Tag Archives: finances

Writing Despite The Bills

A recent piece on Salon highlighted one of the murky secrets of the writing life: who is paying the bills?

The piece, provocatively titled “‘Sponsored’ by my husband” (and the response “The price I pay to write“) discusses one of the topics a Southerner just isn’t supposed to discuss: finances. The first discusses how hard it was to try to have a regular life while also writing; the author is only able to currently manage hers because she married someone whose salary is “hefty.” The second piece has an infatuation with the HBO show girls but at least is taking a crack at working 9-to-5 while also being a writer.

But the nitty-gritty is one of the cruxes of a writing career: you still need something to eat, somewhere to sleep, and probably (at least in America) health care of some kind. Where ya gonna get that?

In the first article, Ann Bauer points out that several authors recently published talk like they’ve done it all themselves but really benefited either from inherited money or deep familial connections.

I practically swooned with jealousy: undeniably, both would help me a great deal. Particularly the connections—since getting an agent/publisher/people with purse strings to pay attention to you is the first obstacle to publication.

But the “having enough money to live off of” is a huge component, too. I talked about this when Hugh Howey, of Wool fame, first hit the radar. Yes he worked hard, yes he is more workaday than a millionaire, but he also had a wife who was mostly able to support them while he took a low-paying part-time bookselling job to give himself time to write. That is a huge luxury (and, luckily for them, it paid off big time.).

At conferences and online, I see a lot more of the kind of writer I am: fitting writing around everything else. And that kind of juggling is trying, at times. I have a full-time job, a spouse with a job he finds rewarding but which won’t pay the bills alone, a part-time career as a freelance editor, AND I have written three books I’m working on getting published. I’ve said it before: how exactly am I supposed to do those things and actually have a life of any kind? It feels overwhelming.

(Side note: I think a bunch of people who cater to authors are taking advantage, selling “must-have” products that “guarantee” success. They disgust me; I hope the people buying those products are independently wealthy.)

However, I have made my choice in how to get money to live while also being a writer. While, sure, I’d love to win the lottery next month or something, I don’t think I’d ever feel comfortable being “sponsored” by my husband or another patron; we are partners, and it is my responsibility to carry my weight in our relationship, financially, in the household, and otherwise. One of the main reasons I have an editing side business is that I can feel confident using the resulting income to pay for resources in my own publishing dreams (also, it is SUCH a kick to see a book I’ve edited actually go on sale. Some have even won wards!).

For me, the juggling is worth it, even if it’s challenging at times. I need to feel like I’m helping my family forward, even if that means my books don’t churn out as quickly. That’s a choice I’ve made.

What about you? How do you manage your household while writing? Do you wish you could do it differently?

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Review: Dave Ramsey’s Complete Guide to Money

Dave Ramsey's Complete Guide to Money: The Handbook of Financial Peace UniversityDave Ramsey’s Complete Guide to Money: The Handbook of Financial Peace University by Dave Ramsey

My rating: 3 of 5 stars

If you’re unsure about how to manage money, or have already made some big mistakes and are trying to recover, or just want to brush up on some obscure things, this book will likely help you out.

HOWEVER…it has its flaws, despite the enthusiastic baying of many of Ramsey’s constituents.

I received this book as a very well-intentioned gift to help my new husband and I get our marriage started on the right foot. I’m already persnickety about how I manage my money, so I may not be the ideal audience for this book, but as much as I read about personal finance, I figure there is always room for a little more knowledge.

I did find it practical. Ramsey uses folksy analogies and down-to-earth language to explain the sometimes high-falutin’ financial language that can be a barrier. His strategies are fundamentally simple: don’t be in debt, save money before you buy something. He has undoubtedly helped many people find a workable strategy to put themselves on a path to financial security, and that is to be commended.

But I found parts of the book deeply distasteful. My concerns:

It’s Self-Serving.
You’ve probably heard of Dave Ramsey by now. He has a radio show, a whole series of classes and DVDs, and several books. This book aims to make sure you know who he is–the appearance of his name TWICE on the front cover, as well as the plug-in for his class “Financial Peace University,” is just another way to build his personal brand.

Now, that may be unavoidable–it is a self-help book, after all–but the repeated references back to Ramsey’s personal products, other books, and stuff he’s selling started to make me feel like I was at a flea market (want this? How about this? No? Well, you definitely need one of these!). Ramsey’s a smart marketer; if he can get his hooks into you with this book, he hopes you’ll buy everything he’s ever made.

