I don't talk about finances much here other than issues revolving around rates and making money. That's an area where I know my stuff, but I leave the rest to our resident financial experts. Today though I want to talk about money -- my money -- with a personal look at how freelance success has, and hasn't, changed how I spend.
One thing that always leaves me shaking my head is when new writers tell me I can't possibly know what it feels like to be in their shoes, desperately seeking that next check to pay their bills. Yeah. I wish. When I made the leap from full-time nonprofit work to starting my own business full-time, it was a struggle. I remember what it was like wondering where my next rent payment would come from. It's not a pretty place to be. And with a combination of luck and smart business decisions, I was able to get out of that phase fairly quickly. (Tip: it doesn't come from working for peanuts.)
I quickly realized my worth and built the confidence to charge for it. I wasn't afraid to adjust my target market a bit. I took risks that paid off. I learned new skills (why I can sit down and put out a new site in a few hours these days). I learned to diversify. I built my network. I built my platform. And most importantly, I learned how to say "no."
It didn't take long for my income to grow -- dramatically. Now I really don't have to worry about money. But for me that kind of success didn't change all that much about how I spent.
Earning, Spending, Saving
I know some freelance writers who earned a big payout and immediately blew it on something like a trip or a new car. Then they wonder why their overall situation hasn't improved. Now don't get me wrong. If you genuinely need a new car, by all means, buy one. But buying one just to have something shiny and new is silly to me, and it's not something I'd do. Even after years of watching my income steadily increase, I'm still not the type who's going to assume that trend will continue indefinitely. That's why I drive a 17 year old little Geo Prizm (who runs beautifully other than needing routine maintenance, although her paint job needs far more than a touch up). My sister and I call her "the happy little Geo." I love that car. I don't drive all that often -- a perk of working at home -- and the woman I bought her from didn't drive her all that often either (bought the car from someone the family knew so there wouldn't be surprises). She only has about 130k miles, and these cars have been known to hit 300k. I'll be thrilled if I can keep her running to 200k. I think when the day comes where I do have to get rid of the car, I'll probably cry. Really.
The fact that I won't spend just to spend when it comes to cars doesn't mean I don't spend more now that I make more. I just don't let it change my general habits so much that anything becomes an extreme. For example, my apartment looks much different now than it did a few years ago. I upgrade things as they need to be replaced... not just because I want something shiny and new. I don't buy the latest tech gadgets just to have them. If I overspend at all, it's probably buying things for other people, or putting more money into the business (which I really don't think is "overspending").
Some other people I know have let money change them pretty significantly. One of the biggest changes is that earning more makes them think they should buy more on credit. I'll never understand that. But I think I'm fairly well-grounded on that front these days. I don't buy on credit. Ever. I used to. And when I was younger I got into trouble with it after a house fire -- long story short, a student can't juggle three jobs for long to maintain those credit card payments before burnout sets in. It was a wreck. And I vowed never to buy on credit again. I don't use credit cards. I have two old debts left -- student loans (which I opt to pay off over time because it's the oldest account on my credit report, and the age helps my score -- which I still find obnoxiously odd), and one other old debt that will be paid off completely as soon as they mail me the documents I keep requesting (which they assure me I'll have in 60-90 days -- I hope).
Helping my score or not, I have no intention of financing things in the future. When the Happy Little Geo does finally bite the dust, I'll buy my next car outright -- no car loans. And while I'm content in my little one bedroom apartment for now (I don't believe in buying a house until I'm married and ready to settle down long-term), I'm hoping to buy my first house outright too (although I understand there will be another person involved in that decision).
Why am I talking about budgeting and spending and saving with you? Because I want new writers to understand that those of us who have gone before them do understand where they're coming from, do understand the tough decisions involved in starting a freelance career, and aren't necessarily loaded financial whizzes just because they earn more now. I can buy what I want and I can afford to sink a good deal back into my business. But that comes down to a combination of hard work and self-respect and it doesn't put me, or anyone else, out of touch with newer freelancers. And those are things you can achieve too if you learn to value yourself early on. Remember it's never too late to make changes, and it doesn't have to take as long as you think to see serious financial results.