Home > Tools for Freelancers > Publications > On Your Own: A Guide to Freelance Journalism > Making a living

Making a living
Time and money

On Your Own: A Guide to Freelance Journalism

> Home

> Introduction: The freelance side of life


Freelance journalism 101

> Vocabulary lesson

> Dollars and sense

> Contracts are essential

> Copyright 101

> Dressing for success as a freelancer

> Staying productive even when you’re not working


Business matters

> Five reasons to pay attention to business

> Contracts and copyright — beyond the basics

> Getting your business organized

> Separating yourself from your business

> Keeping track of business

> Taxing matters

> Insurance considerations for freelance journalists


Making a living

> Time and money

> Budgeting without a salary

> A simple way to boost your pay: Ask

> Retirement planning: Where to stash your cash?


Finding work

> Finding your way to work

> Trolling the web for work

> Inspiration for finding the story

> Brainstorming ideas you can sell

> Pitching your way to a full story calendar

> Tips on freelancing for newspapers


Marketing yourself

> Paying attention to business

> Making a home for your business on the web

> Networking: the key to staying happy and fed

> Business cards help make the best first impression


Tools of the trade

> Why journalism ethics matter

> Four tips for better self-editing

> Selected websites for finding freelance journalism assignments

> Journalism organizations

> Journalism reading list

The adage “time is money” holds as much truth for freelance journalists as for any business manager. Nonetheless, it’s a hard concept to grasp, in the freelance context, without first breaking it down into its two components — time and money.

Even freelance journalists who are paid by the word, page or piece need to know how much they make for an hour of effort. Otherwise, how can they take control of their businesses, set realistic goals or figure out how to make more money in the future? And have no doubt: A freelancer is in business, and has to think in a businesslike way.

Thinking this equation through is not easy because there are so many factors to consider and so many of them are variable and individual. What’s a reasonable freelance workload that allows you to earn as much as you need and still have time for the other things in your life? What’s a “good” salary for a freelancer? Just how much is your time worth?

On the assignment level, the basic formula is to divide your payment by the number of hours you work on it to come up with the hourly rate you were paid for your work. To find out how much you made in a week, month or year, the formula is to divide the amount you billed by the number of hours you work in that period. But neither of these simple equations will give you an honest answer. If you only count the hours you produce income and the cash you receive for those hours, you’ll short-change yourself, burn out and not have as much money as you need.

Time — out of hand

The concept of “billable hours” is most familiar to lawyers, accountants and consultants whose companies require them to spend more hours at work than they bill. Standards are set for the number of hours an associate or partner must bill per week or month, but often the number of hours that employee has to work are not limited.

For freelance journalists, it’s helpful to start by figuring out how many hours you want to work in a year. If freelancing is your full-time job on a 40-hour-a-week schedule, for example, you would set your annual hours at 2,080 and begin subtracting all the hours you’ll take off during the year.

Many freelancers stop there, coming up with 1,820 billable hours a year. They set their rates accordingly and don’t understand why they have to work at least 50 or 60 hours a week to make budget.

That’s because they don’t account for administrative time — the unbillable hours it takes to run a business: time for bookkeeping and invoicing, marketing and promotion, and pitching and writing query letters. Admin time also includes running your office — ordering and buying supplies, keeping your computer and other equipment functioning, taking care of insurance and other needs that employees look to their employers to provide.

It’s hard to figure administrative time because it’s so variable. One rule of thumb among freelance writers and editors is to leave one day a week (or its equivalent) for administrative time. Freelancers with full client lists may not spend as much time on marketing and promotion, though they still may need to spend time pitching stories to established clients. Some freelance journalists with full work schedules hire someone else to take care of bookkeeping, but they still need to spend some time working with the bookkeeper or accountant. The variability of these factors is what makes it useful to have a rule of thumb.

During some periods you may be too busy on deadline to spend a day a week running your business. Other freelancers don’t have enough work and need to allocate more time for marketing and pitching. Don’t let the variables, or the particulars of your own business, keep you from planning for administrative time, though. If you do, you’ll most likely run short on one side of the time = money equation.

Money — out of pocket

There are two ways to think about how well your business is performing, and both are useful measures.

To find out how much you actually made per hour last year, divide your earnings by the number of hours you worked. The result may demoralize you if you find that you only earned about $10 for each hour you put in. Or it may encourage you to do better — find higher-paying gigs, stop spending time on less-fruitful pursuits, ask for a raise from clients that rely on your services or increase the rates you quote and list on your rate sheet. In any case, it’s information you should have.

Approaching this assessment from another perspective, you can figure out how much you need to earn per billable hour to replace the salary you would have if you were employed. This is a much more complicated equation.

Start with the salary you would earn and add the obligations of a typical employer, which you take on as a business owner.

For the final calculation (money time), let’s round to make the math easier: to replace a $50,000 salary under these hypothetical circumstances, you need to bill about 1,600 hours at an average of $40 per hour for your time.

Don’t forget to account for other expenses you pay as an employee: your share of employment taxes, insurance and retirement contributions, for example. (See the chapter on Budgeting without a salary for more information.)

Contributor: Hazel Becker

Resources:
Dollars and sense for a discussion of typical freelance journalism pay scenarios
– The Editorial Freelancers Association (EFA) Chart of Common Rates (updated in 2014)
Writer’s Market guide to rates
– Association of Independents in Radio’s basic rate guide for independent audio producers

Last updated: January 26, 2015


Copyright © 2012-2018 by Society of Professional Journalists. All Rights Reserved.


Questions or comments? Please post them in the Freelance Guide Comments forum of the Freelance Community Board or email fcguide@spj.org. We'll answer as soon as we can!


 

Join SPJ
Join SPJWhy join?
Donate