Rachel Werner
Financial Literacy for Freelancers

the bookish brand

 

Folks in creative careers often struggle to talk about money. How much they are currently making—or one day hope to—are conversations many writers loathe to have. But as far as I am concerned, ‘the starving artist’ is a myth that should have been canceled long ago. It is difficult to revise a manuscript when one is constantly struggling to pay the bills. How about trying to finish a poetry collection when you can’t afford groceries this week? Not easy tasks. And earning enough money is just the first hurdle. Because in order to continue to grow artistically, financial resiliency is a necessity that far too often gets overlooked until it is too late. 

No matter how successful a creative career may be, if the income it generates isn’t being managed correctly, one’s ability to pursue more lucrative endeavors in the future will be limited. Because the saying “It takes money to make money” doesn’t just apply to those coins you’ve yet to earn. It also influences how any profits we are already pulling in can be utilized right now to forge a path toward more financial flexibility. Plus no matter the scope of your goals, the minute you start being paid for writing or editing, you are operating a small business—and should be putting your dollars to work wisely.

What that means in practice will evolve as you get more paid assignments or sell a book. With “Tax Day” quickly approaching here in the United States, the accountant who has been preparing my taxes for the last few years recently had some unfortunate news for me: Signing two book deals in 2022 came with an unforeseen consequence: My federal tax liability has significantly increased. Gone are the days when I can expect a cushy refund from the government each spring. And in the coming months, I will be reconfiguring my budget to include quarterly tax payments in order to prevent owing a large lump sum next April.

Take this as one of many examples of why savings is important for the sake of liquidity—even if you are working full-time or just published your fifth book. We all need enough cash on hand to cover personal and business expenses. Investing, diverse revenue streams, and accurate expense tracking will impact your ability to pursue your writing dreams long-term. What happens when you suddenly lose your day job and/or need to hire a web developer to revamp your website? This is where having even a minimal amount of expendable cash can forestall your creative flow drying up from a sudden surge of stress. 

I am not a financial advisor, but having one has tremendously helped me become more comfortable discussing how I choose to spend and save money. I think a lot of the apprehension many of us feel when it comes to handling our finances ultimately stems from a variety of life experiences such as growing up in poverty, struggling to pay off student loans or losing assets during a divorce. But it doesn’t mean your only recourse for moving forward is to squirrel away every penny you pocket. 

Figure out what’s on brand for you as an author or the freelance business you are building. Then budget for it. Also stay clear on the value of each expense line that gets added, so hopefully, you feel less anxious about the equipment, courses and services you purchase throughout the year. I know unraveling ineffective money habits can be confusing and frightening. Thus, these resources can provide additional information and encouragement you may need:

Similar to beginning a new narrative, at some point in order to make any traction, you simply must start. Don’t block yourself off from big economic gains by letting a fear of not succeeding steer your career journey off-course—nor hold on to your money so tight that you inadvertently limit your earning potential. Instead be clear beforehand of the potential ROI, on a personal and professional level, of any workshops, conferences and/or marketing materials you’re considering putting aside funds for in the coming months.

If you’re constantly worried about bank account balances, your writing will suffer. Better money decisions increase the likelihood we will have sufficient mental stamina to craft, and promote, our best work.