(Also, and not coincidentally, before those last ten years were the seven in which I was making rather quite a bit less. Oh, my, yes. That income didn’t come from nowhere; I did my time in the salt mines, trust me.)
It’s possible to make a good amount of money as a writer. Most writers don’t. You should assume, strictly for business purposes, that you won’t, or at the very least, won’t for a very long time. It’s not all about you, it’s also about the market. Don’t get defensive. The median personal income in the US in 2005 was $28,500. You have a lot of company in the bottom half.
More to the point, coming to peace with the fact that writing is likely not to make you a lot of money means that you can realistically look at that money going forward, which will put you in a better financial position than someone who just blunders along assuming that any minute now people are going to start tossing money at them for their lovely, lovely writing. These people become bitter and intolerable soon enough. You don’t want to be one of them.
Noting all the above, we come to point two:
2. Don’t quit your day job.
Lots of wanna-be writers wax rhapsodic about how great it would be to ditch the day job and just spend all their time clickety-clack typing away. These folks are idiots. Look, people: someone is paying you money and giving you benefits, both of which can support your writing career, and all you have to do is show up, do work that an unsupervised monkey could do, and pretend to care. What a scam! You’re sticking it to The Man, dude, because you’re taking that paycheck and turning it into art. And you know how The Man hates that. You’re supposed to be buying a big-screen TV with that paycheck! Instead, you’re subverting the dominant paradigm better than an entire battalion of college socialists. Well done, you. Well done, indeed.
People who aren’t full-time writers tend to have a hazy, romanticized view of the full-time writing life, in which writers wake up, clock four-to-six hours of writing truth, and then knock off for the rest of the day to be drunk and brilliant with all the rest of their writer friends. They tend to gloss over the little things like all the time you spend worrying about where the next writing gig is coming from, or all the e-mails and phone calls to publishers reminding them that, hey, they’ve owed you a check for nine months now, or (due to the previous) deciding which bill you can allow to go to a second or third notice, or the constant pressure to produce something you can sell, because you’ve heard of this crazy idea called “eating,” and you think you might like to give it a whirl. The full-time writing life isn’t about writing full-time; it’s about a full-time quest to get paid for your writing, both in selling the work, and then (alas) in collecting what you are owed. It’s not romantic; it’s a pain in the ass.
Think of all the writers whose work you love. The vast majority of them have day jobs, or had them for a significant portion of their working lives, usually until it became quite clear that they were shooting themselves in the foot, economically speaking, by not writing full-time (this happens rarely). But even then, their having had a day job was a good thing, because it meant that they actually developed some life experience, not the least of which was consorting with real live human beings who weren’t writers. Yes, they exist. Try the grocery store; they hang out there and buy things.
Yes, having a day job takes time away from your ability to write. So does watching TV or playing video games or sucking on your toes or posting angry screeds on the Internet. Unlike any of those things, however, a day job gives you money, which is something you as a writer will generally find hard to come by. Your day job is a friend to your writing career (not to mention to your family, to your mortage, and to your eventual retirement). Don’t be in a rush to give it up. Instead, prioritize everything else you do, and see where you can find writing time in that.
3. Marry (or otherwise shack up with) someone sensible with money, who has a real job.
Hear me now, and note well what I say to you, because I am dead serious here: The single smartest thing I ever did for my writing career was to marry my wife. And this is why:
a) She is incredibly good with money by training and temperament and handles the domestic finances for us, leaving me free to focus on making money through my writing;
b) She has a real job with benefits, which gives us a month-to-month income (i.e., a secure economic baseline), shields us from the classic American financial disaster of the medical emergency, and has allowed me to take chances with my writing career I might not have been able to otherwise.
Also, you know. It’s nice to have someone to listen to me whine, to cheer me on, and generally to go through life with. But economically, which is what we’re concerned with here, a fiscally responsible spouse with a solid bennies-laden job is a pearl beyond price for writers.
Let me note strongly here that one thing I’m not saying here is that this sensible, fiscally-responsible spouse should expect to have to support you for years and years while you fiddle away on your Great American Novel (which is code for “playing Halo 3 from 9:30 to 4:30”). Letting your spouse support you while you tinker pointlessly makes you no better than all those heavy metal bassists who spend entire careers sponging off a series of girlfriends. You better be working, and contributing to the household income. For us, that meant using a fair amount of my writing time doing consulting work (not romantic writing but pays well) as well as writing books. It also meant being the at-home parent, which saved us a bundle on day care (which kept our costs down, which counts as “contributing”).
Or to put it another way: Your spouse is giving you a gift by giving you security and flexibility. Make sure you’re making it worth their while, too. And make sure they know you know how much they’re doing for you. Don’t be a heavy metal bassist.
Let me also note that this is the one piece of advice that I suspect writers will have the least control over. It’s hard enough getting people to like you anyway; finding one who is fiscally responsible and willing to pitch in for you while you develop your writing career is a tall order. What I’m saying is that if such a person comes along, grab them with both hands, make snarly territorial noises at all the other writers hovering nearby, and then try really hard not to screw up the relationship. In addition to being likely to make you happy as a human, this person will also likely be an excellent economic complement as well. It’s nice when that happens.