He Doesn’t Think Much of Women
I’m sure if you spoke to Ramsey–and he seems like a very affable and likeable guy–he would insist that he loves women and that I’m crazy for suggesting this, but his own book would be great evidence against him. Ramsey may like women well enough, but the book repeatedly takes a “that’s nice, little lady” tone. Women are called out repeatedly based on negative female stereotypes–“stop shopping ladies!”–and reminded that they are best in the home with the kids, whereas men are repeatedly held up as the providers, the “real men” who “take care of their families,” the ones who are the responsible ones.

Even when he praises women (mostly via his wife) he is slighting them with more aw-shucks patronizing: following an apocryphal tale of President George H.W. Bush wherein Barbara supposedly gets the upper-hand, Ramsey discusses the way decisions are made in his family–he makes decisions and “if I’m not careful, I’ll just roll right over her when it’s time to make a decision. It’s not that she doesn’t want to contribute…”

Let me finish the line for him: it’s that he’s already made up his mind and his wife’s vote isn’t as important.

This is further shown in his advice, including that married couples have one bank account and one only. That may work out very well for some people, and the more power to them, but having one bank account and no money of their own is one of the most common ways women end up poor: husband leaves, takes all the money and there is nothing in her name (or, she wants to leave, husband takes all the money, etc.) I feel strongly that both spouses need some way to access at least some money without involving the other.

Evangelical
Ramsey does a good job of talking to the reader as if you are just like him. Which is great, and is a sign of excellent persuasive writing! Except. Ramsey is an evangelical Christian, and you may want to avoid this book if you aren’t as well.

Even though I’m a Christian, I must not be the same variety as Ramsey. I felt that I was being beaten over the head with the Bible every other page for awhile there.

And while I am happy that folks have a spiritual life they can tend and enrich themselves with, Ramsey doesn’t even cater to the idea that you may not be the same. The chapter on giving never mentions how to give to charity except through your church. Further, his example about giving exorbitant tips to waitresses on Christmas Eve fell flat with me. He says the only reason a waitress might work that day is because she really needs the money. Well, Dave, I came up with a few other reasons:
-Her boss won’t let her have the day off, and while she doesn’t need the money so much this month, she needs long-term job security, and that means she doesn’t get to pick.
-She’s Jewish/Muslim/Buddhist/FSM-ist and doesn’t celebrate Christmas.
-She’s Christian, but is celebrating Christmas in two weeks because that’s when her family can all get together.
-She thinks she’ll get extra tips from the travelers desperate for a meal on Christmas Eve. And besides, it’s generally quiet.

Four reasons I just thought off on the spot! Not everyone is the same as you, man.

Additionally, as an intellectual-type person, it is useless to me when he provides a Bible verse as the reason why I should do something. Sorry, I want evidence. History has shown that Bible verses can be made to fit just about any situation.

Anathema to Debt or Help
This is tricky, because I almost agree with him here, but he takes it to extremes that I find uncomfortable. Ramsey repeatedly insinuates that money should not come to people from the government, and further suggests that putting “burdens” on wealthy people will “make the golden eggs dry up.” I see your Trickle-Down Economics at work, sir. Let’s just say I disagree and found his mixing of politics with finances when it isn’t needed.

But further than that, he is completely 100% opposed to debt. On paper, I agree with him: debt is not a positive, and, particularly for people struggling under a mountain of debt problems, his strategies will be effective. But I think it’s short-sighted.

Debt, in my opinion, is like a pit bull: Sure, it can be awful, but it can also be useful tool when used properly. Much like a pit bull can be one of the meanest fighting dogs out there in the hands of an abusive animal, debt can turn on you quick. But a pit bull well cared-for and attended to will be the sweetest dog in the neighborhood.

I think his “no debt at all” view is problematic in particular for young people. Ramsey’s quite a bit older than me, so perhaps he doesn’t remember, but having zero credit history (yes, that means zero history of debt) will make it hard to get: an apartment to rent; a job (they sometimes check the scores); a car; and, eventually, a mortgage on a house. Zero credit history is treated the same as bad credit history, and refusing to teach people how to handle credit responsibly means young people who end up in a bad spot. Additionally, his “pay cash for everything” strategy is an effective way to get him something else he rails against: kids coming back after college.

