How I earn and spend my money – February 2011 finance report

 

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First off, if you don’t know what these finance reports are all about, see the intro to the January edition for reference.

I actually earned some money in February (yay!) and also learned a lot about exchange rates. I’m still using bank accounts in the US, so I’m left trying to track multiple currencies. The tricky bit there is that the exchange rate between dollars and euros is constantly fluctuating. To come up with a reliable final balance at the end of the month, I have to go through my earnings and expenses and use the same exchange rate to convert the dollar figures.

If that all sounds a bit confusing, it is. It gave me a headache for a while, but methinks I have it figured now.

What it all amounts to is this: At the end of my January finance report I stated that my bank and cash balances were down to €8,545. Adjusting for changes in the exchange rate, that had shrunk to €8,455 at the start of February. Sucks, I know. Them’s the breaks when you’re dealing with multiple currencies. It’s possible though that my new balance below could inflate a bit with a favorable exchange rate at the end of March.

Anyways, let’s get into the breakdown…

February expenses

€380 – Rent and utilities (- €5 compared to last month)

Rent accounts for €375 of this, and the other €5 was spent getting a key cut for a CouchSurfer. I expect this total to be much higher next month though, since I still haven’t paid for any utilities since I moved in at the end of December. Everything is in my housemate’s name, and he’s been away for the last few weeks so I’m not sure how much I owe for my half of bills like internet and electricity.

€135 – Miscellaneous business expenses (- €201 compared to last month)

Although I technically can (and will when it comes time to do my taxes) classify expenses like rent and utilities as business expenses, I keep them separate for the sake of this exercise. Let me break down the total here a little more:

€186 – Groceries (- €47 compared to last month)

“Groceries” accounts mostly for food, but also a few miscellaneous items I pick up at the supermarket, like toilet paper. I expect this expense might rise a bit next month as I make a conscious effort to shop less in big faceless Tesco’s and more in small local stores.

€84 – Pubs, coffee shops, restaurants, take-aways (- €27 compared to last month)

€25 of this was spent at a fancy Italian restaurant one night. The rest is mostly meeting people for a chat in a pub, coffee shop or restaurant. Remember that I’ve given up alcohol so I spend next to nothing on a night out.

€53 – Miscellaneous personal expenses (+ €22 compared to last month)

€21 of this accounts for three trips to the Mayfield gym. The rest was spent on four new shirts and a belt. That puts the possession count at 62 ;-)

€98 – Education (+ €79 compared to last month)

I’ll break this one down, too:

  • €36 – Amazon.com gift card (for myself, explained further down)
  • €36 – Sean Ogle’s Overcoming the Fear of Uncertainty course
  • €14 – Toastmasters guest fees (3 meetings, 2 different clubs)
  • €12 – Travel Hacking Cartel monthly payment (not yet sure of the value here)

€18 – Entertainment (+ €2 compared to last month)

This accounts for trips to the cinema, theatre, museums and sporting events. In February I went to the cinema twice (Black Swan and True Grit) and also paid €5 into a comedy gig in Cork.

€1046 – Travel (+ €1036 compared to last month)

Balls. Travel expenses killed me this month. Here’s the breakdown…

  • €564 – Return flights from MAD-JFK for the World Domination Summit in June.
  • €376 – Return flights from JFK-PDX for the same thing.
  • €72 – Advance payment for hike with some legendary people after WDS in June.
  • €20 – Bus from Cork to Waterford (I saved a bit by hitchhiking back)
  • €14 – Local bus fares (7 trips)

€3 – Donations (- €1 compared to last month)

This consists of the odd Euro given to buskers, and the occasional homeless person. Not accounted for is the spare change I usually throw into coin boxes around town (I try not to keep any change below 50c).

€18 – Banking fees (+ €18 compared to last month)

I got screwed out of €17 here because I booked my WDS flights on my Amazon.com credit card and they saw fit to charge a foreign transaction fee. I won’t be making that mistake again.

€13 – Unknown (- €14 compared to last month)

After figuring all that out, I have €13 unaccounted for. I may have forgotten to make note of something, or perhaps my calculations are a little off.

Total expenses for February: €2,034

That works out to €509 per week. Minus the WDS expenses (flights and hike), I’m down to €256 per week, which is still above the estimated weekly expense total of €230 that I mentioned in a previous post. Living frugally is proving to be more difficult than I thought.

