Week 1 - No Debt New Car Savings
This is the first week of my mission and today I opened a savings accounts at a totally new bank. For me to be fiscally responsible, I need the out of sight, out of mind mentality. Instead of opening up an account at my bank that I normally bank at, I decided to open up a new bank account at American Express Personal Savings (not their credit card). Although I’ll see this account each week, it isn’t part of my normal savings account, so I don’t really see the money on a day to day basis. It doesn’t pay as much as my savings account, but I’ll take the difference in interest for the out of sight, out of mind. Plus they don’t have an app which makes it even less likely that I’ll check on it each day.
I do things weird, really weird. I opened two accounts. No real reason, I just wanted the separation from an identity standpoint. The way I am taking my gig money and separating it all out looks something like this:
- Mileage Reimbursements
- New Car Savings
The mileage reimbursements are actual reimbursements I pay myself for every mile I drive. This is based on the standard IRS deduction. At the time of this writing the standard reimbursement rate is $0.58 per mile. This money should go to gas, repairs, and maintenance of my car, but I’ve decided that I will be willing to pay for all of this out of my pocket in my normal budget.
The new car savings is 40% of the new profit of my week’s earnings. Basically, I remove my mileage reimbursements and expected taxes from my total take from my gig money and whatever is left I take 40% and save that towards the new car.
Where is the rest of the money? The other buckets include: Credit Cards and Charitable Giving. At the end of the day, not every dollar earned is going to the new car fund (respectively the mileage reimbursements and the new car savings put together).
Now that the basics are covered, what happened in the first week. Well, I didn’t have school, so I was able to work, work, work, work. I was able to earn just over $550.00 and the first week’s savings were as follows:
Mileage Reimbursement: $198.38
New Car Savings: $ 68.56
Total New Car Fund: $266.94
At this rate, it will take about 21.4 months to get to $25,000. It’s important to understand that this was the first week. The real question is whether or not this will be consistent over a long period of time and I don’t think that might happen because as the popularity of gig economy money gets into more and more people’s head, the market is going to get more and more saturated and it will be tougher to actually make money in this gig economy because there is only so many orders to go around and these gig economy companies are willing to hire as many people as they can.
My goal for this mission is at least $25,000, but it’s a moving target to be honest. $25,000 will get me to where I need to be and hopefully when I get to $25,000 I am able to put it off to the sidelines until my Honda Civic goes kaput (which hopefully is after I’ve reached my goal).
As of 12/30/2018 my fund stood at $266.94 and I am $24,733.06 away from meeting that goal. The blogs won’t be as long as we go further and further into this mission because…well…I am just going to update numbers. But I hope this gives you some inspiration in trying to become financially free.