Cultivating Financial Well-Being for Freelance Editors

Welcome back to the podcast! This is our second episode in our self-care/wellness series for freelance editors. The first topic was about physical and environmental wellness, and today’s topic is a little bit of a doozy. We’re gonna be talking about money and financial well-being, so this might bring up a lot of thoughts and emotions for you. So please remember to take care of yourself while you are listening. Take breaks if you need to. And just be sure to take care of yourself in the theme of our series. Okay, let’s get into it. 

Welcome to The Modern Editor Podcast, where we talk about all things editing and what it’s like to run an editorial business in today’s world. I’m your host, Tara Whitaker. Let’s get to it.

Hello everyone. Let’s talk about money, shall we? I don’t know if you’ve heard this before. I’ve heard it a lot, but you know how these things can go, but I often hear this saying that has some sort of iteration to it sometimes, but it’s basically something like, if you wanna confront your relationship with money, just start a business.

Or if you wanna learn about all the things that are really difficult for you, start a business, and I could not agree more. There are so many things that pop up when we start and run a business that we didn’t expect, or at least I didn’t expect. And oftentimes money and finances, it’s pretty close to the top of the list. And I’m making a big assumption here, but I would hazard a guess that at least some of you didn’t learn about money in the ways we should have and may or may not have complicated relationships with money.

I’m raising my hand right now, although you can’t see that. So we’re gonna talk about a few things. We’re gonna start out by talking about how our backgrounds and our families and some other things affect our relationship with money, how we can work on our money mindset, and then I’m gonna share some tips on how to run your freelance editing business as financially effective as possible.

Now, of course, I’m a broken record, but if this is your first time tuning in `to the podcast, I wanna make sure you know this. It’s impossible to address every single thing. There are gonna be things I mention that aren’t going to be applicable. So as always, with anything I say, please take what works, tweak it if you can, and leave the rest.

All right, so we’re gonna start off by talking about something that I would be very ignorant and not a good person to be talking about this if I didn’t say it, and that is talking about the real systemic and political issues at play when it comes to money and owning a business. Whether we like it or not, there are so many cultural and socioeconomic factors that come into play, and every person, every one of you listening, is going to have a different experience and relationship with money that we don’t have any control over.

We have control over a lot of things, but we also don’t have control over a lot of it. Money’s political. Business is political. For example, if you’re a woman and/or a person of color, we weren’t allowed to even own businesses not that long ago, women couldn’t take out loans or open credit cards without their husband’s approval and signature.

Like what? Sorry. But the fact that we own businesses is amazing and also political. And just a fun little fact that I like to share, we use our money that we make for good and we invest in our communities. So from Rachel Rodgers’s book We Should All Be Millionaires, working women invest 90% of their income back into their families and communities.

Guess what that percentage is for men? 35%. I’m going to assume that’s probably not a shock. It’s not a shock to me. I know that we don’t buy social media companies for funsies or send rockets to space to fuel our fragile egos and mortality. We support and take care of our people and we need more of that.

So we need more talk about money. We need to be more transparent with it, and that’s what we’re doing here. So let’s talk about money mindset. Mindset is one of those words, just like wellness and well-being that I’m like, blah. But we’re just gonna go with it. We’re gonna talk about the money mindset portion.

Mindset is essentially a collection of beliefs about something. Today it’s about money. And for the purpose of our talk today, there are two main types of mindsets. Fixed or scarcity mindset, and a growth or abundance mindset. Fixed or scarcity means there is one pot of money that exists in the world. It does not replenish. We have to grab it while we can at all costs. Doesn’t matter if it goes against our values or any of it. We just, we gotta get it ’cause there’s only so much.

Growth and abundance is the opposite of that. There’s enough to go around; money flows. It replenishes. If you’re still thinking about it in terms of like, one pot, it’s infinite.

Now, my background personally revolves around scarcity. You might be different, and that comes with its own things to work through as well. But my childhood had a lot of phrases that sounded like, do you think we’re made of money or do you think money grows on trees or must be nice with that sarcastic tone when someone else was able to buy something that we couldn’t. There was never enough money.

It never comes to us. You know, we just, we, we miss out. We don’t have any luck. We don’t get the money. And I’m not knocking my parents, but I’m sharing this because these are still things that I have to fight against to this day. And they happened decades ago, which terrifies me as a parent of young children.

