Finance and Investing Principles of Frugality and Ethics

From $20 000 to $2000 a year

  • April 23, 2015
  • 4 min read
From $20 000 to $2000 a year

How do you cope when your regular annual income drops from $20 000 to $2000? And when I say ‘regular’, I mean dividends from shares, paid to me twice a year. Which is not what I want to base my entire living on just yet.

This week I decided not to comply with the Australian government’s requirements to get my single parenting payment. My youngest child has just turned six, so according to them I should get my arse back in the workforce and must start looking for work. I completely agree, but I don’t want to look for a job. I have too many already! I could fight to stay in the system and play their game, but honestly, I don’t want to waste my time.

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So time to start making my own money. I already have a small soap making business, and am also establishing myself as a writer and a workshop facilitator. I am grateful that the government recognises the value of stay at home parents, and has supported me through the sleep deprivation years. (I would have been seriously struggling if I had to work any sort of job in the first few years.) I’ve used the last few years to set up my business, network, learn how to promote myself, get some serious writing hours in, establish suppliers and stockists, test various recipe formulations, trial different markets, and complete both facilitator training and my Permaculture Design Course. All things I could do with variable amounts of time and energy, or in short intense bursts.

And now I’ve been kicked out of my nest!

When your income doesn’t meet your living expenses (and mine doesn’t even cover my child’s school fees right now, let alone anything else), you have two options. Increase your earnings, or decrease your spending. And when your income has just fallen by 90%, you’ll be doing both quick smart!

It’s not as bad as it sounds. I have a cushion of savings, and lots of irregular income streams. But I would rather keep my cushion plump.

One thing I don’t want to do, even though I don’t have a steady income right now, is fall into a ‘I can’t afford it’ mindset. Instead, I ask myself ‘HOW can I afford it?’ I’m enjoying the heightened awareness of my spending – gee, I used to log every cent that went in or out. From selling gum to my sister for ten cents, to losing one dollar because I refused to let Mum comb the nits out of my hair! Below is my financial record from when I was 14 and decided to save one thousand dollars spending money for a trip to the snow. It took me two years and five months, and I nailed it!

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Having less money is giving me the chance to re-evaluate what in my life gives me the greatest joy and meaning. If a purchase isn’t going to bring me giggles, empowerment, wonder, human connection or something else I really value, I walk on by. For now, I’m choosing not to spend my money on convenience or ease; although I see this as a temporary situation. (For example, I’m putting off all new book purchases. Secondhand books only for a while. Sigh.) Once I know my basic living costs are covered securely, I’ll loosen the grip on my wallet.

Check in here next week to find out how we’re skipping supermarkets for a month!

Want to know what I’ve chosen to spend my money on in the week up to writing this post? Three things.

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$26 on cheese: good, local, handmade sheep’s cheese. $272 on a workshop: The Sacred Geometry of Love. This one is a leap of faith! I followed my heart to this, trusting that it would lead me where I needed to go. And $110 on ingredients for my natural body care business: 100 lip balm tubes, almond meal, salt, and alkanet root powder. These will make me money, once I’ve turned them into products (not a single recipe, of course!) and got them into my outlets. That’s it. What more do you need! I live a luxurious austerity.

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