A Brief Guide to Writing: 4 – Budgeting income as a writer

Well, so far in my journey to put you off writing, I’ve told you why you shouldn’t be a writer and then went on to tell you there’s no money in it. If you’re still here, well done. Clearly optimism in the face of reality is strong in you – you might just make it as a writer after all.

In truth, I was trying to make sure you don’t have false expectations of riches, fame – or even just regular work – as a writer and that you appreciate that making money (unless you want to sell your soul) isn’t easy.

But depending on the type of writing you do (and in these posts I will largely assume/focus on article writing, poetry, short stories, reviews and novels), if you work for long enough, hard enough, and learn your craft well, you will make money.

The question is: how do you know when you’re earning enough to call it a living?

As I’ve previously stated, writing is an inconsistent game. The article accepted by a magazine today might not pay you until six months later. The book you’ve published that initially sees lots of sales, might (and probably will) drop off swiftly after a few weeks or months. I’ve seen new writers give up their jobs after some writing success only to find it just doesn’t pay in the long run. On the other hand, I know writers who are earning four or five figure sums each month and whose income is reasonably secure (and I’m fortunate enough to have been one of them too, although these days I focus more on courses). How do you tell one situation from another?

The answer is: you can’t. At least not initially. But you can budget the income you do receive in a way which gives you reasonable security. Here’s the budget plan I used for several years. It is strict, but it works, and it is very simple.

Each month, spend only 1/10th (10%) of your accrued income.

That’s it. Simple, huh? Let me show you how and why it works both as a safeguard and as a guide for knowing when and if you can give up that day job.

Month One:

Let’s imagine you have been writing a few months (in between doing whatever your day job is, of course) and, finally, one of those fees has come through into your account. First thing to say is this: if you don’t have a separate account for your earnings, get one. Even if you just add a new savings account (most banks let you do that with a click of a button these days) and you siphon off your earnings as soon as they come into your main account, do siphon them off.

Let’s call it $100 for an article. I work in GBP (ยฃ), by the way, as I’m in the UK, but my readers come from all over the world so I’ll stick to dollars. For the next month, you can spend just 1/10th of that – $10. That’s a couple of coffees over the next month. Well done! Enjoy those drinks. If you never ever make any money again, you have that $10 to use on coffees (or whatever it might be) for the next ten months. If you haven’t made any more money in that time, then you need to face the fact that now might not be the right time for you to be trying to write commercially. Don’t give up writing – there’s always a place for new writers – but earning from it might not be right for you (at least, right now). But don’t forget – freeconomy.

Month Two

It might be a couple of months though before you earning anything else but, if you are taking this writing lark seriously and you’re regularly writing and sending off to editors, then you should earn something again fairly soon. For the sake of simplicity and clarity, I’m going to assume you make another $100 in your second month. Added to your remaining ยฃ90 from last month, you now have $190. That’s $19 you can now spend as you wish over the next month. Great! You could probably get a coffee in each week now for the next ten months if you never earn another cent.

By the way, in reality, your fees may come at different times of the month. I would set a date you want each month to start and look at what’s in your writing account at that appointed time and take 10% of that as your budget for the next month. Don’t be tempted, if you get a sudden ‘bumper crop’ of payments, to immediately spend 10%. Let it sit, and at the same date each month, look at what you have in your account and give yourself 1/10th to play with.

Month Three

By now, you should see what’s coming. Again, let’s assume another regular month and another $100. You have $171 left from your previous month, so now you’ve got $271. Round down at this point. 10% is $27. Depending on where you live, that’s going to cover a bill for the next ten months (perhaps your phone bill?) – assuming you’re fed up of coffees now!

The principle should be clear but hopefully you can also see that this method gives you some nice play money but quickly builds to something significant. Paying a bill from your writing is a definite achievement. Or perhaps a luxury? A few nice bottles of wine each month? Trust me, it’s nice to have a nice meal out regularly, or drink a glass of something special and think “my writing paid for this”!

More importantly, this method prevents a boom and bust habit. Let me show you how with our final monthly example.

Month Four

You’ve been writing for the best part of a year now, potentially, and have cut your teeth on the business. You land a whopper this month. You wrote several article for a magazine where you’ve got in with the editor who likes your work. You’ve just received $500! The temptation here is to blow it all on something really, really nice while simultaneously telling yourself you could be bringing this amount in every month soon – that’s human nature. The money’s gone, you’ve worked harder than ever but…the gigs just dry up. Now you’re gutted. You’ve been fooling yourself all this time. The $500 was a fluke. You’re no writer.

