Deep Dive: Author Finances

Writing is an art, and artists are usually loath to speak about things like money. After all, we write because we’re writers, so why should we care about something like finances?

Here’s the thing: while it might not seem like it, writing can be a wildly expensive hobby or career. Not only that, but there are a lot of misconceptions around authorship and money, be it how much we make or how much it costs.

Then layer on that more authors than ever are pursuing self-publishing, and now some of us need to think about finances because it’s (part of) our livelihood. 

This includes costs you might not know about (yet) or some you haven’t even thought of. And it definitely includes all those dirty little words like “expenses” and “revenue.” We’re going to cover it all.

Specifically, that means we’re going to be looking at:

• The costs of being an author, from setup to ongoing
• Understanding royalties and income
• The milestones of an author journey or career
• Creating and managing an author budget
• Financial tips for indie and traditionally published authors

I know budgeting and expenses aren’t fun topics, but this is the article every successful author—self-published or traditionally published—wishes they read before they were drowning in finances.

Let’s wrap our heads around the money side of being an author.

P.S. To make your future self happy, click here to download an author finances spreadsheet that you can use to track your expenses and your income! Just make sure to click File, then Make a Copy to get your own editable version. 

Obligatory Disclaimer

Before we get too far into this, let me say something that I will repeat a few times throughout this article: I am not a financial professional. I am not licensed or accredited to give advice about taxes, investing, estate planning, etc.

This article is about understanding the costs and income of authorship and how to balance those so you set yourself up for success. For advice on things like taxes or wealth planning, speak to someone who specializes in that.

Understanding the Costs of Being an Author

To be honest, understanding the income side of being an author is secondary in complexity (and importance). Money comes in, we’re happy, we write more, more money comes in, repeat. Don’t worry, we’re going to dive into it more than that, but first I want to look at the other side of finances: expenses.

Because making money with your books means nothing if you aren’t aware of how much you’re spending to get people to read them.

The thing with the costs of being an author is that we don’t recognize a lot of them. Sure, you might think about what an editor will run you or how much a cover costs, but we need to dig deeper than that if we truly want to get a grip of the financial side of authorship.

On a personal level, I want everyone who wants to tell a story or write a book to be able to do so. But I also want to equip you with as much knowledge as possible to reach those goals without ending up in four- or five-figures of debt. So let’s arm you with that knowledge before we get to the fun stuff.

Initial Costs

Here are some of the expenses you’re likely to incur (or already have incurred) before your first draft is done.

Writing Tools and Software

First up, you need something to write with—at the very least.

I don’t need to tout the advantages of using Dabble to write your novel. If you’re reading this, you already use it. But that also means you’re paying for it; either monthly, annually, or as a one-time payment to have Dabble forever.

You also might pay for Microsoft Word for formatting or sharing with beta readers (though Dabble can export in .docx and Google Doc formats!), which comes with an annual subscription.

While Dabble’s spelling, grammar, and style checker is powered by ProWritingAid, you might have your own subscription for that or a similar program like Grammarly to take advantage of their more niche features when revising your work. 

Depending on your financial situation, these might not seem worth noting. But, as an author, you are as much a business as you are an artist, and no successful business simply brushes off monthly and annual expenses. Not only do we want a comprehensive view of our financial ins and outs, but these can all be used as tax write-offs (depending on your situation and tax laws—again, consult a professional).

On top of that, you might have software that we’d consider nice-to-haves. Realistically, a program like Dabble is all you need to write a novel: a place to store your manuscript and all the notes and profiles you’ve made to make that dream possible. But that doesn’t mean authors don’t have their fun toys.

This might be worldbuilding tools like Campfire, mind-mapping tools like MindMeister, or note taking tools like Evernote. Whatever nice-to-haves you use, make sure you record how much these are costing you.

Learning and Reference Materials

Being a successful author means understanding you will always be working on your craft. There are very few writers out there who are at the pinnacle of this art and even fewer who will claim to be so.

Which means you should think about ways to continue your learning.

First and foremost, that means writing more (always be writing, or ABW, as we say on our livestreams) and getting external feedback. It can also mean reading the 400+ articles on DabbleU for free.

There might be paid materials you want, too. I’ve yet to meet an author who doesn’t love buying books about writing, so consider setting aside an annual budget for that or a Kindle Unlimited subscription to get access to a lot of them for free-ish.

On top of that, you might consider subscribing to or purchasing online courses through Writing Mastery Academy, MasterClass, Udemy, or a writing coach.

If you can afford it, be sure to keep track of your recurring or one-time expenses for learning and honing your craft.

