Money Mindset
EPISODE 2:
Your money mindset determines every aspect of your freelance writing and editing business. It's also a key to long-lasting success: Making good money allows you to live a life based on what you value, and it provides the stability needed to make good art.
In this episode, Wudan and Jenni talk about how to determine your rates, how to math out your goal income for each month, and why it's important to be shameless about wanting to make money. They also discuss how much they make each year as freelancers (and how they got there), why financial conversations about freelancing should also address privilege, and why paying the rent really does improve your writing craft.
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Full Transcript Below:
J- Hello, and welcome to The Writer’s Co-op, a business podcast for freelance writers everywhere
W- We’re your co-hosts! I am Wudan Yan
J- And I’m Jenni Gritters
W- We’re so excited to be back!
J- This week, we’re talking all about money. Money Money Moneyyyy.
W- We talk about money so much via text.
J- Seriously. It’s important! You can’t write good things if you aren’t making enough to have a stable lifestyle.
W- We literally almost titled this podcast “FU Pay Me,” but we thought that would be a bit too on the nose…
J- Yeah, even though we went with a more… conservative name… we’re still going to talk a lot about money in each episode of this first season, and also about how to get paid, because that’s one of the major hurdles of freelancing, we think!
W- To this point, we’re going to be pretty transparent in this first money episode about how we’ve each set up our finances and about our own financial privileges, because we think it’s important to talk about money even though it can be awkward. We’ll even tell you how much we make every year.
J- I really like to be explicit with my finances and talk about how much I make, because I think it’s the only way for us to all move forward. Rising tide lifts all boats, and all that.
W- Specifically we’re going to spend today talking about your money mindset, so how to set up a financial system that works for you, how to figure out how much you want to make, and how you think about money philosophically.
J- During our first episode of this season, we talked about values, and how determining your values-- or what you care about-- is important for building your business. Today’s episode, about money, builds off of that. Your money mindset-- or, how you think about money-- determines how you set up your schedule and pick your rates. It’s how you build something that gets you living a life you value. I really believe that you have to vocalize what you want in order to get it, especially with money!
W- Definitely. This is ground zero-- if there’s anything we want you take away from this episode, it’s that your money mindset governs how you work. It also affects the quality of your work -- because getting paid more usually allows you to spend more time doing good work. So where should we start?
J- Let’s first talk about how we each think about money… go a little bit meta. What does money mean to you, and what’s your relationship with it?
W- Ooooof. This is deep.
My parents immigrated to the US with me so I grew up with a scarcity mindset. The one thing I’ll never forget about my childhood is this small accordion file my mom had with coupons for every single store imaginable. So saving money and trying to live within my means has been ingrained in me. And I guess, all along, I’ve been pretty good at not going in the red with money. The first job I had out of college paid me around $26,000 to work as a research assistant in Houston, Texas. Texas has no state income tax, my studio was about $600 a month, and somehow I made do. Then I was in a PhD program for a while, in New York City, and they gave us something around $35,000 for an annual stipend. My housing was subsidized through the institute, so I was never paying more than $900 or so a month for rent. Somehow, even though I was living in New York City, I made it work!
J- That’s some budgeting!
W- Yeah, then the first year I went full on freelance -- so this was after I tutored for a while -- I made around $40-42k? And I was still building up my client base then. It wasn’t a bad year, but I was hustling like crazy. I took on lots of assignments that in retrospect didn’t pay enough. But I needed to build my portfolio, and there’s that really tough tradeoff as a young writer. But relative to how much I’ve earned otherwise post-college, that felt like a lot, and I was able to manage that money, and make it last. But it’s interesting to think about how our relationships with money start from when we’re young.
J- I think this is key, because we’re all raised with certain ideas about money. For me, I was raised in a household where finances were always presented to me as a puzzle I needed to solve, so I rarely get super emotional about money. But my husband is the opposite, and for him money talks are really stressful and emotional! Your original mindset often depends on how finances were discussed (or not discussed) in your home when you were a kid.
W- For sure. And my parents were very practical about money. I remember when my dad in grad school, he also delivered pizza on the side. So i’ve never had shame about where money was coming from, as long as it was done ethically. Anyway. Enough about me. Tell us about your story, Jenni.
J- This is a story my friends love, but when I was 16, my parents gave me all of my allowance for the whole year in one go. I think it was maybe $1000, and I had to track my expenditures on an excel spreadsheet, essentially keeping a budget. If I did a good job, I got a little more money the following year. So I was always that kid who went out to buy my own back to school clothes and lunches, and then meticulously saved my receipts and charted it all in a spreadsheet. So intense for a 16 year old!
W- Wait, hold up. So you somehow spent an average of $2.74 a day.
