Saturday, May 17, 2008

How I Plan to Earn $2000 More with my Writing this Year

I plan to save $1500. That's it.

No, the difference in numbers isn't a typo. Let me explain.

Money management gurus drive home the need to curtail spending. They often put it this way:

"A dollar saved equals two dollars earned."

Here's their angle: If you want to net $1 more through writing this year, you can do it in one of two ways:

#1: Earn an extra $2. If you're in a higher tax bracket, half of those earnings will disappear in the form of taxes, leaving you with your $1.

#2: Save $1. You keep it all. The IRS doesn't tax savings.

Now I'm not in a high tax bracket, so let's imagine that for me, $1500 saved equals $2000 earned.

The amazing thing is that the way I'm saving won't hurt me at all. It's not like I'm committing to eat Ramen Noodles for the rest of the year, or cutting my marketing budget. I simply compared prices on some of my services and winged better deals.

My primary savings came from changing my merchant account (the company that processes my credit cards for online purchases of my writing.) Cherie had been complaining for some time that too much of our earnings were being eaten up by our merchant account. I'd always respond, "Well, you know we compared before we got the service several years ago. I guess it just costs a lot."

But when they said they decided to charge us $40 more per month (ostensibly in order to serve us better!), I fired up my calculator and began asking around about the top merchant services. One ministry said they had changed merchants every two years, because companies would advertise a killer rate, inching up to an exorbitant rate before you knew what had hit you. He ended up with PayPal. I'm making the change, which should save me about $1200 per year. (Before the increase, they were charging us over six times the amount that PayPal charges for the same service!)

I've also found that you can bargain with Internet Service Providers. Mine was charging me about $70 per month for DSL wireless (allowing me about five computers to access). I got an advertisement in the mail that said I could get a competing service for about $45 per month. But I didn't want to go through the hassle of changing (change e-mail addresses, etc.). So I called my provider and said, "I like you guys, but your competitor is offering me the same service for $45 per month."

"We can beat that," he said. So immediately I began saving another $300 per year.

In my book on personal finance, I quote the CEO of Wherehouse Music as saying,

"Manage costs, not revenue. And remember that there is no such thing as a fixed cost."

Cutting costs frees up writers to take the assignments and write the books we're passionate about, rather than having to always go for the best paying. Extend this to paying less for houses, cars, etc., and you'll be that much closer to making a decent living from your writing.