Pre-Publication Costs

Next up, let’s take a look at pre-publication costs. These are the things you pay for in between finishing your first draft and your book getting onto physical and digital shelves.

For most authors, this will be a wakeup call as to how expensive creating an amazing book can be.

Editing

If you want a complete breakdown of the different types of editing, click here to read our article on DabbleU that demystifies it all. For our purposes, know that editing is an essential part of the storytelling process.

If you’re self-publishing, developmental and line editing are nice-to-haves. Copy editing is mandatory to create a professional novel. Even if you’re submitting to an agent or publisher, a copy edit will make your work stand out and should be budgeted into any book.

Here’s a quick breakdown of what you might expect in USD (though these rates will vary based on the professional you hire):

Developmental Editing: Focuses on the structure, plot, and character development. Costs can range from $0.03 to $0.08 per word.

Line Editing: Involves sentence structure, clarity, and style. Average costs are $0.02 to $0.05 per word.

Copy Editing: Addresses grammar, punctuation, and consistency. Costs typically range from $0.01 to $0.03 per word.

And no, editing your own work isn’t good enough, not if you want to take your author career seriously.

Cover Design

The old adage should go: everyone judges a book by its cover. Your book cover is one of your most powerful marketing tools. If you’re self-publishing, this is something you want to take some time (and money) to get right.

Hiring a designer can range from $200 to $1,000+ depending on their experience and the complexity of your design. Some services offer pre-made covers in the $50 to $100 range, but it’s up to you whether you want a pre-made cover.

You can DIY it, and I always encourage cost savings when you have the required skills to replace a professional. That said, be honest about your skills. If you don’t have training or experience in graphic design or digital art, you might end up hurting your book’s chances before someone reads the first word.

Formatting

This is an expense you only need to worry about if you’re indie publishing; Dabble will export your manuscript in industry standard formatting for submitting to agents and publishers.

When it comes to formatting for publication, you have a few options. First, you can hire a professional. This will vary in cost from $50 to $500, depending on the format (paperback, hard cover, e-book).

Alternatively, this is something you can DIY if you take the time to understand it. If you have a word processor with styles, like Microsoft Word or Google Docs, you can format your e-books and physical copies to meet the requirements of the distribution platforms you’re using.

If you want an in-between option, programs like Vellum and Atticus are there for you. They require some work but do a lot of the heavy lifting, in exchange for (at the time of writing) a one-time cost.

Audiobook Narration

Right now, audiobooks are the fastest growing segment of publishing. If you want to maximize your author income, you want to get in on the action.

If you’re traditionally published, your publisher might take care of this for you (assuming they bought the rights from you and see it as a worthwhile investment). If you’re an indie author, you need to hire a narrator.

On a platform like Amazon’s ACX, you can offer a royalty split with narrators rather than an upfront payment. Bear in mind that they will likely only accept this if you have a proven track record of generating sales.

Alternatively, a narrator might charge a rate that usually ranges between $100 to $500 per finished hour. A “finished hour” refers to the actual playing time your book plays for, and it averages about 9,000 words.

I’ve slotted audiobook narration under “pre-publication costs” but many indie authors commission their narration after publication.

Book Launch

It’s impossible for me to give you a cost range for what your book launch will look like, if you have one at all—though I suggest you do, because they’re a ton of fun and a good way to kick up some buzz for your book.

Costs might include promotional materials, venue rentals, giveaways, and more. 

You can save some money by going digital, and potentially expand your reach, but that’s up to you. 

If giveaways or advance reader copies (ARCs) are part of your launch, factor in the costs of printing and shipping.

Post-Publication Costs

Once your novel hits shelves and e-readers, there are still some costs you need to be aware of (and hopefully prepare for).

These are also the costs you need to be most cognizant of. When it comes to all the things leading up to your novel being published, it’s like a checklist you can go through. Some of these post-publication costs are ongoing and, if not monitored, can eat up a sizable chunk of your bank account.

Advertising

This is where that warning comes in most of all. Advertising is one of the best ways for authors to reach a new audience and make a healthy living. 

However, it’s also a great place for you to unwittingly burn a lot of cash.

To make use of advertising effectively, you need the following:

• A budget you can afford
• A catalog of books that can help with your return on investment (ROI)
• Time to check on your advertising campaigns at least once a week (to start)

You’ll want to choose your preferred advertising platforms, and each of them requires different levels of understanding to use effectively. Facebook and Amazon ads are likely the most common amongst authors, and you’re looking at a minimum ad spend of $5/day.

