Freelance writing income forecastingFor much of my freelance writing career I figured there was no way to forecast my income. Money was either coming in or it wasn’t; it either arrived or it didn’t. Truth be told, I felt pretty helpless about money for a long time.

Then I learned how to get some control without going crazy or learning esoteric economics. It started when I first learned to track every penny that goes in and out. (A program like FreshBooks or YNAB can really help.)

The next step was to develop a spending plan which I use to decide exactly how I was going to spend my money each month.

One day I realized I could also use my spending plan to also project my income month-to-month.

I was reminded of this I saw this in comments:

“Awesome, just signed up for early notice of your Freelance Writing Business Solutions Course! What really gets me is the accounting- I need to figure out a simple way to project cash flow and all that.”

The short answer is I add some projections to my spending and earning plan. But that doesn’t tell you much.

Okay, but what’s a spending plan?

A spending plan is just that – a plan of what you intend to spend before you actually spend it. Some people would call it a budget but I’ve never like that term. My spending plans also includes my income or earning plans.

I use an Excel spreadsheet for this. A Google docs spreadsheet would also work. At the beginning of every month I list all my planned expenses.

You know, the items I pay regularly like rent or mortgage, groceries, utilities, insurance – all that. I also have categories for things like Gifts, Veterinary, and Travel – all of which happen at irregular times. The truth is I bang and copy from one month to the next because how I spend is quite predictable.

At the top of the spreadsheet I have also a section called Projected Income. Here I enter the amounts I expect to earn that month and from whom. Sometimes I’m operating with a contract that pays me monthly for as long as a year or even more. Sometimes I know or am pretty certain an assignment will come in. Here’s a decent example of how a spending plan can go together.

For example, I do a blog posts a month for a company and they pay me X dollars per post – that’s predictable income. I do a monthly column for another at X dollars – more predictable income. I’ve also got several clients who are after call me at almost any time and want some writing done. I don’t plug those in in ’till they actually call – that’s unpredictable income. So are the new clients I develop – unpredictable until a contract is signed and the money starts rolling in.

Looking at the totals projected on the spending plan for my income at any given month gives me a sense of where I am moneywise. Since I have my projected expenses on the same sheet, it’s easy to see if I’m ahead or behind.

It’s dirt simple. I also discovered just looking at the list of clients who are paying me and how much they are paying me gives me a sense of how much time I have available for more work if any. It’s not a direct correlation, but it helps me visualize my work.

By the week day or month

The advantage of the system is it’s so simple I keep it up to date most of the time.

I use it – I can look quickly at the spreadsheet for the month and know where I am moneywise. I can also multiply by three months or six months or even a year if I wanted project further than just what’s happening now.

Not only does the spending plan spreadsheet help me track my money, and help me visually see how much work I can take on, it also lets me know how much more marketing or less marketing I need to do because I see how much, or how little, is coming in.

Come to think about it the simple tracking on a spreadsheet is pretty ingenious. It also creates records of past performance. I wish I could say I invented the system but the credit goes to others.

Do you make projections about your income? If so how do you do it? Share with us in comments.

Sign up now for early notification about the upcoming Freelance Writing Business Solutions Course.

Write well and often,

Anne Wayman freelance writer

 

 

 

Image: https://www.flickr.com/photos/notionscapital/

{ 4 comments }

secret of freelance writingFor years I said there are three secrets to successful freelance writing.

I was wrong. There are four secrets to being a successful freelance writer.

The initial three secrets were and still are:

  • Write
  • Rewrite
  • Market

What I have left out all these years is the secret that I’m calling the business of freelance writing.

Oh, for sure, a good deal of business is handled in marketing. Or you could say marketing is a major part of business. But it’s not all there is to the writing business. [click to continue…]

{ 5 comments }

Inequality and Freelance Writing

October 15, 2014

This post is part of Blog Action Day 2014 – the discussion this year is about inequality. One of the things I like about freelance writing is there is no real discrimination – if I produce writing that people are willing to pay for the fact that I’m a white woman of a ‘certain age’ [...]

Read the full article →

5 Freelance Writing Fears & What to do About Them

October 9, 2014

I’m not sure that freelance writing fears are worse than say sales fears or CEO fears, or teacher fears. My hunch is we’re more aware of our fear than others, partly because we are freelancing. That means we’re responsible for our income in ways that are very different from having a regular paycheck. Plus, as freelance [...]

Read the full article →

How Freelance Writers Can Deal With “World Noise”

October 7, 2014

I’m a fan of Mark’s Daily Apple and this week he had a post called How to Deal with Health “Noise”. As I read it I realized that we freelance writers have to deal with what I’m calling “World Noise.” For example, today feels very noisy for me. I’m expecting an email from a new client. There [...]

Read the full article →

When a Freelance Writer’s Marketing Stops Working

October 2, 2014

A writer I’ve coached reached out to me not long ago, concerned that her plan for marketing her writing was not longer working. She has been sending emails to corporations in her speciality and following them up with a phone call. Over the last year or so, this plan has generated enough for her to [...]

Read the full article →

Wish You Were Here: The Subjunctive Mood for Freelance Writers

October 1, 2014

By Allison VanNest of Grammarly.com Here at Grammarly, there are few rules in the English language that give us a hard time. We get excited about split infinitives, comma splices, and dangling prepositions, but the subjunctive mood gives even dedicated word nerds like us some real difficulty. English is a moody language even if we don’t always [...]

Read the full article →

Jumping Into Jon Bard’s Kindle Kids Mastery Course

September 27, 2014

In the post, Secret Freelance Writing Dreams, I talked about a dream of mine to write about cats in some sort of kids book. I’d gotten intrigued with Jon Bard’s Kindle Kids Mastery Course. Since Amazon has made a huge commitment to ebooks for kids with their  Kindle Fire HD Kids Edition and the free(!) software to create heavily [...]

Read the full article →

Secret Freelance Writing Dreams

September 25, 2014

I’ll bet you, like me, have one or two secret freelance writing dreams. Maybe it’s to write and publish a novel – you may have worked on one or more through National Novel Writing Month (which starts Nov. 1, not so by the way). I’ve always had a secret writing dream to write a detective story [...]

Read the full article →

There’s No Such Thing As a Fair Price for Freelance Writers!

September 23, 2014

The other day someone asked me what a fair price would be for a particular freelance writing project. This is another of what I call a “how long is a piece of string” question. Just as there’s no way to answer “how high is up?” or “how long is a piece of string?” without more [...]

Read the full article →