This week, I sat down to calculate my writing expenses for 2013. This is the first year I’ve had a separate bank account for my business, and it made it so much easier to keep track of my expenses. I used my debit card for everything except for tips and vending machines while traveling, and I set up a Mint.com account and created a “budget” for each of my spending categories.
I’m use the word “budget” loosely. I didn’t really have one last year because I didn’t have a good idea of what I spent in 2012. (I could have looked at my taxes, but I was lazy.) The reason I set up the budget was so that I could easily categorize my expenses. I went through each transaction in Mint and added it to 1 of 12 categories.
Here is an overview of my spending. My explanation for the categories follows below (click to embiggin)
Writing Expense Categories
1. Conferences: A big expense. I went to the RTBooklovers Convention in Kansas City, MO last year, and this category includes hotel, airfare, travel to and from the airport, food, conference registration, etc.
2. Office supplies: Exactly what it sounds like. I spend a lot on ink and paper.
3. Promotion: I include bookmarks, romance trading cards, giveaway prizes, online fees like Rafflecopter’s upgrade, and a few other things in this category. I think I really overspent in this category this year. Part of the reason for that is because I tried out a few new-to-me things. I think I’ve finally decided what I’m going to do for future promo, and this category will be a lot less this year. I’d like to cut it in half.
4. Salary: I pay myself! I’m lucky enough that my family doesn’t have to survive off my writing, so I keep my paycheck small. I’m not providing numbers on everything here, but I will say that I pay myself $500 a month. I chose that number because I felt like I could write for another year or two without running out of money, and without having another advance from New York.*
5. Shipping: This was surprisingly small. I think the reason I’m surprised is because most of my shipping expenses have occurred in January of this year, and it feels like I’m paying out the wazzoo for shipping. I am actually paying out the wazzoo. I decided to open up all my blog tour giveaways internationally – I always feel bad when people overseas miss out on my giveaways – and the expense is crazy. I’ve also learned one very important thing.
I’ve probably spent more in January on postage than I did all of last year. I haven’t decided if I’ll continue keeping giveaways open internationally. I probably will, but not on a blog tour; I’d rather that expense be spread out over time.
6. Web Maintenance: A relatively large expense. This includes site registration and a few other fees, but a good chunk of it is for my web designer, Croco Designs, and she’s worth every penny in my opinion.
7. Education: I almost choked when I saw this expense. It’s as big as my conference expenses. But this year, I went to a Margie Lawson Immersion Course in Colorado. Airfare, hotel, registration, food, and other expenses are included in this category. I don’t intend to travel this year for education, so this will be much, much smaller in 2014.
8. Advertising: I’ve had Croco Designs design me a few graphics this year. That expense is included in this category as well as a few advertisements on Facebook. Most of it is from promoting posts on Facebook, though. You all know Facebook has changed it’s way of doing business, right? A very small percentage of fans see page posts anymore. It’s annoying and aggravating and definitely a subject for another post.
9. Business Books: A tiny category. I bought The Naked Truth About Self Publishing, the Emotion Thesaurus, Deb Dixon’s Goal, Motivation, and Conflict this year. And another book I can’t remember at the moment. This category will probably be bigger in 2014. I have a number of books on my list I’d like to purchase and read.
10. Assistant: I hired Carmel of RabidPr.com to help me out with my book release this year. She was worth it. She took so much stress and pressure off of me! I’ll definitely be hiring someone again in the future.
11. Professional Dues: This is RWA organization and chapter dues.
12. Agent: I almost forgot about this one because the expense doesn’t come out of my bank account. This category is big, but my agent more than made up for this expense when she doubled the first offered advance on The Shadow Reader. Plus, I adore her and value her advice and insight into publishing.
Your categories may vary depending on your preferences and spending pattern. I could have combined Business Books and Education, but I chose to keep them separate. It’s up to you how you want to track your expenses.
Also, expenses will vary from author to author. As I mentioned above, I don’t need my writing income to survive, so I wasn’t as thrifty last year as I should have been. Plus, I still consider myself a new author. I’m experimenting with things and deciding what I like and will continue doing, and what I don’t like and won’t invest in anymore.
And I don’t make a ton of money off my writing. I’m grateful for what I have made, but my advances don’t cover the cost of daycare for my twins. If I was a New York Times bestseller with dozens of books to my name, I’d likely be spending much more than this.
It’s important for authors to know where their money is going. Once you sit down and see how much you are spending in each category, you can decide whether that expense is worth it or not. I’m looking closely at my Conferences, Promotion, and Advertising categories because those are the three categories where I’ve felt like I could have either spent less, or spent with more intention (especially with Facebook advertising).
Unfortunately, my Conference expenses will be high this year. I’m traveling for three conferences: Coastal Magic Con this week in Daytona, the RTBooklovers Convention in New Orleans in May, and the RWA National Conference in San Antonio in July. This will be my first year to attend RWA, and I’ll evaluate afterward if it’s worth the expense. If next year’s RT wasn’t in Dallas, I’m pretty certain I’d make this year my last. (If you’re interested in why this RT would be my last, let me know in the comments and I’ll write a post about it.) Coastal Magic Con is a smaller, reader-centric con. I haven’t been to one of these before, so I’m excited about it! If all goes well, I’ll try to fit one small, reader-centric con into my future budgets.
Do you have a separate bank account for your business expenses? How do you keep track of your expenses? What categories for spending do you have or what categories do you think I might be missing?
* My business bank account was funded by my advance on The Sharpest Blade. I also had a few foreign sales that helped me earn out my advance on The Shadow Reader, so my very first royalty check went into this account as well. Yay for royalty checks!!!