J- Yup.
W- HOW? Did you have money left over?
J- I think I spent every single penny of it! Keep in mind, my parents were still buying groceries and paying for my gas, that sort of thing, but I had to learn to budget for anything beyond the necessities. That amount was just supposed to cover my “discretionary” spends. For example, if I got a coffee one day before school, I couldn’t get one the next day. Or if I needed new jeans, I needed to not buy anything for a few weeks. I packed lunch a lot. There’s a joke in my family that my dad had to give me socks every Christmas because I would never use my own money to buy socks, and then all my socks had holes in them.
Someone said the other day, oh, you’ve been running a business since you were 16. And I guess that’s true! But I’m thankful that my dad taught me a lot of this stuff early on, because I definitely still use it now, and I’m really savings-minded because of it.
W- How does that trickle down into your freelancing business?
J- I think, compared to most people, I’m really meticulous about knowing where my money is going and where it’s coming from. Also, I’ve been really explicit from the start that I want to make money. And I want to make A LOT of money. I have no shame in saying that ---
W- Remember what we said in episode one: be shameless!!
J- Yes! When I decided to launch my business, I did a bunch of math to figure out how much I needed to bring in every month to pay my bills and do the things I wanted to do-- like travel, or take a maternity leave. That information helped me determine and stick to my rates, which helped me hit my financial goals.
What about you? How did you think about money when you first got started, and what does that look like now?
W- A big part of my financial privilege is that I don’t have student loans! I’m really amazed by my parents, because they came to the US with hardly any money and earned enough money in their respective careers to put me and my brother through college. And I didn’t want to go to journalism school because I didn’t want student loans. I actively did not want to spend money on an education that I thought I could learn by trade.
So when I embarked on my full-time freelance --- so, after tutoring, and after spending a brief stint in Thailand which I kind of don’t count because it was so cheap to live there -- I wanted to make at least $3000 a month. That didn’t sound like much to me, but it’d be more than I was making in grad school, and I knew I’d be able to budget accordingly otherwise.
J- Okay, so that raises a big question: How you determine how much you need to make each month?
W- I usually like to total up the basics.
J- Yeah, that’s my method too. When I started, I looked at a few months of our past finances to figure out our monthly expenses. Knowing all of that helped me figure out that I needed to make $8,000 each month. I would see about $6500 in my bank account, if I accounted for 25% of that money going to go to taxes.
W- By the way, if you’re a Patreon All Access member, you’ll get an email with tips and tricks, plus a worksheet to help you figure out your monthly target income.
J-- The worksheet will explain how both of us do what is essentially budgeting and financial planning for ourselves and our businesses!
It doesn’t really matter what system you use-- a spreadsheet, an app, whatever. The important thing is finding the information about your financial behavior.
W- Depending on where you live and what your lifestyle is, your number might be in the thousands, like ours. And… this number might look big and scary. But I think that’s a gateway for you to be bold and ask for more money.
J- Yes! Once I knew how much I needed to cover monthly, I asked my clients for payment that would help me meet that goal. To calculate your rate, figure out your monthly number and divide it by the number of hours you plan to work. Then that’s what you charge your clients! I rarely go under $50/ hour for my work-- if I charge less than that, I won’t meet my monthly goal.
Also, I’m going to say this like 17 times in this podcast, but: it’s okay to want to earn money. In fact: YOU DESERVE IT. As women and minorities, I think we often don’t think we can ask for money. But I like money! I want more of it! And I need money to support my husband and me-- and our kid!
W- I know. Maybe it’s that as writers, we think about what we produce as ‘art,’ and there’s this stereotype of writer as starving artist. But that’s not sustainable at all.
J- Yes, I encounter a lot of writers who are more concerned about craft than making rent. But you need stability to make good art. You really do need money.
W- All that’s to say, on target incomes and all that -- sometimes I didn’t meet my goals. Things happen! And my annual income has really fluctuated quite a bit depending on how much I travel -- I can’t really take on other projects when I’m on the road.
J- Yeah, it’s so hard to do work on the road, because that can be all-consuming. And I’m the same way… I often look at my months in 3-month groups, so like, am I making an
of $8k per month? Or $24k over 3 months? Because work ebbs and flows, and so do paychecks. Often, one month will have $2k of income and then the next will have $10k.
W- So. Jenni. Hardball question. How much are you making now, on average?
J- I wrote about this on Medium and I always get messages about it. I also sat for an interview with the Seattle Times about
of my finances, including how many loans my husband and I have-- which at the time totaled close to $100,000. People were shocked that I was so transparent, it was like they had seen me naked! But I don’t think there’s any shame in talking about money. It’s just a number.