4. Your income is half of what you think it is.
When you work for someone, the employer withholds your income and Social Security taxes for the IRS, pays part of your Social Security, automatically deducts for your 401(k) and health insurance, and (if you’re not an idjit) also kicks in a bit for the 401(k). When you’re a freelance writer, none of this happens. The problem is, lots of writers forget that and spend everything they get when they get it, so when taxes come due (which is quarterly, because per the earlier notation, the government quite sensibly doesn’t trust freelancers to pay their taxes in one lump sum) lots of writers go “oh, crap” and have to suck change out of sofas and the few remaining pay phones to square the debt. This is also why many writers never get around to funding IRAs or other retirement vehicles, and spend their lives hoping they don’t slip or catch cold or get hit by a taxi, because they have no health insurance.
Simple solution: Every time you get a check, divide it in two. One half is yours to pay for bills, rent and groceries, and if there’s anything left over, to play with. The other half, which you deposit into an interest-bearing account of some sort, goes to federal, state and local taxes and your Social Security taxes, and anything that’s left over goes to fund your IRA (do the Roth IRA, it’ll pay off in the end) and, if you’re not lucky enough to have either number two or three above, your health insurance (have a day job or a spouse with bennies? Save it anyway. Be one of the wacky single-digit percent of Americans who actually save something in the bank. Also, and more usefully, that money you’re saving becomes a “buffer” for the times when you have bills but no income on the way. Th
e buffer is your friend. Love the buffer. Fund the buffer).
Yes, it sucks to take half of your money and never see it again. But you know what else sucks? Owing the IRS a huge chunk of money sucks. Hospitals playing musical chairs with you because they don’t want your uninsured ass cluttering up their emergency room sucks. Not ever being able to stop working because you didn’t plan for it sucks. All of these things, in fact, suck worse. So suck it up and put that half of the check aside.
Related to this and extremely important: The money you have in hand is all the money you have. For the purposes of budgeting, do not allow yourself to think “oh, well, such-and-such publisher owes me this, and then I should get royalties for that, so that’s more money coming in…” That’s a really fine way to spend money you don’t have and maybe aren’t going to get.
Is the money in your hands? Then it’s yours (half of it, anyway). Is it not in your hands? Then it doesn’t exist.
5. Pay off your credit cards NOW and then use them like cash later.
If you’re anything like the average American, and economically speaking you probably are, at some point or another in your life you bought into the idea that the credit limit on your credit card was actually money you could spend—and should spend! On an iPod! And a big tv! And on pizza! In Italy!—and now you have close to $10,000 in consumer debt at 19% APR which you are making monthly minimum payments on, which means that you’ll still be paying off that debt when you’re 70. Congratulations, average economic American! You rock.
Okay: Remember when I told you to put aside half of your income for taxes, and then if there was anything left, to invest it an IRA and otherwise save it? Well, if you have more than a token amount of credit card debt, forget about saving it and apply it to your credit card payment instead. Why? Because it makes absolutely no sense to save or invest money if the return rate for that investment is less than the annual percentage rate of your credit card debt. Net, you’ll lose money (especially if you’re investing from scratch). You need to buy down that credit card debt as quickly as you sensibly can. It is your number one debt priority. Once you’ve paid down your debt you can begin saving and investing. But pay that debt first.
So, now it is some indeterminate amount of time later and you’ve paid off your credit card debt. Do you tear up all your credit cards and swear never to use them again? No, because as sensible as it would seem to be, there is some benefit to using credit cards. For example, I use a card for all my business-related purchases because at the end of the year I get an annual statement, which makes it a hell of a lot easier for me (or, actually, my accountant) to do my taxes. And like it or not, regular (and responsible) activity on credit cards is useful for your credit rating.
No, what you do is you get rid of all your credit cards but one, and when you use it, you only put on it what you can pay off at the end of the month—you don’t carry a balance, since carrying a balance is the root of all credit card evil. You treat it as cash, and if you don’t have the cash to pay off what you’re charging, you don’t buy it. Simple. Personally, I use American Express because it is technically a charge card, not a credit card—i.e., it has to paid off at the end of the month, and Amex looks askance at you if you try to carry anything over. This helps keep me from overspending, and as mentioned earlier also helps me keep track of my business-related purchases.
Just remember that credit cards are not your friends; their entire purpose, from the point of view of the bank that gives them to you, is to make you a consistent and eternal source of income, forever and ever, amen. If you want to be in economic thrall to a bank until the very moment you die, that’s your business, but it’s a pretty dumb way to go about things. Especially if you’re a writer, who doesn’t necessarily have a solid month-to-month income anyway.
