7 Habits of Financially Savvy Writers

*Note: This article originally appeared in the 2015 Writer's Market, edited by Robert Lee Brewer.

We all know the stereotype of “the starving artist.” Fun work, little pay. But just how true is that stereotype?

For the writer, it depends on a few things. First, it depends on how you value yourself as a writer. Are you a hobbyist, writing on the side either strictly for pleasure or for a bit of extra income? Or are you a professional, going at the business of writing as a day job?

Make no mistake: There is nothing wrong with writing for pleasure. But if writing is your profession, or if you strive to make it your profession (good-bye, day job!), managing the financial side of your trade is crucial. How you handle money can make or break that notion of “starving artist.”

Many writers don’t take time to consider the importance of finances in their profession, acknowledges Hope Clark, an author who heads the popular Website and newsletter, “Funds for Writers” (www.fundsforwriters.com). “If they do consider it,” she says, “they treat it with trepidation.”?

Why? Perhaps it’s because, so often, the creative overrules the practical aspect of making a living. Your burning desire to pen the next great American novel shouldn’t be ignored. But writers who can balance the creative with the practical are the true professionals.

This is what “financially savvy” boils down to, says Mridu Khullar Relph, whose freelance articles appear in The New York Times, Time Magazine, Christian Science Monitor and elsewhere: “It’s making sure you make the right decisions financially to be able to sustain your career and create time and space for yourself to work on projects you may believe in but that may not be lucrative.”

Adds Clark: “We cannot just be artists. Writers have to be business people, as well.”

Read on for 7 ways you can be more financially savvy as a writer.

1) Market, market, market

Marketing is crucial for two reasons. First, it pushes your ideas into the world. Second, it pushes you and your skill into the world. Not only must you market your work; you must also market yourself.

“Marketing is the number one thing you need to do to make it as a writer,” says Linda Formichelli, a freelance writer whose articles have appeared in Redbook, Family Circle and Writer’s Digest, among others. “You can be the best writer ever, but if you don’t market no one will ever know about it – or pay you.”

Marketing is a never-ending process. Relph strives to make one marketing effort a day: an email, a follow-up phone call, a tweet.

“Finding an idea that gets you excited and then writing to an editor with the potential that idea holds, is the honeymoon phase of the project,” she?says, “when all possibilities exist and anything could happen.”

Stay on top of your marketing efforts by having a system in place that tracks your ideas and potential markets for those ideas. I maintain two documents. My “Active Query Tracker” lists ideas I have pitched, the publication to which I sent the query and the appropriate editor’s name and contact info, and the expected response date. My “Ideas List” includes all of my story ideas, each followed by a list of potential publications that fit the idea. When I receive a rejection, I delete that idea from my “Active Query Tracker” and strike out the publication on my “Ideas List.” Then, I pitch the idea to the next publication in line and update the “Active Query Tracker” as necessary.

2) Think of yourself as an entrepreneur.

Anyone will concede that it’s important for entrepreneurs to be financially savvy.

“The minute a writer decides to sell his work, he shifts from writer to entrepreneur,” says Clark.

But too many writers fall short of this realization, focusing only on the creative output. The result? Lots of fantastic words and ideas that go nowhere.

Hate promoting yourself? Join the club. Feel clueless when it comes to the business end of writing? Take a class on accounting, marketing or running a home business. Such classes are often offered through community centers or colleges.

Relph draws these similarities between writers and entrepreneurs: “We come up with big ideas that others may or may not believe in and spend large chunks of time chasing them down and bringing them to fruition.”

The difference, she says, is that entrepreneurs have a business model. Writer’s often don’t.

Entrepreneurs invest in their trade. As a writer, it’s important to put money into your venture, investing in supplies and experiences that will improve your craft.

Clark points out that many writers are so concerned with saving precious writing dollars that they don’t pause to consider what might be reaped from spending. They won’t pay for a cover design, to save a few dollars. They won’t pay for a class they sorely need to improve a certain skill. They won’t hire a professional to design their Website, falling back on the mediocre skills of a friend who will do it for free.

Entrepreneurs know that quality up-front investments will pay off in the long run. Becoming an entrepreneur means being proactive. It means recognizing opportunities when they arise and going after them wholeheartedly. Yes, there is risk involved. But what pursuit worth chasing doesn’t involve some risk?

3) Be your No. 1 fan

You’ve heard it since grade school: A confident attitude goes a long way.

“A confident writer has no problem putting herself and her work out there,” says Formichelli. “And that’s where the money comes from.”

Editors want to hire people who know what they’re doing.

“I really believe that as independent professionals, how well we present ourselves plays a huge role in how much work we get and what we get paid for it,” Relph says.

