How To Start Managing Your Money as a Writer
Dealing with finance is a very important subject in adult life, as all the aspects of living are kind of related to this. Learning to manage your money, especially as a writer, is a process that needs attention, with the different flow of income every month, the chances to lose control being high, and the chaos the world looks at right now.
All of the money talk related looks scary in the first attempt, but taking step by step can make it easier to learn how to control your economics, being able to incorporate this supervision on your day today. Starting your career or stable freelancer, any professional will need to deal with this at some point and it’s better to do it sooner.
Where to start
First things first, you need to see your writing as a business, because that is what it is. Having a different bank account for your business can help to control the amount of money you receive, how much goes to your personal use, or other necessities. This also helps to set financial boundaries, reflecting on how much money you spent.
Think about how you calculate your rates, do you charge by the hour or by a project done? See if the way you’re charging is the best or if you need to make changes. After this, it is good to set earning goals, depending on how much you rely on your writing business. Where do you want to go with your writing? Which lifestyle do you want to have? Those questions need to be aligned with how much you earn and will be crucial to manage your money.
As important as to set earning goals, is to set saving goals. The freelance writing career is not stable, so saving needs to be a part of your plans. Set a goal, even it’s minimal as $10 a month, to have an emergency backup or to invest in something. Besides retirement, it’s important to have some money on hand if troubles appear.
If you didn’t get into the spreadsheet phase, start it now. It can seem exaggerated to keep track of every penny you spend, but this helps a lot to see the bigger picture and know where that dollars are going. Maybe you’re using your money on a lot of things you don’t need, that spreadsheet will help to see if cuts of costs are needed. You can easily find free models of spreadsheets online or use apps like Mint to have your planning always on hand. This management can also be made on a notebook or planner if you’re a more analogical person.
Have courage
“One of the reasons people struggle financially is because they make uninformed decisions, but more commonly, they make no-decision. Financial paralysis is real.” Robert Pagliarini
It’s easy to see the amount of information related to taxes, investments, savings and do nothing about it, but this is not the best way to go with your money. As a writer, probably you will need more than one source of income to get your life right while writing, so you need to make good decisions and think about them.
Focus on deciding consciously how to manage your money, thinking about demands for the present but also for the future. If you want more time to write your novel, reflect on how the other jobs can help, how much money you need to save to get fewer jobs for some months, and be realistic.
Don’t be afraid to learn, ask, try different methods. Sometimes the financial advice given is not good for your situation, so adapt it. You probably are a writer because you love what you do, so it’s necessary to make this passion sustainable and financially healthy. What you can’t do is see this as something too hard or a thing that will muddle your creativity.
Learning to manage your money as a writer will not only make good for your life but also will inspire other people to follow this path. Of course, not everything is easy, especially in a moment of uncertainty like this pandemic, that’s why it’s important to learn to discover what suits you best. Having an organized financial life will vanish the myth of the broke starving artist, inspiring others to see that it is possible to write and also have some money for themselves.
Some resources to explore
Starving artist- This podcast has good talks with artists from different fields to understand how they manage money.
Laura Horn podcast- Laura is an abstract painter that also hosts her podcast. Besides all the painting related stuff, Laura has some good episodes about finances and dealing with the administration of your business.
“Writing Probably Won’t Pay the Bills”- This article from The Cut has a little pessimistic title but shows good advice from already published authors about how they manage money and make clear that everyone struggles at some point in life.