So, there’s that, but for me, and I’m going to guess for many of you, if you had that scarcity mindset or still have it around money, it can show up in our businesses with super low rates that aren’t sustainable or good for the industry. We’ve all seen editors—and maybe we have been those editors—who charge just 0.00005 cents a word for things.

We know that those editors can’t do a good job or make that. It’s such little money, like it’s not sustainable. There’s no way. It can also show up when taking every client that comes our way, even if they’re a terrible fit. It can show up in giving like, concessions or doing things that we really wouldn’t normally do.

Please, for the love of everything holy, never get paid in royalties. Biggest scam ever. And you’re not gonna get paid. That’s the bottom line. And this is all super normal. It is nothing to be ashamed of. And because more than one thing can be true at the same time, it’s also important to talk about it so that we are aware of these things.

Because the only way to learn about this sort of thing is transparency, especially in the publishing industry and talking about it and learning about, you know, we don’t know what we don’t know. And I took a job back in the day where I got paid in royalties. I didn’t know any better. I was like, oh yeah, sure. All these books are gonna sell and I’m gonna make bank. Dear Listener, bank was $0. I got paid nothing.

So, you know, I did it. Not ashamed of it, I learned from it. But I would also like for you not to have to have that experience and work for free, because that’s not how we run a business.

So that leads me into the next part of the episode, and that is the tips, I guess we’re gonna call it, that I have learned over my going on fourteen years in business as an editor.

Now, I am not a financial expert. I will never claim to be. This is not financial advice, but I’m gonna share with you just my experience that I’ve had, and I’m gonna share some of my favorite experts. 

So the first thing I wanna talk about is when you realize that you have a relationship with money that you would like to change, the first thing to do is to educate yourself, right? I have been educating myself for many years now because there’s always something to learn, always something to improve upon when it comes to money, because it is something that affects every aspect of our lives every day.

So find somebody who knows what they’re talking about, who matches your background maybe, or your learning style or your values, whatever your criteria are. Here are some of my favorites, and they’re gonna be in the show notes too, so don’t feel like you have to rush to write ’em down or anything. Ellyce Fulmore and her book, Keeping Finance Personal. Dasha Kennedy, who is The Broke Black Girl, and her book Moving Beyond Broke. Tiffany Aliche, who is The Budgetnista, and her book Get Good With Money. Ramit Sethi and his book I Will Teach You to Be Rich, and Rachel Rodgers and her book We Should All Be Millionaires. Those are just a few that I recommend. There are many more, but that’s a good start. A lot of different backgrounds, experiences, approaches, you should be able to find at least one person hopefully that resonates with you there.

Educate yourself. Learn from social media, books, workshops, all of those things by these people. Soak it all up. Also, learn from other editors. I mean, who better to learn from than the people who are doing the same thing you’re doing, right? Attend those workshops and conferences, join communities. I know, shocker, Tara said to join a community. I know, but I’m always gonna say that because I know the importance of it. 

The EFA, the Editorial Freelancers Association, does a rates survey every couple of years. I think they just asked for people to fill it out again to update, and that can be helpful. And then I also hosted our own rate survey inside the Freelance Editors Club a couple years ago now, and we’re very open about rates and pricing and what people are actually getting paid. Like your rates might be a certain amount, but are you getting clients at that amount? And that’s one of the questions that was part of the FEC survey and it was people who are actually making that amount of money.

I also have a money mindset workshop in the club that goes through the process of managing your emotions around money. That is too deep in the weeds for this episode, but if you’re interested, you can always join the community.

Okay, moving on with tips. These next three or four kind of go together, but I separated them out. But the first one is to always, always have a separate business bank account. Please do not mix your personal and business finances. Even if you’re a sole proprietor, it’s a pain in the butt come tax time; you are going to not be happy. Ask me how I know. Have a separate bank account.

If it’s something you want to do, you could also have a business credit card. Now, of course, if that’s something that you don’t want to do, you don’t have to. I just now got a business credit card and like I said, I’ve been at this almost fourteen years, only because I wanted to get the points and I know that I can use it responsibly. Were there times in my business that that wasn’t the case? Yep. It’s okay. So if that’s you too, don’t get one. Just use a business bank account. 

