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Monday, January 19, 2015

How to manage your finances as a professional blogger

By Megan Ritter

Budgeting and managing personal finances can often be a pain, but for the freelancer and self-employed, those aches are sometimes more than your typical aspirin can handle. From an outside perspective, professional bloggers and other home-based authors might seem to have it made in the shade, but there is a lot more to working for yourself that meets the eye, especially from a financial viewpoint.

Sure we might spend less on gasoline, perhaps not as much on proper work attire and other daily work-related expenses, but time spent on money matters and and other issues sometimes can make up for that ten-fold. The pros and cons for this list are seemingly endless, so let’s concentrate on a few tips on how professional bloggers can best manage their expenses.

blogger finances
Proper invoicing methods help ensure timely payments

Incoming and invoicing

Probably the most important aspect of finances for the freelancer is managing invoices to ensure the author is being paid in a timely manner. If not already using an application such as Excel, there are other low cost accounting services available for invoicing on the internet.

For tackling this task one might first think of Quicken or Quick Books, but check out some other lesser known vendors like freshbooks.com or wave’s cloud based service. Find the program, software or website that works best for your managing your invoicing and accounts receivable.

Outgoing and overhead

On the flipside, as anyone who has followed a personal budget knows, you have to pay the bills. But more importantly, you also need to track your expenses. Most accountants will recommend having a separate banking account for your professional income and expenses. This will make it much easier when it comes time to filing taxes.
Money management for bloggers
Effective tax planning helps lower self-employment taxes

Uncle Sam the tax man

When April 15th rolls around, it is vital that our financial ducks are already in a row so that we are not hit with unexpected charges from our state or federal authorities. If you will be filing these taxes yourself, this could be a complicated endeavor.

You may wish to consult with a professional so that they can guide you through this complicated minefield of tariffs and other unforeseen expenses.  There is much to consider above and beyond 1099 income and self-employment taxes:

     Important deductions and write offs
     Health and life insurance costs
     How to pay yourself properly
     Retirement planning

Even if you don’t hire an actual accountant on your payroll, it might be best to have an initial discussion with one of them to plan your finances accordingly.

Enjoy yourself!

Even though it may seem that the freelancer is just that, free, but often we are bound by deadlines and overloaded with work, so it is important to take some much needed time off and engage in things not associated with a keyboard. Sometimes a hobby or weekend away can lift our spirits and drain some of that stress from our daily grind.

While we may dream of writing a best-seller one day, many of us are content to earn a decent living from the comfort of our home. Staying on top of our finances can mean the difference between enjoying daily writing endeavors and dreading our financial future.

About the author: Megan Ritter is a graduate student at USC and has worked for various marketing institutions. Follow her @megmarieritter.

Image licenses: 1. ShutterStock.com; 2. ShutterStock.com