26. December 2015 · Comments Off on How to Survive As a Freelance Writer – 3 Ways of Putting the Focus on Your Finances & Money · Categories: Finance

There are three areas you need to concentrate on in order to survive as a freelance writer. To focus your survival efforts on those areas you need to pick the right techniques.

One of those areas that you need to focus on in order to survive is finance and money.

In this article, I’m going to show you three specific techniques to help you survive and keep your focus on the money.

1. Always put money away for a rainy day.

There is a tendency when business is good to start spending. In fact, there is a tendency all the time to spend everything you have. That’s part of being human. It’s also one of the leading causes of insolvency. But for a freelancer that tendency is suicide. You see one of the characteristics of freelance writing is that your monthly income will vary over time. Consistency of earnings is just not heard of. And that can cause real problems.

To cover you when your income is below normal you need to have a safety net. Think of it as your own personal unemployment insurance. Which it is since you probably don’t qualify for the real version! Take a portion of every dollar you earn and put it in a separate bank account. Make sure you invest the amounts wisely since it can quickly get to be quite sizeable — and get wiped out just as fast. But be sure you always have some of the money accessible within a month.

2. Pay Yourself A Salary.

One of the things you need to learn as a freelance writer is that all the money you earn is not salary. Instead you need to establish a budget and a salary. You should be able to maintain this level of salary regardless of your cycle of earnings. Yes, you own the company but you are also an employee. As an employee you need to be paid a salary. Otherwise you’ll leave. So if the company wants you to be around they need to pay you every month (or week or bi-weekly). This also means that like an employee you need to keep your spending below your salary. And it means you need two bank accounts — one for you as a person and one for you as a freelance writer.

3. Keep a close watch on your costs and liabilities.

As a freelancer, you’re going to be under pressure to spend all the money coming in. That would be a big mistake. Paying yourself a salary is one way of ensuring that you remember that there is a difference between the income and the available money. But that’s still not enough. Now you need to watch the company’s spending as well. You need to remember that not all your bills are going to be paid immediately. Some of your business bills are not going to show up for months. So when you decide to spend money on your business always be sure that future liabilities are not going to drive the company into a cash negative position.

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