When you made the decision to commit your career to writing — be that journalism, fiction or freelance writing — you undoubtedly garnered some snide comments from people who doubted your capacity to earn an income. Writing is a crucial element of modern life; it is impossible to go even one day without encountering the written word, usually in a format that necessitates a professional writer. Yet, despite its essentialness and its prevalence, writing isn’t typically well-paid, especially in the early years of one’s career.
You can be a successful writer, and you can build wealth, too. However, you do need to make a money management plan — and the following tips will help with that.
Track Your Expenses
No matter what you do and no matter what your income, it is always wise to start your journey through personal finance by tracking your expenses. When you are self-employed, as you likely will be in a writing career, it is especially important to track your expenses, so you can differentiate between costs associated with your job and personal expenditures.
You can get a good sense of your regular expenses by tracking your spending for two months, but you should be aware of annual or biannual expenses that might not fall in your tracking window, like car insurance or registration fees. You shouldn’t try to modify your spending at first; your goal initially is only to observe your spending and take note of where your money is going. Then, when you build a budget and begin to manage your expenses more closely, you can limit and eliminate various types of spending with greater accuracy. It is wise to use some kind of budgeting software to track your expenses, if only so that the information is in one convenient and organized place.
Set Goals for Income
Getting started in a writing career is extremely difficult, and it could take a few months (if not years) before you are able to live on the income you make from writing. Still, you should hold yourself to a high standard and expect to generate some income from your endeavor. Just as small businesses set timelines for net income that increase over time, you should slowly but surely raise your earning goals through the months, as you gain more familiarity and stability within the field.
Setting goals for income can be difficult if you have no sense of what writers in your intended field typically earn. You might need to research your field, finding beginner-level incomes and income from more experienced writers. You might also consider reaching out to established writers in your desired field to ask about where they found work and how much they made when they first got started.
Regardless, you always want to maximize your time — or do the work that makes you the most money in the least number of hours. By taking jobs that pay more, you will increase your income and get on a surer path to financial stability and career freedom.
Fill Your Emergency Fund
The income from writing tends to be more than a little inconsistent, so you need a healthy emergency fund in place — ideally before you launch into your writing career. An emergency fund is supposed to be an accessible account filled with enough money to cover between three and six months of expenses, or else contain between three and six months’ worth of income. You are supposed to dip into your emergency account only in the direst circumstances, like a total lack of income for a month or a serious expenditure like hospital bills. If you didn’t fill an emergency account before jumping into the writing profession, you need to ensure that filling your emergency fund is a top priority for your budget.
Separate Personal and Business Accounts
Though writing isn’t a high-cost profession — unlike, say, real estate sales or glass blowing — you will have expenses related to your career, like your laptop, office space, online marketing and more. Your financial situation will be much better organized if you differentiate between writing expenses and personal expenses by using different accounts and payment cards between business and pleasure. Then, when tax time comes around, you only need to look into your business accounts to add up your business-related deductions and calculate your tax owed.
Not everyone can write, and writing is so valuable in this day and age that you can make a career out of your writing skill. As you become more successful as a writer, you might want to take advantage of a professional financial advisor — especially a tax accountant — to keep your finances healthy. Until then, you should be able to survive and thrive with the above tips.