One of the things that most upset me in this book was a story from a reader about how her son was going to school, the Dave Ramsey way! It is featured as an example of doing things right, and it hit me like a brick. In this story, a boy works hard in school, gets several scholarships, and his parents have saved money for some of his tuition for college…but it’s not enough. Because they are following Ramsey’s preachings, they don’t get a loan of any kind, but instead pull their son out of college. He was already accepted, but he is forced to withdraw (wiping out, by the way, all that prepaid tuition money).

He goes to community college (which has a drop-out rate of well over 50% right now) and then…drops out after one semester and joins the Navy. The story was submitted before the boy finished, but supposedly he was working on college classes while he was in the Navy. (This story is on page 251)

This story just breaks my heart. It’s not a triumph. This kid was on a path to go to a good school in his state, but his parents dropped him rather than let him take on a loan. As a result, he is working on a ship somewhere far from home. I have a dear friend who went to the Navy, and…it’s not easy. It wasn’t this kid’s real choice. He learned that his parents won’t support him in his future. I feel sorry for him.

The mom says “saying no to college was hard, but it turned out to be a good thing.” Yeah. A good thing FOR HER.

Mistakes
I found copy editing mistakes a few times, which always makes me leery, but then I found a glaring error of fact, which scares me more–a book is a big investment, so the time should be put in accordingly. When it isn’t, it makes me worry about the rest of the content (the mistake is this: Ramsey cites the New King James Bible as the “first in the English language.” It wasn’t. It’s the third, and was created not as a way for folks to access scripture but as a political move to consolidate a divided country.)

In Sum…
This book has exceptionally good advice to help people get out of debt and establish new patterns. It’s written for those who don’t know much of anything about financial planning or organization. The basics are sound, and I found the chapters on insurance and investing basics to be the most informative and helpful. I also like that it comes with budget worksheets in the back.

That said, this book is not for everyone. And I would say that it–and all the rest of the Ramsey brand–absolutely should not be the exclusive place you get advice.

It comes down to what you value. My impression is Ramsey values money (the having, and the dispensing of it) above all else. In order to have money, he advocates sacrificing time, personal interests, sleep, a diverse diet, and educational opportunities for your children. Me? My values are a little different than his. Take his advice, therefore, with a grain of salt.

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The Missed Tax Opportunity

I’ve got a beef. Now, it’s considered rude to discuss politics or religion in polite company, but y’all readers (who more likely than not are also writers) may share this beef, so I figure I might as well tell you.

It’s about everyone’s favorite thing to hate: Taxes.

First, let me be clear: I actually don’t mind paying taxes. I know, that sounds hard to believe, but it’s true. Taxes are good, in that stuff that the community at large needs gets paid for. I like having schools; I prefer it when my roads are well-maintained; I think it’s a good idea that our service men and women have sufficient armor.

But there is one tax that I think is just wrong-headed and counterproductive: self-employment taxes.

It’s a little tricky, so let me explain. When you work for someone else, some of your income is taken out to go to Social Security and Medicare and stuff like that.  Then, come tax time, you also pay any additional income taxes you may owe–this is set up in income brackets. Generally, it’s a percentage of your income. Mine is about 15% last I checked. At my last job, everyone in my general rate of pay wound up overpaying the IRS, resulting in a nice happy refund.

But I didn’t.

What was the difference? Self-employment taxes.

See, I had been honest on my taxes and reported that I’d earned a little bit of money from my side business as an editor. But I was only using one of those answer-the-questionnaire programs, so I never had any human to actually advise me. If I did, they would have explained this part for me.

Because, as a self-employed person, there is no one to take out those SS and Medicare-type taxes, the government puts that on for you come tax time. It’s aptly called the self-employment tax. It’s about 12-15%, depending on the year. And then, in addition, you pay income tax. And they stack, making my estimated taxes on my side business 30%. That’s a considerably more uncomfortable number, particularly because it’s a very small business.

On top of that, the IRS expects a check from self-employed folks 4x a year, so they are regularly getting the money needed to run the country. Rather than just paying taxes through an employer and once a year, a small business owner has to pay regularly. And if you don’t know that or miss a deadline, you get charged interest.

It can be quite surprising.

So last year, even though I made a very paltry sum in my side business, it threw off my total earnings and meant I had to pay Uncle Sam instead of getting a refund. This was disappointing, so I’ve been doing my homework this year to try to get ahead.