Don’t make that mistake. The writing game is like this. You can spend months – years even occasionally – with nothing coming in, depending on your writing niche. Stick to the plan.

You have $244 left from last month. Now you have $744. 1/10th of that is $74. That’s actually a really helpful amount now. You can do real things with $74 you’re guaranteed to bring in for the next ten months. Heck, you could get those coffees every week with a friend, drink that fine wine and pay your way for a meal every month (apologies to those of you living in big cities like London or New York etc who are looking at this and thinking it wouldn’t pay for your dry cleaning. You guys have to work harder – sorry! – but the principle still stands).

Hopefully, you can see how this method has multiple benefits:

  1. It gives you a definite income you can see growing each time you earn that is a minimum you can rely on for nearly a year.
  2. It stops the boom and bust cycle which leads to anxiety, false expectations and disillusionment.
  3. It allows you to gauge how well your writing career is going from a financial side.

This last point is very important. By following a strict method like this, you never allow debt to creep in (when you make those commitments expecting money to come in, and then it doesn’t). Your earnings are ‘paying forward’ all the time and telling you what kind of writer you are. If you have a budget of $10-$30 per month, you’re a good hobbyist writer. Great! If you get to the point where you’re budgeting $100+ per month, then you can start thinking about this as a more serious came.

If that’s the case, it probably means you’ve got some regular gigs or you’ve produced a book which is pretty evergreen and keeps selling (in my case, it has been both). If that income is more secure then you can consider dividing your spoils by six rather than ten and budget on a six-month plan instead. I actually moved to this quite quickly when I landed several regular article positions with various magazines and newspapers around the world.

And if that writing work dries up? Well you have ten months to realise this is the situation, reassess your options and either try new writing avenues or look to alternative reasons for writing. This simple method gives you time to plan and certainty for several months ahead.

Next time, I’m going to look at one of the major bugbears for all writers (not just new ones) – making mistakes, and what to do about them. See you then!

Social Entrepreneur, educationalist, bestselling author and journalist, D K Powell is the author of the bestselling collection of literary short stories “The Old Man on the Beach“. His first book, ‘Sonali’ is a photo-memoir journal of life in Bangladesh and has been highly praised by the Bangladeshi diaspora worldwide. Students learning the Bengali language have also valued the English/Bengali translations on every page. His third book is ‘Try not to Laugh’ and is a guide to memorising, revising and passing exams for students.

Both ‘The Old Man on the Beach’ and ‘Sonali’ are available on Amazon for kindle and paperback. Published by Shopno Sriti Media. The novel,’The Pukur’, was published by Histria Books in 2022.

D K Powell is available to speak at events (see his TEDx talk here) and can be contacted at dkpowell.contact@gmail.com. Alternatively, he is available for one-to-one mentoring and runs a course on the psychology of writing. Listen to his life story in interview with the BBC here.

Ken writes for a number of publications around the world. Past reviewer for Paste magazine, The Doughnut, E2D and United Airways and Lancashire Life magazine. Currently reviews for Northern Arts Review. His reviews have been read more than 4.9 million times.


3 thoughts on “A Brief Guide to Writing: 4 – Budgeting income as a writer

  1. Dear Ken
    I think for professional writers it is much more important to think about their tax. How do you invest your royalties? I invested it, like some collegues of mine, in high street bookshops. And, of course, to pay a decent salary for your staff for PR, research and agents for your foreign rights.
    It doesn’t matter what you do with your royalties for the amounts you write about.
    All the best
    The Fab Four of Cley
    ๐Ÿ™‚ ๐Ÿ™‚ ๐Ÿ™‚ ๐Ÿ™‚

    Liked by 1 person

    1. I think if you’re in a position to worry about where to invest your royalties, then you don’t need any advice on making a living as a writer! When you are employing staff and so on, then you’ve made it into the ‘big league’ where writing is paying for you. That’s great for you – for most though, it’s a question of how do you budget the little you earn until you get to that healthier point. I had several years having to work on a small budget (as I describe here) and it is only over the last four years or so that thinking about taxes and royalties has become a rather lovely issue to worry about!

      Liked by 1 person

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