Relph once queried an editor at a UK-based Asian magazine and received a favorable response, under the condition that she would write the first article for free and then be paid a modest fee for each article thereafter. Relph declined the assignment. She couldn’t afford to work for free, she explained, and her usual rate was twice what the editor offered for future pay, anyway. The editor responded, saying she would pay Relph that standard rate, for the first story and all stories thereafter.

Similarly, a lack of confidence can directly result in a lack of work. Procrastination and perfectionism are two big career killers, Formichelli says, both results of a lack of confidence.

If you don’t believe in yourself, no one else will, either.

4) Keep receipts and pay stubs, and track income and expenses.

Writing is a numbers game.

“You need to know how much money you have coming in versus going out, how much you need to charge to earn what you want, and what your typical hourly rate is,” says Formichelli.

Relying on hard numbers is crucial. How else will you know what sort of income you’re earning, or where that hard-earned cash is going?

“Lots of writers assume or just want to believe that the only thing they have to do is write, and the rest of the stuff will take care of itself,” says author John Scalzi. “It won’t, and it doesn’t.”

Formichelli suggests using an accounting system like Freshbooks to make the in/out record keeping simple. I use an Excel spreadsheet, with one column that tracks income and another that tracks expenses. Allena Tapia, a freelance writer/editor and owner of GardenWall Publications, suggests using the week between Christmas and New Year’s Day to prepare a chart for the coming year, so it’s ready to go come Jan. 1.

Crucial to your accounting system is sending invoices for every assignment. Many writers miss this important step and therefore chance losing payment for their work. Think about it: If you never received a bill from your utility provider, would you still write a check? A simple invoice takes just a few minutes to write and send.

Maintaining records requires diligence. And diligence is tough. But it is so worth it in the end.

5) Diversify your projects

Writers are wearers of many hats.

“Some things you do for the glamour, some you do for the money, some you do for personal satisfaction,” says Relph. “Having that mix is what makes a freelancer successful.”

Love to write fiction? Why not pitch to a writing magazine a service piece on how to sketch compelling characters? Have a penchant for realty? Consider offering your services as a copywriter or proofreader of newsletters and web content for realty companies in your area.

I recently started offering services as a freelance editor alongside my writing gigs. I contacted some nearby writing centers and offered to teach a series of workshops in my genre, nonfiction. The extra work keeps my business fund healthy when the writing assignments are slow in coming. What’s more, the variety of projects is rewarding and keeps me on my toes.

Yes, you may have to venture into some work that’s not as fun, to pad up your bank account. But treat those experiences as chances to expand your portfolio. Work such as technical writing or copywriting often pay better than the more creative end.

“You want to earn enough to create the time and space to work on projects that you truly enjoy,” says Relph. “If you’re earning great money in half of your working life, then you can dedicate the rest of it to writing whatever you want, without having to worry about the market.”

6) Acknowledge mistakes, and then move on.

Face it. No one is going to write a winning query every time. Nor is everyone going to nail every assignment on the first draft. Stephen King pounded a nail into his wall, on which he hung every rejection letter he received. When that nail filled up, he got a bigger nail.?

Good writers work hard. Good writers fail sometimes. But good writers also learn from their experiences.

I once pitched a strong query to a top children’s magazine. Though I had never written for the children’s market, the idea interested me, and the editor responded favorably, requesting the article on spec.

I rounded up sources and wrote the story. But, not being a children’s writer, I struggled to fit the story to an audience of 6 to 12-year-olds. Consequently, the editor rejected the story, saying it was not suitable to the magazine’s readership. Lesson learned? I am not a children’s writer. Now I choose to focus on those markets I know I can handle.

7) Read contracts carefully, negotiate fair rates, and sign only if you understand and agree with all of the terms.

Contracts are nothing to fear. They are simply documents that outline both the writer’s and the client’s terms regarding a specific assignment.

In other words, a contract is a communication tool.

Knowing what rights you give up as a writer for what financial return is part of being proactive – and professional. Know the difference between First North American Serial Rights (FNASR), which grants a publication the right to be the first to publish your work in a North American market (giving you the opportunity to sell reprints later on) and All Rights, which grants a publication exclusive rights to your work.

Don’t want to give up exclusive rights to your work? Have the courage to say “no,” or negotiate a different arrangement. Think five cents a word is not enough? Ask for more.

Negotiating fair rates is an act of confidence, Formichelli points out. It is the writer’s way of advocating for himself and valuing his work.

Art must have two components to be professional: It must have a creative side, and it must have a business side. It’s easy to fall back into the romanticized image of “starving artist” if you’re a writer who just can’t make ends meet. But before you toss in the towel and concede that writers are just undervalued professionals, ask yourself how well you practice these 7 habits.

The self-sustaining writers last the longest, says Clark. And being regarded as a self-sufficient wordsmith is a heck of a lot more rewarding than being regarded as a starving artist.