LaToya Irby As a freelance writer, you’re used to getting paid for your work. But as a business owner, you’ll undoubtedly make some payments to your own contractors. Here are a few things to keep in mind as you outsource work to other freelancers and businesses. Make sure your business can afford the payment As with all expenses, be sure you have enough money to pay the
From my last post on Payment Policies, Anne Wayman gleaned that there are basically four ways for writers to charge: per hour, per word, per page, or per project. Pricing methods might differ, but the price should equal about to about the same. In other words, your hourly, per word, per page, or per project rate are just different ways of saying the same thing.
Having a standard payment policy not only makes you appear more professional, it also makes it easier to manage your business and get paid. With a documented payment policy, you don’t have to come up with payment terms each time you do a project nor do you have to rely on your client’s payment terms. I considered my own payment policy and looked at a
Being a writer is one thing, having a writing business is another. Read any business book, magazine, or blog and you’ll quickly figure out that growing your business means reinvesting your business profits. Big businesses do it all the time and they even have a fancy finance term for it – retained earnings. Growing your business isn’t the only good reason to reinvest your freelance
Here’s a lesson I’ve been trying to teach my almost-four-year-old: you have to plan for tomorrow today. Of course, I keep it age-appropriate for her, especially since the concept of today and tomorrow are still kind of vague. You know, if you eat all the goldfish today you won’t have any to eat tomorrow. Let’s lay out your clothes tonight so they’ll be ready tomorrow.
Over the years, I’ve become increasingly more frugal and more DIYish. I blame self-employment for enabling me to figure out just how much I can do on my own. I never buy frozen dinners because, besides the health factors, I can make the same meal for less money. I have decent sewing skills and I’m always passing up clothes because I think I can make
To make a good living from writing, you must (must MUST) charge a rate that you can live on. Years ago, when I first started freelance writing, I routinely accepted jobs for just one or two cents per word. I had a full-time job that paid handsomely, I was just happy to be paid to write, and I didn’t know better. Now, I wouldn’t dream
For many self-employed workers, taxes and savings are the two hardest expenses to keep up with. I think it’s because there’s no immediate benefit or consequence to either of them. A lot of people mentally plan their budgets based on a certain dollar amount that often hasn’t been adjusted for taxes or savings. So you might end up spending all your money and not having
Did you start 2012 with the goal of becoming a full-time freelance writer? For many people, the writing part of a writing business is the easy part. The business part – making a living and following the necessary tax rules – is harder. Income & Taxes To be a successful freelance writer, you need to make enough money to pay your taxes, save money, and
It’s the end of another year and that means it’s time to make financial plans and goals for next year. Most of the financial advice you’ll read this time of year revolves around getting your taxes together. But, there’s more for freelancers to think about. Reflect on what you’ve done well and not so well this year, and decide what you’ll do differently next year.
Whenever I think about sinking ships, I think of the movie Titanic and how so many people stayed onboard the boat and denying its – and their – fate. Don’t ignore the signs that your writing business is sinking. You don’t have to call it quits, but you do need to make changes to ensure your business keeps going. Has your monthly income been declining
It’s a good idea to keep your business finances separate from your personal finances and you might do this by opening a business checking account. Having a separate account makes it easier to track your tax-deductible expenses and helps you manage your money better. But, business checking accounts are a little more complex than personal checking accounts. For some of us, they’re not the best
Some who use Paypal to receive freelance writing payments may have noticed them asking for your Tax ID number. That’s so they can meet the new the IRS rule that requires third party payment processors to send IRS notification if you receive more than $20,000 in gross payments and exceed 200 payments for goods or services in a calendar years. This goes for part-time and
Having an accountant isn’t a requirement for running a successful freelance writing business. In fact, you can save money by doing your own accounting. But, there are certain situations where hiring an accountant makes more sense than doing it yourself. You’re too busy to focus on bookkeeping and other financial tasks. As your freelance business grows or your life outside of work changes, you may
I realized something kind of depressing today. I’m spending 30% more now than two years ago and the extra 30% isn’t being spent on new shoes. I was reviewing my budget earlier and it occurred to me that it’s taking a lot more money to pay for living expenses than it used to. I’m going over the numbers thinking there should be more leftover, but there’s
