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• I worked hard in 2023 but found I earned less as a freelancer than I did the previous year.
• For 2024, I’m going to start by scrutinizing areas I can cut back.
• Then, I’m going to fine-tune my savings strategy and make a plan for savings I already have.

I have my own small business and do my bookkeeping every month, so I’m intimately familiar with my finances and I know that I made less money in 2023 than in 2022. It’s not a mystery to me and also I know where I fell short; the numbers don’t lie.

What’s hard to understand is that I feel like I worked just as hard, if not harder, this year. Nearly all of my expenses went up this year, most of them unavoidably, due to inflation, so there will be some necessary belt-tightening for me in 2024. However, I also have some funds that I’d locked away in a Canadian government bond called a GIC that become available to me in January, along with the interest they earned.

With mortgage renewal on the horizon, a big move that I’m planning, and an unpredictable work year ahead, here’s my approach to being better with money in the upcoming year.

1. Determine if and where I can cut back

Nearly all of my bills increased substantially in 2023. I bought my first car, and as a new driver, my car insurance is very high. I won’t even mention the ever-rising cost of food! I’ve been doing my best to keep my costs down, but I’m going to look very closely at my spending in 2023 and see where I might be able to cut back, perhaps on memberships, or dining out, for example.

I upped my business-related spending in 2023, on my accountant’s recommendation, so I’ll soon find out how much this saves me on taxes. That’s another big piece of the puzzle, of course. It doesn’t make sense to cut back on business-related expenses that help me do my work and grow my business, especially if those investments improve my finances in the long run. It’s a balancing act.

Over the next few weeks you can find me, fine-tooth comb in hand, searching my spreadsheets for unnecessary expenses to trim.

2. Establish a process to better manage fluctuating income

I have a few auto-payments into savings accounts set up, including regular monthly contributions in fixed amounts to house repairs, car maintenance, and “fun fund” high-interest savings accounts. Based on my decreased earnings and increased expenses in 2023, I’ll likely need to adjust the monthly amounts I contribute to these savings accounts.

Additionally, I may look to open two additional savings accounts: one to help me pay my bills when I have a leaner month and/or when clients are late paying invoices, and another one to start saving for a likely higher mortgage rate when I renegotiate my mortgage in 2025.

I plan to work with my financial advisor to create a structure that will work for my fluctuating income. I now have 2.5 years as a freelancer under my belt, so I have a sense of the peaks and valleys. I’ll use that data to inform the adjustments I make in 2024. I’m starting the year right: January financial planning sesh booked!

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3. Make a plan for how to spend, save, or reinvest maturing funds

My GIC that’s been been locked away for the past five years is coming to maturity and I’ve been semi-passively thinking about what to do with those funds. I’ll work with my financial advisor to determine how best to manage this money.

I’m planning another move in the next two to three years, so some of this money may well go toward saving for unexpected repairs (I love an old house), putting money aside to fund the move itself, and maybe even for some projects around the house to increase eventual resale value.

I also recently had the first inklings of wanting to travel again. It’s the first wanderlust I’ve felt since before the pandemic hit. I’m considering using only the interest earned on my GIC to visit friends in Europe and rediscover a love of travel that’s been dormant since a now-infamous trip to Morocco in 2019. I’m ready to heal my past travel wounds and need to get my money sorted to support my next adventure.

This year is a big puzzle I’m slowly putting together. While I achieved a big financial goal of mine in 2023 (buying my first-ever car and getting my license), I also earned less money than in 2022. I want to be thoughtful about my financial planning for 2024 and ensure that both the time and the money I spend ultimately lead to an improved quality of life and not just more work, bills, and busyness.