(www.thegoldenpencil.com)

The other day a writing buddy of mine called. He was tempted to take a writing gig that paid way less than half of what she normally gets. True, it was a rather unique opportunity with a major trade publisher. If he did this job well he’d have an excellent contact which might lead to more lucrative work in the future. It wasn’t, however, a book, nor did it earn royalties. In my mind, the “might lead to more lucrative work” some day, some time down the road is, well, most often futile.

We’re close so I asked him what was really up. It turned out he was feeling cash poor. I asked if he had any savings, and he said he did, but he didn’t want to dip into them.

I understand not wanting to spend savings - it’s hard enough to get the money saved and horrid to see it disappear. I finally realized, however, that I have to have a savings account I’m willing to use to smooth out the ups and downs of my freelance writing income. Once I opened a savings account (I use Ingdirect.com) that I created just to smooth income I no longer worried as much when I had to use it for that. After all, I earned a bit of interest and often found I didn’t have to use it right away. I call it my Prudent Reserve account.

It took awhile to build it up to the point it actually helps fill in dips in income, but once it was big enough to do so, it made my life and my pricing so much easier. Now I rarely feel pressured to under price myself.

Of course, my Prudent Reserve account isn’t my only savings. I regularly put 12% in a retirement account and a tax savings account as well. I don’t always manage to stick with these percentages, but often enough so it works.

What I hadn’t anticipated is how secure that savings account would make me feel when I was setting prices. Because of that account, I’m free to turn down poorly paying work, or work I simply wouldn’t like. That’s freelance freedom.

Write, and save, well and often,

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Abundant Freelance Writing - a resource for freelance writers including 3x a week job postings.
Writing With Vision - for those who want to get a book written.

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Ugh, almost every time I get a check I put 10% in a savings account I call Prudent Reserve, 10% in another account I call Real Estate, and 12% in yet another account I call tax savings.

The Prudent Reserve is actually the account I use to bridge gaps in my income. It took about 4 years to get any money to “stick” there, but now it’s beginning to be a nice cushion. The Real Estate account was originally intended for just that. When I moved, I paid my first months rent and deposit out of that. The tax savings account is just that - savings for self-employment tax.

I’ve also got rent, groceries, and the usual expenses most of us have.

Why am I telling you all this? Because today I simply didn’t want to put money in savings! I wanted to go out and spend it… on a sofa and ottoman for my new place. I went ahead and put the money in savings anyway, hating every minute of it. I felt like a 6 year old who’d been denied ice cream or something.

I suppose putting the money in savings is an adult action. And I do like seeing the balances increase, but… but!

One of the results of all this responsibility is way less tension and much more freedom to pick and choose between jobs. And by this afternoon, I’ll actually be glad I’m saving.

Are you good at saving money?

Write well and often,

Two newsletters:
Abundant Freelance Writing - a resource for freelance writers including 3x a week job postings.
Writing With Vision - for those who want to get a book written.