More money matters for writers and freelancers

It’s not something I talk a lot about here on the blog — other than saying it’s my nebulous “day job” — but I do have some modest insight into financial matters. I used to be a business writer for The Associated Press, and my current gig is in communications for a financial services company. (My company is privately held and incredibly supportive of my fiction writing, and in turn, I keep it low key with them on here.)

There seems to be an appetite amongst the writerly crowd for thoughts on money matters — especially critical since we don’t make a lot, generally speaking, but so many of us want to ditch it all and write full time. So I thought I’d throw some ideas together that you may want to think about if you’re considering fictioning or freelancing.

Please note, though, that I am not a financial adviser, not certified as a financial professional in any way shape or form, and this does not constitute actual financial advice. These are simply my observations that may or may not be useful as you consider your own situation, which will undoubtedly vary from my experiences. In other words, just think about this stuff, and don’t sue me. Deal? Deal.

Here we go:  

Budgeting: If I were to freelance or write full time, I’d first make a budget. And I would include everything. Every cent, from my Starbucks trips to the occasional splurge at the mall. I’d take three months and write down everything I spent. Only then would I have a picture of what I spent and how much of that can be reasonably curtailed as I transitioned to writing.

Some of those expenses, like commuting to a job, will go away. The habits formed during the work week will change, and there may be savings there. But I’d probably make new habits too, like hitting up the coffee shop to write a couple times a week, or getting a gym membership when I realized writing is a hugely sedentary thing. So I wouldn’t count everything as a net gain. I’d give myself wiggle room.

Saving: Most folks recommend a minimum of six months’ expenses in the bank before taking the plunge. I’m naturally cautious by nature, and would probably do more. It also depends on whether I’d been writing and/or freelancing on the side prior to leaving the day job, or whether I was starting from scratch. Which leads me to…

Lining up work: Going in cold is probably not a great idea. If I didn’t have a book deal, or freelance contacts, or any other realistic promise of work, then I’d try to get that going before taking the plunge. Otherwise, that six months (or more) of savings may get used up before I gain any writing income. And then it’s back to the day job.

I’d also consider part-time work. It’s probably not super sexy, but it can be a nice cushion. I’d look into substitute teaching, or maybe an adjunct gig at a community college. Working at a Barnes & Noble would be my personal part-time choice. I’d put all my books and my friends’ books face out, dammit. Whatever it is, having at least a baseline bit of income every month would be a big relief.

Insurance: Health insurance is super important, even if you feel like you’re in the full bloom of health and don’t need it. You do, trust me. Fate’s fickle and will mess with you just to see you squirm. It’s easier than ever to get decent health insurance these days (Thanks, Obama), so I’d get in there and get some. Same with life insurance, car insurance, etc. I would never go without. I just wouldn’t. Of course, you could go on your spouse’s insurance, but as my wife’s already a freelancer, I’d look into buying some ASAP.

Savings: I certainly want to retire some day, so I would transition my 401(k) to an IRA or other vehicle so I can keep saving. Sure, I’d probably be able to save more some months than others, but I’d keep saving for retirement if at all possible. And a note here about 401(k)s — using that money to fund my transition to freelance writing is probably a very bad idea unless I was actually at retirement age and/or have enough to retire already. Dipping into the 401(k) at an early age will not only prompt a tax hit, but will delay my eventual retirement by years and years. Not worth it to me.

Also, I’d remember to save for other stuff. My daughter’s education, for example. She has a 529 college savings account, and I’d be sure to keep contributing as much as possible. I’d try to save for vacations, for a new car, home repairs, all of it. And I’d really try hard not to run up the credit card debt, which I admit, isn’t easy even with a full-time job.

Transitioning back to full-time work if needed: Fair or not, folks who leave the workforce for extended periods of time can find it difficult to get a full-time gig again. There’s ageism and sexism and all kinds of -isms out there that are exacerbated by large gaps in your resume. Some employers may even see a return to full-time work as evidence of a failed attempt at freelancing, and take that negatively. It’s hard out there. I’d have to be prepared to fight to get back to work if the writing thing doesn’t pan out.

Look, I get that all this sounds hard, that I’m likely too conservative for some tastes, and I may even be an outright Debbie Downer. Fine. I don’t freelance or write full time, and I doubt that I will. Actually, I know exactly how much I would like to have in the bank before I essentially retire and write full time, and at this point in my early 40s, it’s a laughably high number that would never be achieved solely through writing novels. Your mileage may vary, as they say.

There’s a certain romance to chucking it all to write full time, and I get that. Just be sure reality doesn’t bite you in the ass. Think hard about your finances and your future before you take the plunge. Talk to a professional — you’d be surprised at the resources your local bank may be able to provide. Get informed. Choose wisely.


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