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Articles on Freelance Writing Success
- Bob Bly
- Peter Bowerman
- Nick Usborne
- Ed Gandia
- Pete Savage
- John Riddle
- Kendy Sproul
- Clayton Makepeace
- Steve Slaunwhite
- Michael Masterson
- Chris Marlow
- Roger C. Parker
- Marcia Yudkin
- Michael Stelzner
- Brian Tracy
by Ed Gandia
NOTE TO ALL READERS: Although the tips that follow pertain mostly to freelancers in North America, the basic idea is universal: If you don’t have ample savings, you’re putting yourself and your business at risk. Even if some of the suggestions don’t apply to you, I hope they’ll at least get you thinking about this important topic.
As always, consult your financial advisor before taking action on important financial matters.
If you want to enjoy a successful freelance writing career — whether you freelance part time or full time — it pays to be more strategic about your overall business.
For instance, it pays to promote yourself more effectively and consistently (not just when you need the work). It pays to pursue projects that will continue to be in high demand, regardless of economic conditions. And it pays to have emergency savings you can turn to should your income decline temporarily or should you be faced with large unforeseen expenses.
Especially if you’re planning on eventually quitting your day job to become a full-time freelance writer.
So if you’re running a little light on cash reserves these days, now might be a good time to beef them up. Most financial planners recommend 3 to 6 months’ worth of living expenses (not income, but actual living expenses). Considering today’s volatile market, I say shoot for 6 months’ worth or more.
Frankly, it’s very difficult to give your clients your very best if you’re worried about money all the time. Having a healthy savings balance can help remove much of that fear and worry, enabling you to focus on producing quality work.
I realize that coming up with that kind of cash might seem overwhelming, especially if your business is a bit erratic right now. So I’ve compiled a list of 12 practical ideas to help you build those reserves fast — without having to live on cheese sandwiches for a year.
Tip #1: Log your expenses. First, you must determine where ALL your money is going. So for the next month, keep a detailed journal of every dollar you spend.
Then, group your expenses into 3 buckets: critical, important, nice-to-have. Cut out 80% or more of the nice-to-have expenses for the next 6 to 12 months. Not thrilled with the idea? Come up with cheaper alternatives you can live with for a few months (you’ll find some ideas further down this list).
Tip #2: Reduce your credit card payments. If you carry a credit card balance and you’re paying more than the minimum payment, scale that back to the bare minimum for a few months and divert the difference into a savings account (make sure you actually divert those funds; don’t spend them!). Remember, it’s just temporary. Skip this tip if your credit cards carry an interest rate of more than 18% (in which case, see tip #3).
Tip #3: Ask your credit card companies to lower your interest rate. Is your mailbox flooded with credit card solicitations? Keep an eye out for the best offers and use them to negotiate a better rate with your credit card company.
Let them know that you’ve been a loyal customer for X number of years and you’d like to continue that relationship. However, you’ve been getting better offers from other companies. You don’t want to jump ship, but you need a better deal. In most cases, they’ll agree to cut your rate. Just make sure to be courteous and calm from the start. Don’t get defensive.
Tip #4: Increase your auto insurance deductible. According to a recent article in USA Today, raising the deductible on your car insurance policy from $200 to $500 could reduce the cost of collision and comprehensive coverage by up to 30%.
Raising your deductible to $1,000 could potentially lower your overall premium by 40% or more. Sure, you’re taking on more risk by doing this. But that’s precisely what your new emergency fund will be for!
Tip #5: Refinance your auto loan. As interest rates have continued to drop, now might be a good time to shop around for a better deal on your car loan. Even a 0.5% drop in your interest rate could potentially save you thousands over the remaining life of the loan. Best part: Refinancing your auto loan is much easier to do than refinancing your home loan. And filling out your loan request takes only a few minutes.
Some sources you might want to check out are LendingTree and ELOAN. Both of these links have more information on the auto-loan refinancing process and the type of savings you could expect.
Tip #6: Shop for gas sooner. Rather than waiting until you’re nearly empty (which forces you to buy gas at the closest gas station, regardless of price), start shopping for the best deal as soon as you get down to the half-tank level. Don’t make any special trips. Just keep your eyes open as you drive around town. Once you find the best deal, fill up, even if you still have plenty of gas left.
