Habits
Financial awareness is so important for Big Writer Energy! As a society we don’t talk about money enough and this can lead to feelings of guilt, shame, or inadequacy.
Let’s learn how to become the master of your money, and create a more empowering financial position to be in. I want to note that this exercise does not replace professional financial advice. If you are considering any big changes, or need additional help, please reach out to a professional!
The elephant in the room.
We’re going to have the conversation that nobody likes having – and it’s about money. Yes, it is uncomfortable to get up close to our finances; however, the writing (and publishing) dream demands it.
It is okay to want to make money from your writing. So long as you realise that this will likely take time.
‘Overnight success’ might look that way from the outside looking in; however, I guarantee that person has worked ridiculously hard in the background, probably for many years, to reach that point.
Before we look at our own finances, let’s take some time to examine what is happening in the industry right now. This information might take a swing at your dream, but I want you to remember this:
You have everything you need to make your writing dream a reality.
Understanding the realities of the industry will help you to make informed decisions about the path you choose, and the steps you take along the way.
It may feel like this information is a giant stop sign in your way, but I promise you, knowledge is empowering and it will help you on your way to fully realising your dream.
So, buckle up!
In the 2022 National Survey of Australian Book Authors, ‘the picture of the creative practice of Australian book authors that emerges from the data presented in this report is one of persistence and resilience.’
The research was carried out by Paul Crosby, David Throsby and Jan Zwar from Macquarie University, and was supported by funding from the Australia Council for the Arts and the Copyright Agency’s Cultural Fund.
The research aimed to ‘improve our understanding of the circumstances of book authors in Australia, and to support efforts to foster the growth of a sustainable and productive book industry.’
‘In regard to the financial circumstance of writers, [they found] yet again the income disadvantage that artists suffer in the workplace, despite the major contribution that they make to our society and our culture. These benefits that Australian book authors provide are not reflected in the marketplace, and as an instance of market failure they justify the support of government policy to ensure that they will continue to be generated.’
‘The average income derived from practising as an author is $18,200 with a very broad spread across the different genre groups. Education authors earned the highest average income from their practice as an author ($27,300) followed by children’s ($26,800) and genre fiction ($23,300) authors. Literary authors have a substantially lower average income from their practice as an author ($14,500), followed by other non-fiction ($12,100), creative non-fiction authors ($9,800) and poets ($5,700).’
The research considers other sources of income that authors rely on in addition to their own earnings.
‘Roughly two-fifths of authors rely on the income of their partner and/or a job that is unrelated to being an author, and one-fifth rely on a job that is related to being an author but does not directly lead to the production of a creative work. Approximately one-sixth of authors rely on unemployment benefits or other government benefits, and one-tenth nominated credit card debt.’
The arts industry in Australia is underfunded and underrepresented and the reality of that means that writers cannot rely on funding or grants to write. It isn’t sustainable, nor possible for every writer seeking it.
Due to the competitive nature of creative funding, less than 2% of writers and published authors pursuing funding and grants are successful.
‘For the majority of authors, it appears that multiple sources of income from their profession as an author and other sources of income are necessary. Earning a total income comparable to the average annual Australian income remains challenging.’
‘Recently, the Australian Society of Authors commissioned a report from Nielsen Book in which Nielsen reported on book sales for the last three years. This research demonstrates how few books make it to the top end of the Australian market. Of all the unique titles sold in Australia within 2018 – 2020 YTD, on average, only 1% of titles sold over 1,000 copies each in a year.’
This research only proves how essential it is for writers and authors to generate income from other sources to make ends meet.
The financial audit.
Why conduct a personal finance audit?
This is going to give you an opportunity to objectively assess a basic overview of where you’re at financially, and where you can make more space to pursue your writing and publishing future.
For some people, it will not be possible to make as much financial space as others – the privilege of our situations will vary and it is important to acknowledge that the intersections of gender, race and disability (and more) create additional barriers for access too. Wages and living expenses are not equal.
To begin:
For one month, make a record of EVERY SINGLE cent that you spend. You may want to do this in a ‘regular’ month, excluding any one-off expenses such as holidays, etc.
At the end of the month, categorise every transaction in a way that makes sense to you and add them up so that you can see where you are spending your money.
You can add your spending to the Google doc HERE. Don’t forget to DUPLICATE it before you start!
Categories could include:
Income
Bills
Transport
Subscriptions
Food
Medical
Entertainment
Shopping
Childcare / caregiving
What are your assets? These include any cash amounts in all your bank accounts, property owned, vehicles and income.
What are your liabilities? These include any money that you owe someone else including rent, a mortgage, student loans, credit cards, personal loans, bills etc
What is your total income? Whether you have one full-time job or multiple jobs, you’re going to want to know exactly how much you make. This is important, not only for tax purposes, but for budgeting purposes as well.
What are your total expenses? This is everything you spent over the course of the month including rent, food, clothes, Netflix — if it cost you money, it was an expense!
How much are you saving? This is going to be different for everyone, and not possible for everyone. Our financial situations are individual and personal. Here are some examples of different savings accounts you could possibly set up:
Emergency fund: an account that has enough money to cover three months of expenses (or more!) for times when we might lose our jobs, the car breaks down, or your kid breaks a window. This savings account helps to look after the unexpected costs that come our way.
Short term savings: an account for planned expenses like holidays, paying off loans, large purchases such as computers, TVs, and white goods etc.
Long term savings: an account for bigger and more expensive life expenses such as buying a house, having a baby, buying a car, getting married.
And finally, perhaps you might open one more savings account. This one could be your writing fund, a place to save for professional development, self-publishing, or marketing your future book.
What are your financial goals?
Now that you’ve done the financial audit, you’ll have a clearer idea of what goals you can realistically set for yourself and where can you make changes to get you there.
I have met many writers who dream of dropping from full-time work to part-time to be able to write more!
If you have a similar goal to this that will have a financial impact on your life, this is where you must be really honest with yourself about the difference between what is a NEED and what is a WANT.
Getting clear on what’s necessary and what’s not so you have a more objective view on how you can adjust your spending to keep it in line with your goals.