There are so many online banks now that you can use. There’s local credit unions if those are available in your area. You don’t have to go with the big, huge bank conglomerates. There are tons of options out there that don’t charge you $80 million for having a business bank account.

And going along with that is to know your numbers. This can be very easy to ignore, especially when your finances aren’t where you would prefer them to be. We like to think ignorance is bliss in this scenario, and it’s not. Knowledge is power. It’s tough. It’s not fun when you’re looking at your finances and it’s not what you would like it to be, but it is so important to know what those numbers are, both in your personal and your business.

Remember that this kind of gets a little bit in the weeds, but I always like to mention this because I think the natural reaction for our finances if we’re in a tough spot is to cut things, which you know of course if you’re not using it, if it doesn’t apply anymore, yeah, you don’t wanna be paying for stuff you don’t use, but you can only cut so much.

If you’re cutting things that are affecting your emotional and mental well-being, or your physical well-being, or you know, things that are just not worth it to cut, then we don’t wanna be cutting. Now, not to say this is the easier thing to do, but remember, money is infinite. We can make more of it. I’m not saying that is like, oh, just snap your fingers and make more money.

We can make more money and recognize that there are real barriers we’re up against with that. But when it comes to cutting to the point of, you know, not being happy and not being healthy in many, many ways and making more money, the better option is to try to make more money. There’s my little soapbox for today.

All right. Going along with numbers is a budget. This does not need to be fancy. I used Excel for many years. I now use YNAB, I can’t imagine using anything else, but you use what system works for you and what method and what tool. It can be as complicated and in the weeds as you want or as you know, big picture, whatever works for you.

But have a budget because one thing that newer editors can get, I don’t wanna say in trouble with, but again, ask me how I know, is that we think we don’t know anything, so we have to sign up for everything—every workshop, every conference, every summit, every program, coaching program. You know, we buy all these things with education and all of that when we’re really procrasti-learning.

And those can sneak up on you. Again, been there. I’ve done it. I’ve done it not that long ago. So, you know, it’s not just when you’re a new editor; it can happen at any time. But knowing what you’re spending your money on and what money you have to spend on is very helpful, which also goes into my next point of bookkeeping.

Again, Excel, Google Sheets, QuickBooks, go as fancy or unfancy as you want. What I will say with this is it does make it easier come tax time. Especially those of us in the US ’cause that’s all I can, you know, personally speak to. But a P&L statement is your friend.

P&L is a profit and loss statement. It sounds fancy, it’s not. All it is, is a list of your income compared to your expenses. So you can see if your business as a whole is making or losing money. You can do that in Excel, you know, it doesn’t have to be fancy. I see a lot of editors or heard a lot of editors kind of scoff at this because they’re like, well, I’m just a sole proprietor, or it’s just a side hustle, and I’m gonna push back against that.

Because if you don’t take your business seriously, no matter how big, small, extravagant, basic it is, nobody else is going to, and that includes your clients. And I guarantee you that’s not how you wanna run your business.

So I don’t care if you’re just starting out. I don’t care if you have like, five expenses. I’m sure you have probably a little more than that. I can think of a few right off the top of my head that every editor needs. Fine, mark it down. Then you have that history too, so you can go back as you grow and as you continue with your business and you’ll be able to see how you’ve grown. It’s a great thing to have.

Okay. Another US thing, blah. Make sure you set aside money to pay your quarterly estimated taxes. The IRS website has info on this, which you can use. It’s free. How I roll is I gladly pay money for a tax professional, and I always have. I’m just, I’ve come to terms with the fact that I’m not a math/accounting type person. I don’t get it. I never will. That’s fine. I will pay someone who is an expert in it to do it. You can do the same. I know that it can be pricey depending on where you live and all of that. But try it yourself if that’s something you’re comfortable with. Or there’s always the option of hiring an expert, which is what authors do when they hire editors, right?

So we’re just doing the same thing for our businesses. Going back to talking about rates. It can be easy to set a rate. Well, let me rephrase that. It’s not easy to set rates, but if you set a rate and then you just leave it ’cause you’re like, well, I don’t wanna go through that experience again of figuring this out. Yeah, I get it.

