Ten Money Questions for Michelle Goodman

In this week’s Ten Money Questions we speak with Michelle Goodman. This is Part II to The Anti 9-to-5 Guide book review that I posted the other day. Goodman, the author, writes at a blog by the same name. Since work and money go hand in hand, I wanted her thoughts on making the break from corporate life, building a business from freelancing and managing finances when you’re no longer getting a steady paycheck from the man! Enjoy!

1. You write that younger women are all about quality of life. With balance in mind, how is work being redefined?
More and more companies are getting hip to the fact that younger workers want flex hours, telecommuting, freelancing, and other work/life balance options and are making the necessary changes. You see it in the media every day. I get these press releases in my inbox every week touting yet another law firm or Fortune 500 that’s been deemed family-friendly by some women’s media outlet or other. Today being balance-happy is a badge of honor for big business. Since retirement funds and job security aren’t what they used to be, flex work has become the hot new currency for workers. Maybe you don’t get the raise you want, so you ask to work at home on Fridays, that sort of thing.

Besides, as more and more Boomers reach retirement age, companies are going to have no choice but to embrace these brave new ways of working. This is of course great news for younger workers who operate with a far more entrepreneurial, balance-oriented mindset than their parents ever did, and for stay-at-home moms looking to re-enter the workforce.

2. How did you learn to work effectively from home? What were some of the challenges?
By trial and error. I quickly learned that I cannot work in a dwelling that has 500 cable channels – it’s too tempting to watch VH1’s “Behind the Music” all day long. So I canceled my cable subscription. I also learned that the freelance power lunch is not for me; by the time my third margarita comes, I’ve shed all pretense of getting any work done that day. Instead, I try to get my work done during normal-ish business hours and socialize at night.

What it comes down to is figuring out when your peak creative hours are and mapping your work schedule to them (taking into account the fact that your clients will probably want to reach you at some point during “regular” business hours). Another factor for me is that I like to be off work when my friends and family are off work. If you work nights and sleep days, you only get to socialize with the other vampires. And if you’re friends and family are mostly 9-to-5 types, you’re out of a social life.

As for the distractions of home, you quickly learn to eliminate as many as possible and say no to all others, lest you wind up back in the 9-to-5 grind. Caller ID is pretty much my BFF – that is, next to my dog, who is particularly effective at running off Jehovah’s Witnesses and other midday solicitors who show up on my doorstep.

3. What is your most significant memory about money?
This is a bad one: In my late twenties, my credit card debt had come to eclipse my annual income, and I couldn’t afford the monthly minimum payments anymore. My interest rates went sky-high and the collectors started calling and calling. It was awful. I had this moment of truth where I realized I’d been in denial for the past couple years and was now going to have to pay the piper, so to speak. It wasn’t that I’d been hoarding shoes or jetsetting to Paris or anything; I was just living in a one-bedroom apartment in San Francisco, working for myself, and too stubborn to downgrade to a studio or get a roommate (or perhaps, a day job, since my freelance salary wasn’t cutting it). Instead, I’d foolishly used my credit cards to make up the difference. I think I had about eight cards at the time.

The worst part was the shame, like I couldn’t take care of myself or something. My accountant advised me to declare bankruptcy and said I’d still be able to buy a home in a few years (in fact, he said, several of his other clients had!), but I was having none of that. I felt like, I made this mess, and I’m going to fix it myself. So I consolidated my debt through one of those nonprofit credit-card counseling services, moved to more affordable Seattle, went to work for the man for a year (at a large software company up here that you may have heard of), and paid off my debt in twelve months. It sucked big time, but in retrospect, I’m glad it happened. I felt proud about cleaning up my own mess -- I don’t think I would have felt good about myself taking the easy way out. I have yet to live outside my means since, and it is such a huge load off.

4. What is your worst habit around finances?
My dirty little freelance secret is that I’m not as organized as I could be about paying my taxes. Freelancers don’t get taxes taken out of their paychecks; they pay Uncle Sam themselves, in estimated quarterly payments. In a perfect world, I’d be taking money out of each freelance check I received and stashing it in a separate account with check-writing privileges. Psychologically, I think it would be easier than forking over a lump sum from my regular checking/savings account four times a year. But I have yet to do this.

5. Is there truth to the saying do what you love and the money will follow?
Sort of. You have to do it well, charge enough, know the market, know your competition, believe in yourself, have guts, not take shit, set goals, and be persistent as hell – all while being nice, but firm. And have a fallback skill, income, or financial stash you can rely on those first few months (or first couple of years) when the money doesn’t necessarily follow. If you start a business with a sizable overhead, it can take two or three years before you’re drawing a decent salary, if even that. Happily, freelance writing has almost zero overhead.

6. How can a freelancer promote herself on the cheap?
So many ways: If you’re trying to get experience in an industry you’re new to, volunteer your services to a high-profile fundraising or community event. Make sure you’re doing more than grunt work and you get credit for your efforts; the key is to develop killer portfolio samples and endear yourself people who are well connected in the industry.

Business cards and websites are of course a must. Blog tools like WordPress make creating a simple site a snap, even better if you have dynamic content like a blog (helps with the Google rankings), though I imagine I’m preaching to the choir here. But don’t be afraid to work the web in other ways: join social networks like LinkedIn and Biznik, trade site/blog links with other freelancers you know, use message boards, participate in listservs, write articles or guest blog posts, write Amazon and Yelp reviews, showcase your creations on Flickr, and so on. You may also want to send a quarterly or monthly e-newsletter to your clients and contacts, not spammy, but a short email containing a couple articles of interest. The idea is to keep in touch and let them know you’re still out there. Even an e-card or a simple message that says, Hi, How’ve you been? We haven’t worked together since spring and I wanted to let you know I’m available for projects this fall, does the trick. In fact, personal is always better.