But like I said, I don’t mind paying taxes. My problem is: this kind of tax discourages people from starting their own businesses. And, considering a) how turbulent the economy has been and b) how we as employees can no longer trust that business loyalty between worker and owner goes both ways (ie. that you won’t be fired), encouraging more people to be self-employed–even just partially–is a great idea.

I had the privilege of hearing Dr. Muhammad Yunus, the founder of Grameen Bank, speak several years ago. Grameen Bank is all about providing small loans (microloans) to the poorest of the poor to help them start their own businesses. His work is literally transforming his home of Bangladesh, and his model has been adopted all over the world.

Unsurprisingly, Dr. Yunus is also a big fan of self-employment. It is safe to say that his talk and book inspired me to start my own business, too. But Grameen Bank is really struggling to work in the United States. Why? These kinds of taxes–even just the part about it being difficult to learn about what these taxes are–works against the very small entrepreneur. Sure, all the angel-funded entrepreneurs in Silicon Valley getting millions for an app that earns $0 fit right in, but the Etsy seller, writer/editor, or ice cream salesman struggles.

Personally, I think we need to lower that barrier to entry. We could encourage all those people who are on disability in rural areas to earn income, giving themselves a sense of purpose. It would encourage those who are currently hiding their non-9-to-5 income (you know who you are) to come out and be more honest. And it would give a boost to the overall economy, because, while self-employment isn’t for everyone, it can be as steady as the worker wants it to be. (I’ve found it often means I work more than when I’m working 9-to-5 only, because I’m more committed, more interested).

I think it’s just sort of a shame. Obviously it is important that the country’s bills be paid, but I think the current way self-employment tax is structured is a lost opportunity.

Am I the only one who feels this way?

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Writers’ Rates by Type of Publication

This is big, guys. I got to attend a lecture on the “Economics of Publishing” led by agent Evan Gregory while at DFWCon. His talk was great, but this one slide was earth-shaking for me. I think I’m still quivering.

I’ve had to replicate it, as the photo I took with my phone illustrates said shaking.

Royalties By Edition

Publisher Book Price Royalty Author Receives
Amazon, self-pub $2.99 $2.05
Nook, self-pub $2.99 1.76
Smashwords, self-pub $2.99 $1.49-1.74
Hardcover, traditional pub $25.00 $2.50-$3.75
e-book, traditional pub $7.99 $1.40
Trade paperback, traditional pub $14.99 $1.12
Paperback $7.99 $0.64-$0.80

That’s a estimated breakdown of what an author will get, per book sold, using different publishing options.

Pretty sobering, isn’t it?

Now, I realize some people are going to look at this and instantly cry foul and say self-publishing is definitely and always the right way to go, because there’s a big difference between $2.05 and $0.64. And I don’t disagree. But Mr. Gregory had an excellent point: sure, you get more per book, but you are likely to sell fewer–because you have only whatever marketing efforts you personally can generate, without help–and you have a lot more up-front costs, like editing and cover art, and a huge amount of your time, so while this compares the profits you stand to get, it doesn’t accurately reflect the time-and-money investments for each arrangement.

Still, knowledge is power, and learning this figures really changed my perspective.

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Review: My So-Called Freelance Life

My So-Called Freelance Life: How to Survive and Thrive as a Creative Professional for HireMy So-Called Freelance Life: How to Survive and Thrive as a Creative Professional for Hire by Michelle Goodman

My rating: 4 of 5 stars

If you are considering a freelance gig–full-time or part-time, and especially if it’s in a creative field–pick up this book. Goodman leverages her extensive background as a freelance writer and editor to explain the tricky points of starting your own business, and does it all in a friendly girl-next-door tone that is reassuring despite a sometimes-stressful topic.

The book is divided into three parts: Initial set-up (“You Fled the Cube, Now What?”), Getting Ahead (“Sell, Baby, Sell”), and general topics (“Your So-Called Freelance Life”), and each part is divided into chapters on particular topics, like setting your price or figuring out insurance. And she covers a lot–despite the fluffy fun title, starting your own business is serious work, and Goodman reflects that. She offers practical advice, a trove of books and online resources, real anecdotes from freelancers of all stripes, and some wit along the way.

It’s not just for creative professionals, and Goodman does a great job of creating examples for people of all industries–for example, in a section about why you might want to go freelance and still be able to pay the bills, she says “More often than not, your breadwinning work will help you fuel your enthusiasm for the screenplay, crocheted handbags, or life-size ceramic replica of Margaret Cho you’re chipping away at on the side.”