But also we have to evaluate them as you’re gaining experience and education, you can raise your rates every six to twelve months is great. Now, I don’t say change your rates that often. I’m saying evaluate them. See if you can raise them, if you feel comfortable raising them, or if you feel uncomfortable raising them, should you still raise them?

Because you still need to take into account what you need to pay your bills. And maybe that’s changed in the last six to twelve months. You need to make a living wage, and we have to adjust and accommodate #TheWorld when it comes to that. And if we’re just setting a rate and never looking at it again, we’re gonna lose out on income that we deserve and quite frankly need. So reevaluate on a regular basis.

Talking about making more money, one idea is to add a new service or income stream. This might not be feasible or an option at this point in your editing business, just something to keep in mind. I am personally of the opinion that I don’t like having all of my eggs in one basket.

We had a training on this in FEC too. Some entrepreneurs don’t feel that way. They say one thing, one thing only, which I totally get, will work for some people. My brain gets too bored with that. I need options. I need diversity, so I need multiple things. But if you wanna just do editing, then just do editing.

And there’s nothing wrong with the “just” either. Do what works for you and your brain. I also wanna mention mutual aid because there is absolutely no shame in asking for help when you need it, and then returning the favor if and when you’re able. I’ve really gotten into the mutual aid aspect of my local community in the last year, and it’s just been incredible.

There are food pantries and community fridges and free stores and exchanging services, and there’s so many ways to help each other out, and it doesn’t have to be local. It can be online. There’s no shame in it too. I just, again, taking away the stigma and being more transparent People, we all need help. We all need help.

Doesn’t mean that we’re not working hard enough. It doesn’t mean that we’re lazy. It doesn’t mean that we’re not good at what we do. We just need help ’cause we’re human and life is hard. So please look into mutual aid in your area or in your online spaces that you hang out in.

All right. One more thing to think about is buying back your time. Now remember, money is renewable. Our time is not. Whenever I think of that too, I have a slight panic attack because it’s not, I mean, we don’t get our time back. However we spend our time is gone. I think about this a lot when I’m scrolling.

Just FYI, when you’re first starting out, this might not be feasible, right? You’re not, I mean, I hope you are making a ton of money, but most likely you’re not. But there’s gonna come a point in your business where even five hours of work a month given to a virtual assistant can make a huge difference. Maybe it’s something in your home or childcare. What I mean, so many options.

I’m not saying go hire a nanny and a house manager and a personal assistant. If you can, great. But five hours, a hundred bucks a month, can make a world of difference. So just keep that in mind because it has to do with money and our time.

Now I’m gonna leave you with three of my favorite anchor thoughts or affirmations or mantras about money. If these don’t resonate, tweak them. Make your own, make them believable for you, though. Don’t be like, I am the richest person in the world. Guessing you’re not. No offense. Do something that your brain’s gonna believe and that’s going to make you feel good. Okay? For me, these are my three favorite.

Number one: I release all resistance to attracting money. Number two: The more I give, the more I receive. And I mean that in many, many ways. Not just money, but lots of ways. And number three: I believe in community over competition and know there is enough for everyone. And yes, there is enough for everyone, even if that isn’t actually at play. For example, there is enough food in the world and yet we have major issues with that. So there’s a little caveat to that, but knowing there’s enough and also helping everyone have enough is something that resonates with me deeply.

So there we have it. The always fun discussion about money and finances. Like I mentioned before the episode started, please feel free to take some time to let this all marinate because I’ve said some things that could have brought up some thoughts and emotions for you that you weren’t expecting, or maybe they hit you in a different way. Money’s a loaded topic, you know? It still is. And for the twentieth time in this episode, it’s important to talk about it and release that stigma and “unprofessional” tag it gets, especially when women talk about money.

Because how unladylike, right? I’m gagging here on my microphone that you can’t see, but we’re gonna keep continuing this conversation. We’re gonna keep talking about taking care of ourselves in many different ways, so be sure to keep an eye on new episodes that will be coming out soon. 

So until next time, keep learning, keep growing, and remember that money is renewable, infinite, and we deserve it.

Thank you so much for tuning in to today’s episode. If you enjoy The Modern Editor Podcast, I would be so grateful if you left a review over on Apple Podcasts or wherever you consume podcasts. And don’t forget, you can head to TaraWhitaker.com to connect with me and stay in touch. We’ll chat again soon.