’s time to whip it out again. If I see how much I’ve already spent on miniature painting materials, I’ll be able to restrain myself from overspending (hopefully). It’ll also give me data on how well I am improving once my goals are set and where my cash outflows are actually going (to beer).
#6 Set goals
It’s important to know WHY I am saving and taking care of my finances. I have a lifestyle I love at the moment; freedom of movement between Hong Kong and the USA to spend time with family and friends, working on my own schedule and being able to do almost anything on a whim. This comes with some downsides, such as how to finance this lifestyle in a meaningful way. How to direct my life with purpose, facing the existential void and deciding the values I need in life – you know the usual stuff when not faced with scheduled monotony of a routine. Although, compared to my last corporate boss, my current boss is a bit of a lazy slag.
So here are my four-month personal goals that I’m going to lay out here:
- Pay off my credit card debt (around 10,000)
- Set my student loan re-payments to be above the interest generated on them so I can finally be on the path to pay them off.
- Curtail spending on extra ‘things’. As a nomad, I have enough things and I can rely on my resourcefulness.
- Generate a revenue of 5,000 USD a month (which would put me to around 60,000 USD a year). Currently my revenue streams are inconsistent and untracked.
Here is my vision board for the long term future, they’re big dreams but you’ll always be surprised with what you accomplish when you close your eyes, imagine, take aim, and charge for it.
- Own a house
- Generate 20,000 USD a month in revenue
- Have no debt
- Fix up my trusty car, Beemo (he needs a new paint job, new ignition, new lease on life)
- Have a personal assistant a few times a week to do some of the workload
#7 Make sure to budget
Bailey said he and his wife sit down and work on their budget for just a short time each week to keep track of their spending and to see what they still have available in their funds. Make sure the budget works for you and is WITHIN your budget. I think it’s valuable to have some play money each month for mental health and for quality of life, but I need to rethink how much of my money is currently spent on play and how much is going towards debt. Right now it’s nearly 80% play/20% utilities, so I need to reverse uno those numbers asap.
For the past few months, I’ve been able to generate around 2,000 a month, so Baileys suggestion was
- $500 a month set aside in a high yield account for taxes later on
- $500 a month for spending on life
I would separate this to $200 a month for fun, $300 for necessities.
- $1,000 a month for credit card debt
#8 The small things add up
Back when I was earning 100k+ in Hong Kong and able to support all my needs, I was willing to pay for subscriptions, getting my nails done, and other services because the amount I would pay someone or the service would be less than it cost me per hour to do something myself. So, if my time was worth x amount, and the service cost x-10, then it made sense for me to pay for it and use my time elsewhere. That is NOT the case now. Before I had money abundance and time poverty, now I have technical poverty and time abundance. Time to unsubscribe and refind piratebay get a library card.
Subscriptions that I can unsubscribe and find free alternatives:
- Kindle unlimited (14.99). I truly can go to the library and many libraries offer kindle editions
- Audible (15.99). Did you know you can return titles that you purchased with a credit from up to 365 days ago?? I did not and I was able to return some of my titles, get the titles I wanted for my upcoming international flights and cancel my membership. There are many free audiobooks available such as at librivox and other sites.
- Peloton (12.99). This was a bastion of my bougie days when I had the best personal trainer (Daddy Kush) and I would workout at least three times a week to get the abs I always dreamed of. Well, ten pounds later and full of disillusion, I have found that I barely use Peloton. Not to mention the classes aren’t any better than free YouTube workout classes I have found online. Shoutout to Yoga with Kassandra for getting me through some of my body’s aches and pains.
- Hulu (16.99). I got this because I was relying on Bones as a comfort show at my fatigued moments of traveling. I cancelled this because I have YouTube Premium thanks to my brother and watching TV isn’t the best medicine for an overstimulated exhausted brain. It was more of a time drain than anything else and it’s time for it to go, even if I love Booth and Bones.
Each one of these subscriptions felt like just a little bit here just a little bit there but it all added up to $60.96 a month. That’s money I could be putting towards my credit card debt. Not to mention, that mental attitude of just a little bit here, just a little there really creeps up on you. Before you know it, you’re spending just a bit here on a few beers at a bar, just a few there at Bass Pro and bam, you’ve just spent more that $400 this month on things you don’t need or can find alternative solutions to (7/11 beers at the beach, discount paints at the local craft store, etc).
#9 Make sure you charge enough for your time
I hadn’t realized how much inflation had impacted the USA until I came back home. What a culture shock! I used to think charging someone $25 an hour for a website build was enough…maybe back in 2012. Even developers in developing countries are now charging more than that. Bailey pointed out that I should be charging at least $40 an hour and I should work my way up to $70 an hour with my skillsets. University me would have been drooling at the idea that I could ever earn that much in an hour working from the comfort of my own home instead of greasy gropey late-night waitressing. The important thing is to build up my portfolio so I have proof of my work.
Overall, I am proud of where I am and the decisions I’ve made, but it’s time to get my finances in order and set my sights for the next stage of my life, which includes an increasing rate of financial independence. By having my goals aligned, I can better keep myself on track for savings and spending, keep my bigger dreams on the near horizon, and not wake up in the middle of the night in a panic because I have no money. Having a monthly earning goal will enable me to reject underpaid gigs and avoid underpricing myself in proposals. It will also motivate me to work when I’d rather be drinking beers in the afternoon sun. Besides, the beers will taste all the sweeter if I earned the right to relax, instead of relaxing in order to escape responsibility.