BUDGETING FOR YOUR WRITING LIFE
How much income do I need as a writer?
This is a whopper of a question, but it’s a smart one to ask as you build your writing life.
Here are the essential questions to consider when budgeting for a thriving writing life:
Where do I live (and what is the cost of living there)?
What are my basic monthly expenses?
Do I have debt to account for?
What do I have in savings?
How much money do I need to feel secure and comfortable?
What is my ultimate goal?
Rent. Ouch!
Where do I live (and what does that cost?)
I can speak from experience here. Before Berlin, I lived in incredibly expensive cities.
I was in California for 20 years. First San Francisco and then in LA.
Maintaining the standard of living there was brutal, but the community was amazing and I made so many wonderful connections.
I took wonderful writing workshops. I was meeting amazing writers all the time. A lot of the early success of The Secret Library Podcast was due to being able to go to a bookstore event, meet an incredible author, buy their book, talk to them and invite them on the show.
But Los Angeles was a mixed bag because the cost was excruciating.
Are the benefits of your location worth the cost?
This can go both ways - if you live in a remote area and have very low overhead, the ‘cost’ can show up as increased difficult to find community or attend events.
What is most important for you?
What are my basic monthly expenses?
Categories to consider:
Housing
Utilities
Food
Healthcare and wellness
Transportation
Taxes
Loan or debt payments
Know the totals or averages for each of these categories
This can be a scary thing to add up. However, I can say that every time I’ve done this exercise it’s ended up being less grim than I expected, even when I had significant debt to deal with.
You may have additional categories to these. If so, add them. I see these as the basics, but we have others in our list, such as:
Entertainment
Travel
Education / Training
Once you know your numbers, you can make more empowered choices.
A word about debt
A lesson I learned from Bari Tessler that was hugely helpful: debt is easier to pay off when you see it as a celebration of something you chose to spend on.
Rather than thinking of paying off a credit card balance as a yucky task, if you used the card to go on a much-needed vacation, Bari suggests calling these payments something like “my Italian adventure.”
Even if you have to call the payments “my rebellious 20s” or “Finding my personal style” due to spending choices we might not make now, we can acknowledge that we learned from the experience.
The big bonus is: the debt tends to get paid of faster when we don’t resent it.
Total it up, give it a fun name in your budget, and keep moving ahead.
What about savings?
Saving can be just as loaded as debt. After all, when we’re building a writing life we often don’t have a lot of extra to work with.
However, I’ve found that automating my savings has been a huge help. I use N26 Bank for my business, and whenever money comes into it that’s over 50 Euro, it gets sorted into a tax account and a savings account. I get to define the percentage and it happens without me having to think about it.
If you never saw it, you won’t miss money as much
It can be a small percentage, like 5% to start, but as you see this increase, it will help.
As a creative, I often had to take jobs that were a bad fit because I needed the income. Learning to save became easier when I realized an important secret:
A healthy savings account gives you a superpower: the ability to say no.
Once I had a month, and then a few months’ worth of expenses saved, I didn’t have to accept any job that came my way. I could wait for the right fit, and eventually I could go full-time working for myself.
It can feel dry and restrictive to save and not have access to all your income right away, but I promise that the opposite is true: the more savings you have, the freer you are.
It’s ok to go slow. Some banks even have an app that will round any purchase up to the nearest dollar/pound/euro etc and put that amount in savings. It’s a few cents at a time, but that can get your started without serious deprivation.
How much do I need to feel safe and comfortable?
This is a crucial piece of information, as it’s so personal. Some people are ok with a bank account that’s close to empty. Others go into a panic and can’t focus on anything until that’s remedied.
You know who you are, so plan accordingly.
Those who need a solid buffer will likely do better with a day job that covers everything. Those who are ok with uncertainly could potentially work part time and tolerate the stress of getting creative to cover the gap.
What it boils down to is this question:
What do you need control over more: your income or your time?
High-paying jobs expect a lot of your time, as a rule, while lower hourly or salaried part-time work is more flexible. There are exceptions to this, of course, but it’s helpful to know if you’ll feel more secure with a higher salary and are ok with less control over your schedule.
If you suffocate with others dictating your time, the higher salary isn’t going to be worth it, unless it’s to fulfill a goal you value just as much.
What’s my ultimate goal?
This is the most essential question of all.
Once you’ve reflected on all these points, it’s time to look at the big picture.
What do you want your writing life to look like over the next few years?
Do you want to be a full-time writer, or are you happy writing as a second stream of income or even as a hobby?
Knowing the end goal can help you plan more effectively now. If you want to write full-time, then taking a high-paid job for a defined period to pay off debt and build up adequate savings to feel secure is an effective plan.
If, however, you see writing as a secondary income stream as your goal, and primarily a source of fun, it’s more important to have work that will be tolerable long-term and cover as much of your expenses as possible.
With these thoughts in mind, re-visit the questions above.
Once I knew I wanted to write and teach writing as my primary income, it was clear we needed to leave LA and find a place that was less expensive. Berlin fit all of our needs and has lowered overhead without sacrificing the cultural hub that we had in LA.
Go slowly with these questions. Let them percolate.
Let’s keep this conversation going!
*Once again, I recommend Bari Tessler’s The Art of Money. Both the book and workbook are excellent resources as you work through these questions.
We’ll continue this conversation in the next post.
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