Some expenses only happen a few times every year: car maintenance, certain insurance premiums, birthdays, holidays, etc. Because these expenses happen so infrequently, it’s hard to budget for them. You may not be able to add a budget line item in your January budget for $600 car maintenance or in July for the $2,000 property tax. You have to prepare for large, one-time expenses, preferably
“What am I going to do if this doesn’t work?” The first few months of freelancing full-time, that question was always in the back of my mind. I wondered what would happen if I couldn’t make it as a freelance writer. Looking back, I can’t believe I ever doubted, but even if I had to do it all over again, I’d still keep a backup
Have you heard about Netflix’s plan to increase their prices on a segment of customers who were getting the best of two services for a really great price. It’s kind of old news by now, but here’s the background: Right now, Netflix subscribers can get unlimited streaming and unlimited DVDs (one at a time) for $10 per month. Starting September 1, that same plan will
In a freelancer’s life, when the going gets tough, the amenities get going. We all start looking for things to cut out of our budgets during those “famine” months when income isn’t so great. As you’re calling companies giving them the “I’d like to cancel my account” spiel, make sure you don’t cancel these. Homeowners or Renter’s Insurance Your mortgage company requires you to have
Writers should always have multiple revenue streams, even if they all involve writing. In fact, no single client should make up such a large part of your income that you would suffer if you lost that client. Not only is this good money sense, it’s good business sense. Don’t put all your eggs in one basket as the proverb goes. I can see why a
A health savings account (HSA) is a type of tax-deferred savings account that gives you a tax break on out-of-pocket medical expenses. The plan is only available to individuals and families who have high deductible health plan – a type of insurance that requires you to pay a lot of money out of pocket before the insurance kicks in and pays anything. These high deductible
After Google’s recent algorithm changes, income from at least one of my sites dropped a lot than I could have predicted. Unfortunately, I didn’t see the change coming. It made me a lot more thankful of the famine/feast budgeting method I use. Whenever I have great income months, I don’t spend the extra money, though I’m often tempted to. Instead, I put the extra in
Most self-employed workers and small business owners take the maximum number of tax deductions to minimize the amount of taxes owed. The benefit in the short run is that you don’t pay the IRS as much money. However, there’s a downside that you may not immediately realize – your reduced income may disqualify you for major loans, like a mortgage or small business loan. Tax
You never think a disaster will happen to you and then it actually does. Hurricanes, tornados, earthquakes, house fire, and theft are just a few of the things that can turn your world upside-down in a matter of seconds. Disasters hit us harder because we work from our homes. Are you prepared for the worst? Do you have an emergency fund? When you’re depositing money
Most states don’t offer unemployment benefits for self-employed workers, so if something happens and you’re out of work, don’t expect to get help from your local unemployment office. Instead, it’s up to you to pull some strings to get through the rough patch. Predict the shortage as soon as possible. If you know in advance you’re going have a drop in income, you can prepare.
Yesterday, I found a post on About.com’s Freelance Write mentioning a pending law that would provide payment protection for freelancers and other independent workers. Don’t get too excited. The law is currently in the New York Senate and would allow the New York Department of Labor to get involved in payment disputes for residents of that state. It got me to thinking though – would it help
I’m not used to doing big projects. Most of my projects are either a one-time set of articles or a recurring set of articles. It’s easy to quote those since I do them all the time. Recurring payments are either set up on an automatic subscription or invoiced weekly. When I do a one-time set of articles, I ask for an upfront deposit and the
Starting this month, I resolve to save 5% of my income every month, always, no matter what. If I can consistently pay the IRS, the cell phone company, the electric company, the health insurance provider, etc., there’s no reason I can’t do the same for myself. I do have an automatic savings draft set up, but it’s just $50 a month and I now feel
Don’t let stereotypes fool you. Financial freedom is not about being rich. In fact, you could be a millionaire and still be a financial slave. You know you’re financially free when you’re not worried about money anymore. The path to financial freedom isn’t much different for freelancers. I’d even say we have the ability to get there faster by making certain business choices. So how
When it comes to unauthorized bank account and credit card charges, the sooner you find out these charges have hit, the better. Checking account and Paypal account fraud are the worst because these charges reduce your available money. Depending on your bank’s policy, you may have to wait until a fraud investigation is complete before you can get your money back. In some cases (mentioned