And since nothing beats some good old-fashioned face time, get out there and meet some like-minded freelancers. Find some low-key schmoozy group and make some new friends. After all, you’re going to need a virtual water cooler if you want to stay sane as a solo worker. If you’re a writer, don’t just hobnob with other writers; get to know the designers, photogs, programmers, and project managers in your community, too, and you’ll increase your chances of getting referrals for work.

7. Women are notorious for not charging what they are worth. How can women overcome this tendency?
Potential clients will always ask your rate on the spot, before you’ve even heard all the project details. Don’t give it, and don’t list your rates on your website. Instead, get all the details and ask if you can get back to the client later that day or the next morning. (I’ve never had anyone say no.) When you go off to figure out the project rate, remember to pad it by 10 percent or so, because most projects take longer than expected. Also, take into account any revisions that may be required (get specifics on this from the client), and make sure you stipulate exactly what you will and won’t do for the agreed-upon price in a solid contract.

When negotiating with clients, it’s important to separate the personal from the professional. Sometimes it’s easy to forgot that you are not your freelance rate, that’s just what you earn. Know that if a client isn’t willing to pay what you’re worth, they’re not rejecting you personally. And when it comes to talking money, you shouldn’t worry about whether the person at the other end of the table likes you. Asking for what you’re worth isn’t being a ballbuster or an arrogant bitch; women are sometimes slow to realize this. Besides, men do it all the time, so why shouldn’t we? Also, your clients don’t want to hear about how you need a new muffler on your car; that just makes you sound desperate and small time. Instead, keep the venting about personal finances to your conversations with friends.

If you’re uncomfortable negotiating, you may want to practice on a friend first. It does get easier with practice. And if you want more negotiating tips, check out this post on my blog.

8. What suggestions do you have for managing finances when you no longer have an employer automatically deducting taxes and retirement contributions?
See what I say about paying your quarterly taxes above. And have your monthly retirement payments automatically deducted from your bank account; it’s easier to save this way and you will scarcely notice it. (I do follow this rule.) Pay off your big bills when you get a big check. On the flip side, if you’ve just signed on to do a four-month project that you’re wildly passionate about (say, writing a book) but the pay is lower than you’re used to, don’t rush out and buy a new sofa or any other big purchases. A celebratory dinner will suffice.

The biggest thing that gives me peace of mind as a freelancer is knowing that I have a few months’ savings at the ready should I need it – and a bunch of fallback skills that can land me some beefy corporate work that may not be my first choice, or even a day job, should I need it. After that credit-card debacle I had in the nineties, I never want to live month to month again.

9. How does money play a role in your relationships, romantic or otherwise?
Other than ditching any date or “friend” who can’t pay their own way, I’m not sure how much it has.

There is this though: I don’t expect my boyfriend to pick up every restaurant tab just because he has a penis, and frankly I don’t get women who still play this game when it comes to dating. (Hello, it’s not 1955!)

I’m also completely turned off by people who use the fact that they’re getting hitched or having a baby as an excuse to milk their friends for linens or onesies they could easily afford themselves. I’m not saying don’t register or don’t accept gifts (though I have the utmost respect for people who request that you instead make a donation to some noble cause or other). But don’t have a shower at which you rub your hands together like The Simpson’s Smithers the entire time and repeatedly ask if it’s time to open the presents yet. Your friends who have already shelled out hundreds on hideous bridesmaid dresses and an insufferable bachelorette weekend will not find this behavior endearing.

10. I read that you’ve given the baby thing a lot of thought lately. How would motherhood restrict your finances? Your career?
Honestly, I’ve never felt the ticking clock, baby lust, mommy gene, whatever you want to call it, and I still don’t. But biologically speaking, the window of opportunity is closing fast for me. (I just turned 40.) For that reason, I thought I’d better look long and hard at whether I’m really willing to close the door on conceiving. (I’m pretty sure I am.) And I felt like my beau and I had to get super-clear on where we both stood on this; guys don’t always realize that their sperm don’t have all the time in the world either. The upshot is, if I change my mind in five years, which seems unlikely at this point, I’m cool with adopting. I love my dog like my own, so why not a kid I didn’t hatch?

From a financial standpoint, I’d have to work the numbers if I ever got serious about being a mom to anything other than a four-legged child. When I was talking pros-cons with my boyfriend, I kept saying, “Yeah, but, how would I have the time to work, write, and be a mom?” I kind of neglected to look at the partnership part of the equation – like maybe one of us could work less and parent more, or maybe, with the power of freelancing, we both could. Maybe we could, like, live together, and get on the same health plan (duh). Maybe I could be the breadwinner and he could be my domestic diva. Stuff like that.

From a time management/balance standpoint, freelancing and telecommuting would be a boon, I’m sure. But I still worry about having to give up some writing time, and the quiet solitude I’ve come to rely on when working on a big writing project. I’m not sure I’ll ever be willing to let that go.

More about Michelle Goodman
Michelle Goodman is author of The Anti 9-to-5 Guide: Practical Career Advice for Women Who Think Outside the Cube. Her articles and essays about alternative careers, human mating rituals, and popular culture have appeared in Salon.com, Bust, Bitch, Bark, Seattle Times, and several anthologies. She regularly blogs about career change and self-employment at www.anti9to5guide.com.

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Read other interviews in Nina’s Ten Money Questions series at Queercents including this week’s with Chip Conley, the author of PEAK and CEO of Joie de Vivre Hospitality, California’s largest boutique hotel company.

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