Being a successful writer is the dream of many aspiring novelists and chroniclers. For many, success comes when they can leave a regular job and can concentrate solely on writing. However, writing career is not for the faint of heart and pocket. Before you reach this step, you must learn how to regulate your finances to become a writer.
How to Clean Up Your Finances to Become a Writer
Check all expenses
- Check your expenses, so you know where your money is going and know what you have to do to heal your finances.
- Check bank statements, canceled checks, check records and credit card bills, so you know what and where your expenses are.
- Think about the categories of expenses – clothing, food, entertainment, etc.
Pay off debts
- Pay off all your small loans and debts with credit cards before you leave your regular job.
- Clean your finances by paying cash.
- Concentrate on small payments first
- Once you have the first debt paid you to continue with the next and so on until you settle all the debts.
- Create a budget for when you’re working as a full-time writer.
- How much do you need to spend the month?
- How much can you save?
Advance: You should know some facts before creating a personal budget.
Save your monthly income for at least 12 months. For more months you have planned, the better.
These savings will be used as security and to complete the incomes that come when you are starting out as a writer.
Advance: Need help to save more money? Read this to start saving now and here are another great advice on learning money saving habits.
Discuss with partner
- If you have a spouse, discuss with him/her the option of living on a single income.
- If your spouse supports you in the plan to quit regular work you can substitute the revenue savings of a year, as long as they can live on a single salary.
- If you choose this option, you must have an emergency savings account that is equivalent to expenses over several months.
Making the decision
- Decide how you are going to manage your health insurance. This is a thing to do even if you are healthy.
- You can continue with the insurance for up to 18 months after leaving work although you must prepare to pay the high premiums.
- Some organizations, such as the National Writers Union, have a health insurance option available with membership.
- Can you be covered by your spouse’s health insurance?
Prepare for the tax season, there will be new expenses.
Before you leave your regular job, deduct taxes, Social Security, and other extras. As a full-time writer, you will have to pay taxes for self-employment.
Some writers choose to make quarterly tax payments to avoid having to pay a huge amount once a year.
Please understand the terms
You understand that making money as a full-time writer is tricky. It may take months or even years before you see a check for the work you’ve done. It increases the chances of becoming a writer by setting yourself up before leaving your regular job. You should have jobs for 1 or 2 years before leaving work.