Working to Budget

When you have a regular job, you set your budget by asking what you can afford based on the money you make each month. You ask the question “What can I do with X number of dollars?”

Many freelancers do the same thing. They count their money at the end of each period and figure out how to pay their bills with what’s in their bank account. This is a mistake.

Entrepreneurs are aware of their real-world bottom line, but they don’t plan based on that. Instead, they make financial plans based on what they need to do. They ask the question “What do I need to do to have X dollars by Y date?” It doesn’t take online
accounting degrees
to know that much.

This may seem like a subtle difference, but it’s a huge shift in focus. As a freelancer, your potential income is limited only by your willingness to work and your ability to find assignments. You literally decide how much you want to make. If you make as much as is easy, then tailor your budget to that number, you’ll do okay. But you’ll never expand your writing business to make the money you want.

Try this experiment when you have fifteen minutes to spare:

1. Calculate your hard monthly expenses: the expenses you can’t change. These are things like your mortgage, car payment and insurance premiums. Be sure to include taxes for your self-employed writing business.

2. Estimate your monthly soft expenses, called “variables” in business. These change monthly, and you can impact them through planning and discipline. Groceries and utilities are examples of this.

3. Total those two numbers to figure out your monthly expense base.

4. Add to that total any other payments you’d like to incorporate into your “monthly nut,” for example increased retirement deposits, equity payments on your mortgage or a travel savings account.

5. Add a monthly “fun budget” equal to how much you would like to spend each month on yourself and our family.

6. Multiply the total by 110% to account for emergencies and overruns.

7. Compare that amount to how much you make, on average, from your writing. Add in additional income such as a spouse’s salary, rent payments or retirement income.

8. Determine how you’ll make up the difference. This might mean writing more articles for an existing client, bringing in ad revenue on a blog, landing a book deal, or finding a new client.

9. Make your plan for getting the assignments to make your list from step 8 happen (more on that in another post).

The key here is to change your perspective about the income from a writing business. The best entrepreneurs don’t live with the results that happen. They make the results they want. That process begins with a realistic look at what they accomplish their goals. To run your writing as a business, that’s the first step in creating the life you want.

I dare you to take that step, and to comment based on what you discovered.

Thanks for listening.


TPS Report

Alas, alert readers will have noticed a paucity of posts in the past fortnight. As they say in the military, I was OBE — Overcome By Events. It was in a good way, enjoying the last weeks of summer with my family. That and a road trip to my favorite martial arts event of the year.

In terms of accountability, I’ve managed to keep up with my earnings quota. That’s about it. My speculative work and blogs took a hit. And keeping up with the earnings required some late nights and fast typing.

Really, this speaks to the importance of working ahead. As I mentioned in an earlier post, accumulating a buffer of work for vacation and sick time is one of the first things a professional freelancer should do if he wants to stay professional. And I did that.

I just didn’t do enough of it to keep up with the fun-filled demands of having my wife and kids out of school for three months.

The lesson here is about planning. If I had planned better, had more realistic expectations, I could have built a larger buffer during the weeks I was home. As it was, I had to scramble and postpone.

Not everybody can learn from other peoples’ mistakes. Hopefully, this post can help you do that in this case, at least.

Thanks for listening.

Friday Fun: John Scalzi on Scifi

John Scalzi is one of the rising stars of the science fiction universe. His Old Man’s War series and hilarious The Android’s Dream have been top sellers for years.

In an example of how to increase your publicity as a writer, Scalzi contributes scifi columns to AMC’s web site. He covers movies and geek culture. Check it out for fun, then imitate it to succeed.

John Scalzi – Does Your Favorite Sci-fi Movie Do Right by Its Female Characters? – Feature.

April Moore on Research, Part Two

Here we have the second half of what April learned while researching her upcoming nonfiction work: Folsom’s 93.

Rockin’ it old school


As much as I love the convenience of internet research, nothing compares to having a desk full of old documents, letters and photographs in front of me. I spent a couple of weeks at the state archives in Sacramento over the course of two trips and nothing brings out the history nerd in me more than going through boxes of documents. It also adds so much to your writing—you can describe your experience. I held hand-written letters from condemned men; their last correspondence before facing the noose. I sifted through telegrams and transcripts that told me more than any newspaper article or book ever could. Take those personal experiences and incorporate them as much as possible into your writing—they will make for a richer and more dynamic story. Depending on what you need, contact a state’s archive department or library. Many records are public knowledge and are just waiting for you to discover them.


Schedule a field trip


Field trips aren’t just for kids; they’re for writers, too. How else will you be able to get an accurate account of the scene, atmosphere, and surroundings? My second trip to Sacramento led me to a tour of Folsom prison and even though the book spans 1895 to 1937, seeing the prison and getting a lay of the land was critical. Investing in a field trip is truly that: an investment that will pay you back two-fold. It adds a new perspective to your writing and shows you are a professional and serious about what you’re writing.