This strategy will have you filling up more often. But by giving yourself a bigger shopping window, you’ll be averaging down your fuel costs over the course of the year.
If you live in the U.S. or Canada, you can use such websites as www.GasBuddy.com. This site allows motorists to share information about low-priced fuel in your neighborhood. Just punch in your state and zip code (or province and postal code) and you’ll get a listing of dozens of gas stations and their prices in your area.
Tip # 7: Make a meal plan every week. A recent study found that the average American household throws away more than 470 pounds of food every year. A big reason for this wasted food: poor meal planning.
Unfortunately, many of us buy groceries without putting much thought into what we’re going to cook (and when). As a result, much of what we buy ends up spoiling before we can eat it.
One solution to this dilemma is to create a weekly meal plan. Every Sunday, sit down with some cookbooks and decide what you’ll make for dinner that week.
Then, make your grocery list based on those meals — and stick to it.
I’ve seen the savings first hand. My wife and I have already saved almost $200 since implementing this idea 2 months ago.
Tip #8: Learn to cook gourmet meals. If you enjoy eating out every weekend, why not cut it back to once a month? This alone can save an average family $150 - $200 every month.
To avoid feeling like you’re depriving yourself, why not learn how to cook a few special dishes? Try to re-create some of your restaurant favorites. Invite some friends over. Rent a movie or host a poker night (chips only, no cash bets!). Get creative and have fun without spending much.
Tip #9: Trim your cable bill to the bone. Call your cable company and get quotes on bundling your cable, phone and Internet service. If that’s not an option, ask them if there’s a promotion you can take advantage of. Sometimes you can lower your existing bill dramatically while keeping the same cable package.
Also, keep track of which channels you actually watch. You might find that cutting out all movie channels (if you rarely watch them) could save you $25 or more a month. Or heck, maybe now is the time to get rid of ALL premium channels and spend less time watching TV (what a concept!).
Find some other sources of entertainment. Spend more time outdoors. Take the kids to the park. Have a weekly family game night (that’s what we do on Friday nights). Again, get creative!
Tip #10: Make/bring your own food. Instead of stopping by Starbucks every morning to get your $5 latte, try making your own at home. Vending machine junkie? Why not buy in bulk at the grocery store and bring your own to work?
Same for lunch. If you work in an office and buy your lunch every day, try brown-bagging it 3 times a week. These little things can easily free up $80 to $200 (or more) every month!
Tip #11: Hold a garage sale (or use Craigslist/eBay). Scour your garage, closets and attic for items you no longer need. Then, hold a garage sale or put your items up for sale on Craigslist or eBay. Depending on what you’re selling, you could conceivably make $100 to $500 or more selling stuff you no longer use.
Tip #12: Buy holiday presents throughout the year. Instead of waiting for the mad holiday shopping rush, keep an eye out for gift ideas as you shop throughout the year. As soon as you see a great gift idea for someone on your list (especially if it’s on sale!), buy it. Come the holidays, you’ll have all your shopping done.
Besides saving you money and reducing stress, this strategy will also even out your cash flow as you buy more gradually (instead of all at once). And it will increase the chances that you find just the right gift for everyone on your list.
Tip # 12.5: Reward yourself. Finally, promise yourself that once you reach your savings goal, you’ll buy something special. Doesn’t need to be anything super-expensive, but pick something that gets you excited (in my case, it was a special bottle of wine). An exciting reward will help you stay on course as you make changes to your lifestyle — changes that aren’t always easy to make.
One more point: These 12 tips could potentially help you free up $6,000 to $12,000 (or more) annually. But they won’t do you much good if you don’t continually divert those savings into a separate account. Therefore, once you implement some of these ideas and know how much cash you’re freeing up, make sure to transfer those funds into your emergency savings account every month.
NOTE: Ed Gandia is the author the bestselling guide, Stop Wishing and Start Earning: A Low-Risk Plan to Escape 9–5 and Launch a Profitable Copywriting Business.
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