Side Hustling?

One thing that I promised myself after I earned my PhD was that I would never work harder than my body would allow. My health is very precarious. I have some pretty serious health issues that affect me daily. These conditions are potentially life threatening. Fatigue and pain are major components of my illness, and if I push myself too hard, it can lead to worsening health. Because of this, I’ve been avoiding pursuing a side hustle.

I got a PhD to make my life easier. It made me a competitive candidate on the job market. I have an awesome job, with my desired employer. I’m working 9-5 and no more. My earning potential in my current position is $100,000+. Work doesn’t make my life very stressful. These are all things I knew  a PhD would get me. And I’m very thankful for that, and that was exactly my goal.

That being said I’ve been approached with a side hustle opportunity and I have accepted. The great thing is my life shouldn’t change all too much. I’m currently active in the health community mostly dealing with patient engagement. I’ve been doing this for a couple of years on a voluntary basis. A group of friends are now looking to branch out and make this a non-profit organization. But in general, it is something I’m already passionate about and already do on a regular basis without compensation.

Keeping Track of My Personal Savings Rate

One thing that I didn’t do a good job of last year was keeping track of how much I was saving and spending month to month. Because of this, I was unable to determine my personal savings rate, or the percentage of income saved.

I am now outlining my budgeted expenditures in all of my net worth updates.  And while, I don’t directly mention how much I save, I can extrapolate this number by looking at my goal progression.

In order to calculate my personal savings rate I take the following steps:

  1. Calculate the amount of income saved
  2. Determine total income earned
  3. Divide income saved by total income

When I do this, I get a savings rate of approximately 45% of my gross income. This is for the first 2 months of 2017. This is quite a bit higher than I was expecting, but I did have three paychecks in January and  received a tax return.

I live in a city with one of the highest costs of living in the nation.  I make enough money to live comfortably, but I’m pretty far off from a six-figure salary.  Given that I live by myself, due to my health condition, I’m pretty happy with this savings rate.

As a statistician, I like graphs, so I broke down my spending a bit further to better illustrate my savings and all other categorical expenditures. As you can see, most of my income goes towards taxes and deductions, rent, and my 401K contributions.



I know some calculate the personal savings rate based on net income, which is defined as gross income minus taxes. If I were to use net income my savings rate jumps to 60% so far in 2017.

Personally, it’s easier for me to use gross income. Additionally, since I will be paying taxes in retirement, it doesn’t really make sense to look back on net income statistics. For example, knowing that I saved 27% of my gross income towards retirement tells me I could most likely live comfortably on 75% of my current income in retirement, even if it’s taxed.  The fact that I contribute to a Roth IRA should shelter me from some of the tax burden, but I’d rather overestimate the money I need as opposed to underestimate.

Net Worth Update – February 2017

It’s number time!

Liquid Assets Jan-17 Feb-17 $ Change
Cash & Savings $1,200 $1,425  +$225
Emergency Fund  $2501 $3,009  +$508
Short Term Savings $75 $300  +$225
Long Term Savings $43 $144  +$101
Other $303 $0 ($303)
Illiquid Assets Jan-17 Feb-17 $ Change
Brokerage $197  +$197
Savings Bonds $500 $1,315  +$815
Retirement Accts Jan-17 Feb-17 $ Change
Roth IRA $12,824 $13,600  +$776
Traditional 401K $13,126 $15,364  +$2,238
Liabilities Jan-17 Feb-17 $ Change
Medical ($100) ($0) +$100
Net Worth $30,472 $35,353 +$4,882
% Change +16.0%

My net worth increased by close to $5,000 this month!

The increase was mostly due to my tax returns. I’m not aiming for a sizable tax return next year. I only did so this tax season because I knew I’d be tempted to dip into my emergency fund during my first year of work. So I let Uncle Sam hold onto my emergency fund. Now that I’m through the rough year, I won’t have to resort to such measures.

I love how my net worth went from $20K  to $25k to $30K over the past 3 months. It was a good run, but I don’t anticipate on keeping that momentum going.

Goal Progression:

Fund/Goal Contrib. Total  Goal Progress
401K $1476 $2,510 $18,000 13.9%
Roth IRA $398 $1,219 $5,500  22.2%
Emergency Fund $1,323 $4,324 $5,500  78.7%
Vacation Fund $225 $300 $500 60.0%
Vanguard Fund $101 $144 $3,000 4.8%
February Stretch $- $6,390 $5,570 111.1%

I’m on track for meeting all of my goals, and I’ve started two new ones. My vacation fund is in my short-term savings account and my Vanguard Fund  is in my long-term savings account. My vacation funds need to be accumulated by April. I have no specific timeline on my vanguard fund.

Oh and I surpassed my February stretch goal of having $5,750 in liquid and illiquid assets.  I even met my March stretch goal.  Using my goal post trajectory, I also surpassed my April goal.  This allowed for my vacation in April which was a spur of the moment decision I did not budget for.

So how did my budgeting go this month?

Category Budgeted Actual Remaining
Rent $1,650 $1,650 $0 left
Fixed Expenses $100 $146 $46 over
Medical $- $73
Food $200 $163 $37 left
Everything Else $315 $286 $29 left
Total  $2,265  $2,252 $20 left
  • Rent: I paid the usual: a lot. I choose to live close to work.
  • Food: I was $37 under my food budget!
  • Fixed Expenses: I went over $46 because I decided to trial Sling TV (not keeping). I also kind of wanted the Roku that came with the trial.
  • Medical Expense: While I don’t budget for medical expenses, I finally received a medical bill that was long anticipated.
  • Everything Else: I gave myself an extra $65 to spend on “Everything Else” due to $65 extra income. Notables for this month include purchasing 4 plane tickets for 2 vacations and also partially funding a hostel stay. Thanks to credit card rewards I didn’t spend a whole lot on any of this.

Even with the overage in the Fixed Expense category I still managed to come $20 under my budget.  The $20 has been transferred to my long-term savings account.

March should be another straightforward month. April may be a bit more interesting since I’m going on my first vacation. This is a 10-day international trip. I would love to keep my spending on this trip under $500, but I think $750 may even be a stretch. We will see!