Budgeting In A True Life Change

The following is a guest post from Crystal at Budgeting in the Fun Stuff where she covers savings, expenses, and budgeting in the fun stuff along the way.

Hi, my name is Crystal and I work from home.  I haven’t always, but after starting my own blog in February 2010 and my own blog advertising management business in April 2011, I was able to quit my cubicle day job in July 2011 and settle into a comfy office chair at home.  That would be a big enough life change by itself, right?  I agree, but the story doesn’t end there.  Mr. BFS just quit his own day job as a school librarian on January 20, 2012 and has joined Crystal-For-Hire full time.  I am excited and freaked out at the same time!

So, how do you budget for a completely different life than you expected 2 years ago?  You save a lot of money and pray.  Specifically, we needed to take a close look at our financial numbers like we did before I quit.  I was able to quit when I earned $2500 or more a month for 4 months in a row.  We used our current data to make a new target that helped us know that we were ready to take the full plunge into depending fully on our small business income.

Our Current Numbers

Here is how that data looked:

–  My husband and I need at least $5000 after taxes and benefits to cover our living expenses and basic savings.

–  I pay myself $1150 every 2 weeks and place $500 into the tax account every two weeks.

–  Mr. BFS was receiving about $4000 and receiving about $1400 every two weeks after taxes and benefits.

–  Everything above the basic $5000 has been being used to pay off our mortgage.

Those numbers led us to conclude that we needed to earn at least $7500 a month to live and save like we do now and way more if we want to pay off the remainder of our mortgage by June 2012 as planned.

Our Target

So we decided on a big target.  My husband would resign once we were able to make $10,000 or more for 6 months in a row.

You know what they say about plans, right?

Jumping in Early

We were rolling along very well and hit that $10,000 goal 5 months in a row, and then my business exploded.  Advertisers found me, even more clients found me, and I was sacrificing a bunch of sleep to keep up with it all.  So we adjusted our goal, justified that we were indeed on target, and my husband quit.

So yes, no one is perfect.  We fudged our goal a bit and are taking a risk a little earlier than expected.  All I can say is that it feels right and I think we are taking a very calculated risk that shows all signs of being a good idea.  We’ll all find out what happens from here.  Right now, I am excited and sick to my stomach at the same time.  I can only hope we looked well enough before the leap.

Anyone else out there relying solely on a work from home business?  How is it working out for you?

photo by Stuart Miles