How Much Money I Made in 2020
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I finally took a look at all of my numbers and it turns out that I made a grand total of drumroll please...$139,047.
That is insane!
I was so inspired by Investing with Kim, I wanted to share with you how I earned that money and how it broke down into my income, my expenses, and my savings.
Before we get into all the money details, if you enjoy learning more about my journey to financial independence and early retirement at 35, be sure to subscribe to my channel so we can talk more money, honey!
To preface this all, I wanted to share with you that this has been such a journey to actually make $100K. It did not come out of the blue. I have been working for 8 years now! If you want an actual timeline and history of my salary, feel free to check out my timeline salary video.
I share my actual numbers in the hopes that we can be more transparent and break down that taboo and stigma of talking about money. I want to show you this is attainable if you work at it. It doesn't come easy but you too can earn this kind of money as a designer.
Income
To start we have my income. The majority of that money came from my paycheck and this is my nine to five job. I work a 40-hour week in tech as a visual designer. I actually started in March of 2020 so this paycheck is reflecting that amount. If my contract extends throughout the year in 2021, I should be on track to make closer to $120,000. That is with $58/hour pay and that is actually a mid-low end rate. I might try and negotiate that, we'll see.
To make up for the difference of not working 40 hours in January and February this year, I freelanced. So that $19,560 I made design freelancing. To be honest I got burned out freelancing this year. I think the combination of doing a visual design job during the day and then having to do visual design at night was not fun. I'm not taking on any freelance design work in 2021, but for 2020 that definitely helped cover the difference in the months of January and February where I was not working fulltime.
My income should stay about the same for 2021 but all $120,000 will come from my 9 to 5 paycheck hopefully...at least that's the plan. I say I'm never gonna take on another freelance client and then sometimes stuff pops up. It's really hard to say no to money when you're still trying to be financially independent... I'm gonna be honest.
$3,603 came from resale. That includes things like Poshmark, Facebook Marketplace, Offerup places like that, where I was selling my clothes or furniture second hand. It takes a lot of effort to resell things—coordinate pickup times, go to the post office, etc. I haven't really been putting a lot of effort into my resale businesses, but I will say it has been easiest during the pandemic to coordinate like Facebook Marketplace pickups because people can drop by and obviously most of the time we're home. So I think 2021 will still be a really great year to keep reselling all the stuff you don't use or need and make a quick buck.
Dividends this year I made $2,895 worth of dividends. That is crazy to know that my money has made me money in my sleep. I didn't do anything! All I did was invest. Most of my stocks are in a total u.s stock market fund (SWTSX) and the dividend payouts, especially in December, are through the roof. In 2021 my Schwab account is projecting that I'm gonna make closer to $3,000 in dividends. That's an additional $200, but will probably be a little more than that because I'm going to be continuing to invest in SWTSX throughout the year.
In rewards I made $2,732. Rewards I think of as credit card cash back. I have the Citi double cash back card that gives me 2% cash back on regular spending as well as Ebates (now Rakuten) I get cash back for shopping. Stuff like that is in my rewards category. You can see all these little two to 3 thousand dollar things I'm doing adds up to like $10,000. Every little bit counts!
Then I have about $2,000 in gifts received. I'm very fortunate in that a lot of my aunts, uncles, and family members give me financial gifts. I think it's pretty common in the asian culture that instead of presents you'll get actual monetary gifts, which I think is really great and useful because you can put that towards things you actually care about and actually want. Sometimes physical gifts are not things you necessarily want and it ends up as clutter in your room, so I'm really grateful that my family has the ability to give me that. Because of this, I am able to buy the gift that I want, which is time eventually.
This year I put in the income category “government.” We had two stimulus checks so that money went in there, plus my tax refund, so $2166 in total. I don't really know if it's considered income...would you consider it income? Anyway, I'm considering it as income. So again this is the two stimulus checks that I received. I didn't get the full amount because I was in the phase out period. If they do come again for 2021 I will probably not get any stimulus checks due to my income level this year, which is totally fine. And then also this includes my tax refund, which in 2021 I will owe taxes for the $19,560 in freelance work that I have not paid any taxes on yet. I will definitely owe!
So in 2020, I started taking my Millennial Money Honey business more seriously this year. I opened an Etsy shop and was open to doing brand partnership opportunities. I haven't really earned a lot from Millennial Money Honey. I'm hoping to earn more in 2021, but in 2020 I earned $340.
In interest, which is why everybody should open a high yield savings account (HYSA) if you don't already have one, I earned $173 off of my HYSA. I use Ally! If you are still banking with Wells Fargo, Bank of America, etc., you've got to go open a high yield savings account. If there's one takeaway from this video, you need to go open a high yield savings account to keep your emergency fund and savings in. It’s not a ton a ton of interest you’ll make in the grand scheme of things, but it's definitely not nothing.
