The issue of finances plagues many writers, especially freelancers who have to set aside money for taxes, health insurance, retirement, and office expenses that would be covered by a traditional employer. (Unless said writer has a significant personal nest egg or a wealthy spouse.)
The stress can drain a writer’s reserves of energy. Will that check come in time to pay rent next month? Have I saved enough for my taxes?
For me, March and April used to be the most stressful. That was when I tried to figure out how many thousands of dollars would soon fly out the door en route to Uncle Sam. And that second estimated tax payment always sneaks up way too soon, on June 15, just 2 months after tax day.
Back in March 2010, during one of these stressful periods, I bought The Money Book for Freelancers, Part-Timers, and the Self-Employed. I wasn’t completely flying by the seat of my pants in those days — I had savings accounts for my taxes and retirement. I even had an emergency fund. But those accounts often scraped bottom, usually when I was waiting for a big check and had a big bill looming. I never felt organized or secure that I had enough money to pay my bills.
Both authors, Joseph D’Agnese and Denise Kiernan, are freelance writers. They admit to many of the same mistakes that I made early in my freelance career, like not saving enough for emergencies or taking on too many financial responsibilities at once. The beauty of this book is that they share practical tips for how to get finances on track, from paying off debt to keeping enough in the coffers for dry spells.
Their system is easy and based on good old-fashioned common sense: percentages of each paycheck go into dedicated accounts, so I don’t accidentally spend the money for my taxes on a new computer or a vacation that I didn’t realize that I couldn’t afford. Basically, as a self-employed person, I do what an employer does by taking chunks from a paycheck before it ever hits my bank account.
I can adjust the system to fit my needs and expenses, and so can you. (For example, I have an account where I save money for vet bills. I have two 14-year-old cats, and unexpected vet trips have thrown my best-laid financial plans into a tailspin more than once.)
It took some time, but this book changed my financial life. Once I understood how much money I had available, I knew when to cut back, how much conference travel I could afford each year, and whether I could afford an iPad. My emergency fund gradually grew large enough to cover expenses if checks didn’t arrive when I expected them. I gradually paid off my credit cards.
That doesn’t mean I never stress about money, of course. But I stress about it 90% less than I once did. And that peace of mind is truly a gift.