Interestingly, this book IS targeted to women freelancers, something I guess I was supposed to assume from the cover’s pink writing but honestly surprised me when I realized it 20 pages in. Nothing about the front or back cover (except the pink) says this is a no-boys-allowed book, and I don’t think it really needs to be. Despite the occasional mention of things that are slightly gendered, like childcare, I think a man starting out on his own would benefit from Goodman’s sound advice as much as any woman. (I’m pretty sure the IRS doesn’t come after female freelancers only, if you know what I mean).

While it does claim to help freelancers from the beginning up, I’m not sure it quite does. I would have liked to see a whole chapter related to “getting your business started,” beyond the nuts-and-bolts “what do I charge?”-type questions. Though she mentions that all freelancers she knows have taken some kind of temp job to support their freelancing, she doesn’t really explain, and you don’t get a sense of the reality of the beginning of a business except through cobbled-together snippets scattered throughout. While the chapter on time management (at the end of the book–I had to skip ahead and read it sooner because it felt pretty urgent to me) might help a phone-always-ringing professional like Goodman, it doesn’t offer much for a newbie, so you’re more or less on your own there.

Similarly, I plan on picking this reference up again as topics become more relevant to me: protection against lawsuits isn’t at the top of my list when I’m still figuring out if getting a business card is worth it.

Overall, this was a very helpful and inspiring book and I’m glad I found it before I got my editing business off the ground.

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It Adds Up: The “Real” Cost of Self-publishing

I found this Bloomberg article on the costs that (can) go into self-publishing really interesting. I don’t think it’s 100% accurate in all cases (for example, some of their steps are skippable or there are cheaper options out there), but it is a good snapshot. Just like the article I found about how much you can expect to earn at each “level” of self-publishing success, I felt this article provided a good benchmark.

In summary:

  • Editing: $500 – $1,460
  • Cover art: $200
  • Interior design: $0 – $1,400
  • Book printing: $6.77/book -> $8,800
  • eReader formatting software: $39
  • Single ISBN: $125
  • Kirkus Review: $550
  • Website: $2,300
  • Color business cards: $45
  • Press release printing: $100
  • Facebook announcement: $300
  • Direct mail: $1,000
  • Distribution: $200 up front (plus a cut)
  • One-stop shop: $5,000 – $6,000

Potential total (leaving out distribution and one-stop shop figures): $13,959 – $16,219

Ouch.

Even considering that I wouldn’t do some of the above, or would do them much more cheaply, those numbers are very scary.

If you are self-publishing, what do you expect it to cost? How do you plan on paying for it? Because I seriously doubt most “starving writers” would front even that $5,000 cost, but then, maybe it’s my sensibilities that are off.

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Identifying Writing Success

From https://i0.wp.com/public.wsu.edu/~hughesc/1990.24

That is one fine lion coat, sir.

Since writing my first novel two years ago, I’ve learned a lot about the publishing industry. I’ve learned that writing a book–while a Herculean task in its own right sometimes–is barely the beginning. (Don’t forget, Hercules had to deal with 12 labors, including mucking out a seriously grody stable and killing or capturing a bunch of murderous monster-animals. But he did wind up with a nice fancy lion-coat! So that’s something, right?)

I’ve learned about query letters, networking, meeting agents and publishers, and the several varied paths to publishing. I knew it wasn’t as easy as “write book, get published,” but even with the wonders of the Internet and mass communication, the actual process of getting published is mysterious. It’s been hard for me to figure out which way is up, who is honest, and how to avoid hucksters.

That’s why I was so excited when I found this post (Measuring Success via IndieReCon) so reassuring: it’s a pretty clear road map for what it means to be a financial success as a self-published author.

Author Susan Kaye Quinn breaks down indie success with actual dollar amounts. If I decide to self-publish someday, I’ll be grateful to have this as a guide to understanding what I should be aiming for. Heck, even if I find some success in the traditional publishing route, I find these numbers reassuring. I’ve read many resources, in print and online, and most of the time, dollar amounts and sales targets have just been hinted at. While making my own goals is essential, having a sense of the industry’s markers helps me feel grounded, and I hope it will help me make reasonable decisions.

I’ve yet to decide which publishing path is right for me (though I am currently seeking agent representation!), but I will be using that Measuring Success post to help me suss out my personal writing goals.

What are your goals for your writing?

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