So okay: Through my business, ZEST Storycraft, I made $120,000 during my first year of freelancing, after expenses. If you look at the last calendar year, 2019, the one I’m filing on my taxes right now, I made $135,000 after expenses. 25% of that went into a savings account for taxes, though, so I saw about $100,000 in my actual bank account. It allowed us to pay down loans, afford our lives, and set aside money for maternity leave, which I’m on right now.
I generally make my goal amount of between $8000-$10,000 during any given month, sometimes a little less and sometimes a little more.
What about you? How much do you make?
W- It’s hovered around $50k the last three years, give or take a few thousand bucks on either end. This year was around $54k. Again, it varies with how much I’m traveling. I’m okay with it! It’s enough for me to live on, and stash some money away, but I want to make more. It’s challenging for me to find the balance of working on passion projects vs. finding things outside of journalism that pay way more. I think the former has really overtaken the latter just because I feel like I’m still trying to establish myself as a writer on different beats and there are tradeoffs.
J- Yes, this is where that values stuff comes in. Your values are going to determine how you want to run your business, and you can set up your finances to make that lifestyle possible.
W- Speaking of lifestyle, you know how sometimes you see freelancers on Twitter being like “omg, I’m down to my last $50?” We don’t want you to be that person! We don’t want to be that person! Tracking your money will help you not be that person!
J- That gives me SO MUCH ANXIETY. Because you can’t trust that your clients are going to pay you on time. But what do you do when they pay late? How do you pay your rent? My answer to that question is that I keep money in a business checking account and pay myself a set amount each month, so I have money leftover for slow months.
Wudan, do you have an emergency savings account like all the “expert finance people” recommend, for when paychecks don’t come in?
W- Yeah, like I mentioned in my first episode, I didn’t have six months savings in my checking account when I started freelancing, and I certainly don’t now, because it’s really really hard to save that much -- at least in my experience. For now I know when my personal account dips under $10k: THAT IS BAD. That’s a big red flag for me. Living on $3k a month in Seattle isn’t pretty, but if I had to make it work, I probably can. Do you have one?
J- Yeah, I do… it’s in the same savings account spot as my tax money, but I don’t have as much in there as everyone recommends. Probably 2ish months. We’re working on putting more in there, like 3-4 months, just to be safe now that we have a kid.
W- Yeah, I don’t think you need to have what’s recommended, but you do need to have a backup. Decide what your financial comfort or risk level looks like, and stick to it.
I also feel like we should talk about the privilege of having a safety net, or family money, or partner support. I get looped into conversations ALL the time on Twitter about this. Like, “oh if you didn’t go to a big name school and you’re from a small town and not married, freelancing becomes insanely harder for you.” What do you have to say about that?
J- I do think there is a huge amount of privilege inherent in being able to work as a freelance writer. I got a masters degree in journalism because I got a full ride scholarship. That likely happened because I went to a liberal arts college that my parents partially paid for. Yes, I work incredibly hard, but I’m aware that I started my journey halfway up the stairs.
Also, it’s worth saying that there’s a huge amount of privilege that comes with having a partner with health insurance and a steady salary. My business is built on some measure of stability, which I wouldn’t have without my husband. A lot of financial advice for freelancers doesn’t acknowledge these other pieces of the puzzle-- your upbringing, the support you have, your resume, and beyond. When I tried to freelance the first time, I couldn’t make it work because my husband was between jobs and we needed health insurance, and the state insurance was terrible but expensive. That’s just the reality. I remember, when I started freelancing, an experienced freelancer sat me down to give me advice, and his first question was: Do you have a partner? Then: Is that partner working a job with health insurance?
Wudan, you don’t have that big name journalism degree but you do have a partner. How does that map out for you?
W- Well…. Yeah. I don’t have any journalism degrees but I did my undergrad at an Ivy League school in an unrelated degree. I don’t know how much all that figures into who took me seriously when I got started, though….
I think this issue of not being able to make it work without a degree or a partner really ties into a lack of confidence, too. You know what I mean: that feeling like, “oh, I’m not qualified to email this editor because they won’t respond because I didn’t go to Columbia Journalism School,” or “I don’t know anyone.” Confidence is a privilege, but it can also be built. The internet exists! I like to say it’s the most equalizing factor in all of this. You can find editors’ emails. You can create your own blog, for free, to showcase your work. At least for me, I feel like the existence of the internet is the most egalitarian factor in nearly all of freelancing.
J- For what it’s worth, I think the degree doesn’t matter
You don’t need it. As an editor, I never cared about that. I cared about your experience, your pitch, your story idea.
W- On the partner front, my situation has really changed over the years. When I first started freelancing, I moved to San Francisco for a stint, where my partner at the time lived. He never asked me to pay rent, and it was one of the quietest, nicest things anyone’s ever done for me. Because just trying to make rent in SF could make anyone broke.