So as you can see in my income breakout chart, 75% of my income is mostly from my paycheck and the other 25% is all the other little stuff. Again, every little bit counts it really all adds up to be a whopping almost $140,000.
Expenses
On to my expenses! So expenses I actually did not spend that much this year. Minus taxes, I spent close to $14,000, which is relatively nothing because I decided to move back in with my parents this year. It made a ton of sense for me and obviously gets me closer to financial independence quicker. So because of that my expenses were relatively low this year.
I was adding everything up and I could not for the life of me figure out where $20,000 of my money had gone. I kept thinking and looking. I knew I didn't spend $40,000 this year. I had only documented $14,000 in spending, so I couldn't figure out where my money had gone. And then I realized, “Oh my God, it went to Uncle Sam!!!!” I realized I had paid $26,000 in taxes that I was not accounting for in my flow. I put it under expenses because it is like a price you pay for working, a fee of earning money of sorts. It is what it is. 65% of my expenses are taxes right now.
House was $4,450 in rent payments. I was still paying for housing from January through May, so that's kind of where my housing expenses were. Still relatively low, but definitely not nothing.
Gifts that I gave were $1,775. This includes donations to local food banks, the World Health Organization, and towards causes supporting the Black Lives Matter movement.
Work expense of $1,684 includes stuff for my freelance design business. I pay for a subscription service to help me manage all of my clients and stuff called Hello Bonsai App. It sets up payment invoicing, contracts, you name it. It makes you look so much more professional if you're a freelance designer. Highly recommend it! Work also includes like a desk things like that that like really I needed as a freelance digital designer.
Food expenses were $1,510. I categorize food under eating out. I have a separate category for groceries.
Travel this year was really low at $1,429. I did rent out a cabin for my 29th birthday so that is included in travel. I also did a camping trip with friends. We were outdoors and could be socially distant!
Since I was freelancing in January and February and my insurance didn't kick in until April, I was paying for health insurance for like 4 months. So $878 falls under that Health category.
Shopping I actually spent a lot more money than I thought I was going to spend this year. I was actually planning on doing a no spend year, which I share a how I've done that in this video, but this year I actually spent around $700. I bought a pair of hiking shoes and little things that kind of added up. At $705, I'm still really proud of that number, but yeah definitely I saw that number I was like oh didn't know what I spent it all on exactly. I guess it’s only $700 for the year, so I'm gonna give myself a pass.
Car includes gas, maintenance, etc., $622. That has definitely dropped down a lot because we have been working from home, no need to drive everywhere.
Utilities were $511. Again, I only paid those from January to May.
Groceries were $4125. I try to buy groceries for my family periodically since I’m not paying any rent living at home.
Entertainment was $242. I'm not really exactly sure what I counted as entertainment...I have no idea. I need to go look at that.
Drinks were $117. Guess I was going hard in January and February and living it up!
Then transportation was $82 and that's Ubers and parking and stuff. I'm so curious as to what I spent in the past. This is like the first year I've done a full year of tracking my expenses so I really don't know how much I've spent on Uber's in the past but this year has definitely been the least in like the last 5 years. My friends and I used to go out multiple places a night and multiple nights a weekend back in the day.
In total I spent $41,128 and if you take out taxes, I spent $14,606—definitely a huge difference. I think you have to factor taxes as an expense because it shows you the full picture of where your money's going.
Savings & Investments
So this is my savings and investments for 2020. My brokerage account alone has grown so much like at the beginning of this year with something like $30,000 at the beginning. Now I'm above the six figure range between my contributions and then the stock appreciation. I contributed $58,213 to my brokerage.
I was able to max out my 401k for the first time this year! That was really exciting. So I contributed the full $19,500 as a single young woman.
For checking and savings, I didn't really end up keeping that much cash or adding any cash to my emergency funds because I am living at home with my parents this year. I felt like it was okay to drop my cash reserve a little bit lower this year. So for checking and savings yeah I only put like $14,000 into those accounts to cash flow all of my expenses. So since I spent $14,000, I only kept what I needed to spend and then invested the rest.
My IRA, which I kind of had some complications with and my tax guy is sorting out now, but I contributed $6,000 to a traditional IRA this year. I re-characterized it to my Roth IRA and there were some pro rata complications. I definitely recommend consulting a tax professional because as much as I tried to like read blogs and do it myself, I still messed up. Having a CPA help me with my taxes and help me file in 2021 for 2020 gives me such peace of mind even if I have to pay like $1,000 for it. Honestly, my sanity is worth it!
In total, I saved $97,919—the majority of that going into my brokerage. Again I maxed out my 401k and IRA first and then whatever was left over I sent straight into my brokerage account.
So that's what I did with my $139,000 income this year! I'm so excited to share more numbers with you in 2021. If you enjoyed this video and want to see more, be sure to hit the like button, subscribe to my channel or to the podcast, and let's talk more money, honey!
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