Related to this very strongly:
6. Don’t have the cash for it? You can’t have it.
To reiterate, the reason that Americans are as generally economically screwed as they are at this moment in time is because they bought into the fundamentally insane idea that buying tons of shiny crap they didn’t need on a high-interest installment plan made any sort of rational sense at all. And as completely idiotic as it is for the average American, it makes even less sense for a writer, who often doesn’t know when or even if they’re going to paid again. Committing to a non-essential monthly cost when you don’t have to is stupid. You need somewhere to live, so a monthly rent or mortgage payment makes sense. You don’t need a monthly charge for two years to pay for that 42-inch 1080p TV. Use your brain.
But you want that 42-inch 1080p TV! I understand; I want it too. What you do is save for it. When you save for something, it’s like you’re making a payment on it, except that you don’t have an evil credit card company charging you 19% for the privilege. I realize it’s condescending to put it that way, but, look: If people actually knew this, they wouldn’t have thousands in credit card debt, now, would they? And yes, it’s true that while you’re saving for that HDTV (or whatever), you don’t have it, and we as a nation are no longer used to the idea of not having what we want now now now now now. Well, get used to it, you insolvent jackass. Otherwise some bank owns your ass well into the next life. Really, that’s all I have to say about that.
And in the meantime, there’s always the local sports bar. Pay your $3 for a beer and watch the game on their massive HDTV. That’s why they put the HDTV there in the first place. And while you’re packing away the money to buy the 42-inch 1080p widescreen TV, there’s likely to be a bonus, in that the cost of that TV is likely to come down a bit, because that’s what happens with so many consumer goods over time. It’s like getting cash back on your purchase.
The other advantage of having to save for things, incidentally, is it makes you ask yourself if you really need it (or, at least, want it so much that you’re willing to part with your money for it). You are likely to be surprised at how many things it turns out you don’t really need if you have to wait to get them, and can actually see the mass o’ cash you’re laying out for ‘em. And that’s all to the good for you.
7. When you do buy something, buy the best you can afford—and then run it into the ground.
I am not now, nor have I ever been, an advocate for cheap crap. Cheap crap sucks; it’s badly made, it breaks, and then you have to go buy a replacement, so effectively the cost of whatever cheap piece of crap you bought is twice what your originally paid for it (or more, since having learned your lesson, you didn’t buy cheap crap the second time).
I am an advocate for thrift, however, and in my life, being “thrifty” means that you buy well, and then you use what you buy until it no longer has value. You buy it for the long haul. This was something that came naturally to people of my grandparents’ generation (the Great Depression kind of drummed it into them) but these days, when the marketing folks at Apple strive to make you feel a wave of intense, personal shame that you didn’t pony up for the Mac Air the very instant it was released, this is a virtue we’ve lost track of. And it’s true enough that if every single American thought like this, the economy would collapse even faster than it is doing at the moment. But you know what? Let the rest of America worry about that. We’re here to worry about you.
I practice what I preach, here. In 1991, when I was out of college and starting my first job, I bought the best car I could afford: an ‘89 Ford Escort, Pony edition (i.e., even more underpowered than the average Escort!). I paid $4800 for it and I drove it for 12 years until it could barely chug into the dealership to meet its replacement (not an Escort). In 1997, we bought Krissy a Suzuki Sidekick; she still has it 150,000 miles later. Going back to 1991, I bought a stereo system for $400; I used it until just this last Christmas, when it finally gave up the ghost as it spun a holiday CD. The TV I bought for myself in 1991 still chugs away in my bedroom; we’re likely to replace it when the switchover to digital happens next year, but then again, we might not (it’s hooked up to Dish Network, which will scale down
the signal to 480p). Hell, our answering machine is seven years old; I think it may use a tape.
Point is, we’re not afraid of spending money, but we don’t spend money just to spend money; we look for something that we can live with for a long time. That usually requires spending a bit more upfront, in order to save a lot more on the back end. As long as you combine this with point six, and buy with money you’ve already saved, this shouldn’t be a problem.
It does require, as writer Charles Stross would put it, the ability to make a saving throw against the shiny; i.e., internalizing the idea that you don’t need every new thing just because it’s nice and pretty and can do one thing that thing you have like it can’t do. This is a tough one for me, I admit. I do so love the shiny, and sometimes I give in when I shouldn’t (as long as I have the money for it). But most of the time, I buy well, and buy to last—and then use it until it begs me to let it die. And then I use it for a year after that! Grandpa would be proud.
8. Unless you have a truly compelling reason to be there, get the hell out of New York/LA/San Francisco.
Because they’re friggin’ expensive, that’s why. Let me explain: Just for giggles, I went to Apartments.com and looked for apartments in Manhattan that were renting for what I pay monthly on my mortgage for my four bedroom, 2,800 square foot house on a plot of land that is, quite literally, the size of a New York City block ($1750, if you must know, so I looked at the $1700-$1800 range). I found two, and one was a studio. From $0 to $1800, there are thirteen apartments available. On the entire island of Manhattan. Where there are a million people. I love that, man.