February earnings

€1650 – Web design (+ €1650 compared to last month)

A whopping €1600 of this comes from building my brother’s website, AJD Stairs. There’s still a €500 bonus due to me if I can work some SEO magic.

The other €50 comes from doing a little maintenance work on my aunt’s business coaching website.

Thank feck for family :-P

Web design work is a nice fallback for me if I get stuck and need some money, but I’d rather generate income from my efforts on this site, and also through consulting and affiliate marketing.

€50 – Consulting (+ €50 compared to last month)

I spent a couple of hours earlier in the month advising the Whazon folks on social media strategy and content syndication. I was happy to help them out, since I love what they do and hope to see them create a stronger presence online.

€36 – Credit card bonus (+ €36 compared to last month)

My Amazon.com credit card racks up some decent points which entitle me to a nice reward every now and then. I cashed in 5,000 points in exchange for $50 of statement credit, then went ahead and bought myself an $50 Amazon.com gift card, which I listed under Education in earnings above. Essentially those two things cancel each other out, but I wanted to list them here to be thorough.

€6 – Affiliate earnings (+ €6 compared to last month)

Someone (thanks, whoever you are!) bought a copy of Everett Bogue’s The Art of Being Minimalist through my affiliate link, so I got half the sale price. Ev’s ebook has since been taken off the market. I believe I sold just three copies of it altogether since becoming an affiliate last summer.

Total earnings for February: €1,742

Minus 20% put aside for tax: €349

Leaves me with an income of: €1,393

A quick note on the above: I’m intentionally going over the top by accounting for 20% tax. It will never be that high since I’ll have a certain amount of tax free allowance and I can write off a lot of items as business expenses, but I like to put aside that little bit extra just to be safe.

Where that leaves me

Taking into account all my February expenses, earnings and taxes, my total bank and cash balances now work out to €7,814.

A quick summary of how I’m doing so far this year:

  • - €1,173 in January
  • - €641 in February

Outlook for March

Honestly, I’m a little disappointed by how I fared in February, and without another big €1600 paycheck coming my way it will be tough to earn more than I spend in March. I do have my online course launching on the 17th, but I’ll be restricting access to that initially and so it won’t put much money in my pocket this month.

I’ve also been working through Corbett Barr’s affiliate marketing course and I’m putting the finishing touches on my first affiliate site, but I’m not counting on that to bring in a lot of money right away. The consensus seems to be that you need to build at least three or four affiliate sites before everything starts clicking and you see some good returns.

The good news is that I don’t foresee too many big crazy expenses in March. The biggest dent will probably be prepaying for my accommodation for the World Domination Summit. I’ll be in Portland for a week in June, so I’ll need a place to stay. Luckily, Mr. Guillebeau has arranged for summit attendees to get a nice discount price at a local hostel, so I’ll try to take advantage of that.

Feedback

Let me know your thoughts on these reports. Do you find the info helpful? Would you like more detail? Less? If you’re self-employed yourself, I’d also love to hear about your financial adventures.

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  1. The money you’ve got in the bank will keep your head above water for a good few months yet (6-9?) whilst you try to get the income rolling in, so no worries there just yet.

    Just keep chasing your dream, I’m sure you’ll make it work.

    p.s. Thought anymore about that donate option? I’ve got a few €’s with your name on them ;-)

  2. Hi Niall,

    If you’re planning to keep that US bank account maybe you should consider to use a fixed exchange rate (I mean, the Jan11 rate for all 2011) in order to have a better view of what you’re doing…I would do that, I guess. I don’t know how much of your profits/losses are explained by the rates.

    • Hmm, interesting idea, Álvaro. That would help keep everything consistent from month to month. My concern though would be the exchange rate shifting a lot over the course of the year, so I might get to 2012 and find that my dollars are worth way less (or more) than I thought they were.

      I think as long as I adjust my total cash and bank balance at the start of every month, I should be fine. It’s not so much the final figure that’s important here anyway. I mostly want to share info on how much I’m earning and spending each month, so folks can see how long it takes me to start making a monthly profit and how I get to that point.

  3. Hi Niall,

    I support in your not being sure about travel hacking cartel value for non-americans.

    I cancelled my subscription not waiting 3 months to claim the guarantee.

    I plan to rejoin it in future when it will be of more worth.

  4. I’d be interested in learning how your plans of financial independence go since I am planning it myself. However you are maybe a year ahead of me right now lol.