I wish freelance writing was ONLY about writing. Unfortunately, what we have here is not a job – it's a BUSINESS. And when it comes to running a successful business, it's all about the bottom line. Here are a few simple ways to make sure your freelance writing lifestyle is not draining your finances!
Tip # 1 – Keep A Balance Sheet.
You do not need to be an accountant to do your own accounting. A simple balance sheet, or even just a chronological record of your income and expenses, can clue you in on just how profitable your freelance writing business is.
Keeping a balance sheet is a great habit to have. Trust me, you'll have to AT LEAST know how much you spend in a typical month. That way you can set a more realistic target income for the month, and even find ways to cut down on unnecessary expenses.
Tip # 2 – Know When The Money Comes In.
Aside from keeping track of your expenses everyday, it's also a good idea to predict exactly when income comes in. Will the money reach your bank in time for your electric bill's due date? Will you be able to pay the rent on time? A balance sheet can not answer these questions for you!
That's why it's VERY important to stick to a schedule. We freelance writers are notorious for procrastinating (admit it)! Not only does it reflect poorly on your reputation, but it also puts you in a spot where you can not pay your bills on time.
I know the notion of being a "starving artist" may be romantic to some people, but trust me, I've starved before. And there's nothing romantic about it!
Tip # 3 – Look Beyond The Business.
Freelance writing is a fantastic business, and it's very possible to earn a fabulous income from it. But it also pays to think of the long-term. Occasionally, everyone will have to retire. Will your current income from freelance writing be able to fund your retirement, even if you lived up to a hundred?
It's a good idea to have a second, passive source of income. It could be a business. Or you could invest in the stock market (buy-and-hold). Or you could open a mutual / index fund account. Whatever it is, the sooner you start it, the better your retirement will look.
I'll write more about these investment vehicles in future articles. For now, take control of your finances – the survival of your freelance writing business, and your own, depends on it!