Six Steps to Setting Yourself up Financially as a Writer in 2020

Before you can embark on quitting your job to write full-time you need to know one fundamental figure:

How much money do you need each month in order to survive?

I get asked this question a lot, but no one other than you can answer it. Depending on the cost of living where you are, the amount of bills you have and the amount of debt, that figure will be different for everyone. 

Action: create a spreadsheet with your incomings and outgoings. 

If you don’t want to create one, head to Google—there are plenty of budget templates available there. 

If you do create one, include everything that costs you money. For example:

Utility bills, local taxes, food, insurances, TV licences, Netflix or other subscriptions, internet, sports memberships, childcare, school fees etc.

You should also include potential spending. For example, I go to the local coffee shop once a week to write so I know I need $20 a month to cover that. I also spread the cost of Christmas and summer holidays out over the year by saving each month, so I include that figure too. And, I may or may not give myself a monthly book-buying budget because, you know… we’re all book addicts here.

Essentially, anything that will cost you money needs to go on the list. Once you’ve got your list, tot it up and see what the monthly figure is. That is the minimum amount of money you need to earn regularly from your writing business before you leave your job.

Tip 2: Lose the Debt

A controversial one, I know. But, the fastest way to leave your job is to need as little as money as possible. The more money you have to earn, the harder it is to reach that figure—especially as a new business owner. Most businesses don’t earn a good profit for the first 2-3 years.

If your monthly bills (including debt) total $3000 a month, that’s a lot harder to earn than if you’ve paid off all your debt and reduced your outgoings and as a result only need $1500 a month.

Before I quit my job, I paid off £40,000 in student and car loans and fertility treatments. It meant I needed £800 less each month and that made my monthly figure far easier to reach.

No one’s saying you’re only going to earn $1500 a month from your business forever, but if you want to quit, then the lower the ‘must-earn’ value is, the easier it is to achieve. 

Tip 3: Have Savings

I know it’s boring and no one wants to hear it. But trust me, every business will have cash flow issues at some point.