Then I was paying rent as effectively a single person for about four years, living with roommates and the like, before I moved in with my partner now. Because of income differences, we don’t split rent down the middle. And I guess it’s a little cheaper to live with a partner. But I’ll say, most of it all - it mentally gives me a nice safety net if a big check doesn’t come on time, or if I’m working on a long term project and I know I won’t see that money for a while. And perhaps the biggest thing is because I manage all our bills: rent, utility, and internet, Max pays me four months rent at a given time, because he doesn’t want to cut a check every month. But also, we’re getting married sometime, which means our finances will also change, and maybe my mindset around it all will also change with it?!??!
J- All of this is to say that our finances don’t occur in a vacuum. Everything about your personal life and your priorities factors in, including your family situation-- what you have now, and where you came from. I DO think it is possible for anyone to succeed at freelancing, but it’s much easier for some of us than for others.
W- So let’s circle back to that first question: How does this money mindset that we’ve talked about all episode fuel your work? Or, put another way, why should people take the time to think through a financial plan before becoming a freelance writer?
J- As I said before, my money mindset gives me a goal and a sense of purpose. I know where I want to go, so I can build a road map to get myself there. This trickles down to my rates, my schedule, my goals, and the way I negotiate. It also helps me know when I can be working each month.
On a detailed level, I work with a lot of brands and I rarely take assignments that pay less than $1/ word or $50/hour. One month, I took a bunch of small assignments and in order to reach my $8,000/ month goal, I had to write over 20 stories for 15 different clients. It was a chaotic mess! So essentially, I make a lot because I’m very productive, but also because I’m pretty aggressive about taking only assignments that work for me financially.
And it’s worth saying that I don’t have as many “big bylines” because of this strategy-- but I’m okay with that, because it’s a choice I’ve made to get a solid income that builds up my family’s savings account and pushes us toward paying off our student loan debt. Plus, making this much means I have time to take care of myself and take vacations, which keeps freelancing sustainable for me over the long haul.
What about you?
W- I pitch places that will pay at least a dollar a word and cover my expenses if travel is involved. I’m actively looking for opportunities that pay a high hourly rate otherwise. As an example, I can be paid $1/word for a single-source assignment for a trade publication at 1000 words. I interview for an hour, put the thing through an AI transcriber and read it (1 hour) I can write 1000 words in 2 hours, I spend another hour editing. That’s five hours spent and my hourly rate is $200. I often say that these assignments ‘subsidize’ the stuff that I really want to work on. Also, And sometimes to make my money targets, I have to negotiate. A little bit goes a long way. It’s a business. I value my time, and I have no shame on putting a dollar amount on it.
J- This is huge. I’ve become more confident about asking for what I need, and I see you working that way too, Wudan, because we know what we need to make and we know it’s possible to get paid well.
At one point about a year ago, right after that story had come out in the Seattle Times about my husband and my financial situation, I was pushing back on a rate with an editor-- it was too low, compared to how much time it would take me to report the story. Like, I’d be making $20/hour when I mathed it out, which was bad-- and the editor said to me: I saw the article about you and I saw how much you make. You don’t need the extra money.
I was like, whoa! Hold up there, sir. You don’t know my financial situation this month, and you don’t know what it feels like to write a $2,000 check every month to cover student loans. You don’t get to decide how much I “need.” I decide. And my time is worth a lot. Eventually, he did end up paying me more for the story, but I really had to fight for it.
All of that is to say: making good money doesn’t sully your craft as a writer. If anything, I think having enough money makes you do better work, because you’re not just hectically taking everything that comes your way and feeling panicked.
W- Like we said before, we’ll send you a worksheet this week, if you’re an All-Access member, that’s all about thinking through these financial set-up questions. How much do you want to make? What are your financial goals? What does money mean to you? What kind of lifestyle do you want to live? It’ll include a list of our favorite tools to use and books to read, and it’ll teach you how to determine your rates. Also, if you’re totally overwhelmed, our VIP membership comes with a monthly coaching session-- we’re happy to help you get set up with a financial system that works for you.
J- Last thought: I’m very proud of the business I’ve built and the standards I’ve set, and that’s a feeling I want everyone to have when they launch a freelance writing business. It’s a BUSINESS. You’re selling a PRODUCT. And you deserve to be compensated for your skills!!
W- 1000%. Be shameless!! You deserve to make money. And on that note, we’re going to head out.
J- As always, if you have further thoughts to share, please send us an email, or sign up for our newsletter on Substack. All of our membership options can be found on Patreon. We’ll see you next episode! Bye Wudan!
W- Bye Jenni!