You also have options like BookBub, which can vary based on genre and book pricing. You have to apply for this sort of advertising and it ranges anywhere from $100 to several thousands of dollars.

While advertising best practices are—to borrow a term from every school paper ever written—beyond the scope of this article, I want to mention that very few authors are successful with ads with only one or a few books. Generally you need a decent catalog so readers can buy multiple books when they love you, thus outspending the cost of acquisition.

Website and Email Marketing

Every author should have a website. It acts as your personal piece of digital property and is the best spot to grow your email list (which is the best marketing tool you can have). 

If you have the budget, you can hire someone to build a website for you. Or you can check out our Deep Dive into author websites (Part One and Part Two) to learn what you need to build your own. I promise it isn’t that difficult.

As far as ongoing costs go, you’re likely looking at anywhere from $50-150 per year for hosting and $10-20 for domain registration.

Your website builder might come with email marketing built-in or you might opt for a third-party platform that specializes in it. This likely adds another $5-$50+ to your monthly expenses, depending on the service.

Other Ongoing Costs

Just to get through these last costs rapid-fire, you might also need to factor in:

Conferences, workshops, and retreats - Don’t just consider the cost of attending these events (which can range from $50 to thousands of dollars, but the cost of transportation, food, miscellaneous spending, etc.

Other subscriptions - You can subscribe to various services like Shutterstock for images to use on your website or in emails, Canva for graphic design, BookBrush for marketing materials with your covers, and more. Be careful, because these can easily get out of hand.

Taxes and accounting - I can’t give you tax advice because Dabblers span the globe and it’s illegal for me to give true financial advice in most countries. That said, most authors are businesses, so you will be paying taxes as such and might consider software like QuickBooks to manage your expenses. Some authors also hire accountants and even lawyers when the need arises. All of these factor into your financial picture.

Income for Authors

Now for the fun stuff! Even if your goal isn’t income-based, making money off your books is still a great feeling. If you plan on making a living or a decent income from your writing, this is quite important.

Let’s divide up your potential income into book and non-book income.

Book Sales and Royalties

When people think about author income, this is likely what they think about first, and rightfully so. With few exceptions, this is where authors will make the lion’s share of profit. It’s what my non-writing friends affectionately refer to as “book money.”

I’m going to break book money up into both indie and traditional publishing, but the concept is the same: people buy your published books and you get a cut of the sale. 

Traditionally Published Book Money

The biggest difference is that traditionally published authors will get an advance from their publishers. This varies widely based on the publisher, author, and genre, but all advances are an upfront payment that you “earn out” through royalties.

That means that your publisher might give you an advance of $25,000, but the first $25,000 you would earn in royalties go to the publisher to earn out that advance. After that, the royalties start flowing to you, generally on a quarterly basis.

Post-advance royalties are typically around 5%-15% for print, 25% for e-books, and 10%-25% for audiobooks, but certain publishers, especially mid-size ones, might change these up a bit.

For first-time authors, I want to pass on two realities you’re going to encounter if you go this route:

1. Most first-time author advances cap at $10,000
2. Most first-time authors do not earn out their advance

Both of these have exceptions, but they are the norm. Thus we circle back to ABW (always be writing) so your next book can earn you even more.

Self-Published Book Money

Self- or indie publishing lets you keep more of your sales in exchange for you needing to do (or pay for) all the other work a traditional publisher would. It also means no one is there to give you an advance.

When it comes to self-published book money, you’re looking at the following royalty rates for KDP (Kindle Direct Publishing) and most other indie distributors:

Print books: 60% less the cost of printing

E-books: 70% less the cost of digital delivery

Audiobooks: 20%-40%

It’s important to note that certain things will influence these rates (for example, Amazon offers expanded distribution which increases your reach to less mainstream markets but only offers 40% royalties on print books).

Other Author Income Streams

At the risk of sounding like an obnoxious peddler of buzzwords, authors have a lot of opportunity to diversify our income. 

In fact, so much so that we have a bunch of articles about this lesser-known side of being an author. I’ll include links at the end of this section to some of those articles, but here is an excerpt from one that highlights the different ways we authors can make money beyond books sales:

1. Freelance writing - You’re a good writer, so translate those skills into a freelance income stream. Depending on your niche or skills, this can include blogs, articles, newsletters, emails, help articles, grants, whitepapers, newspaper articles, or other online pieces.
2. Content creation - Whatever you’re excellent at, write about it on a platform like Substack, Medium, or Patreon. You can also translate your expertise into online courses, non-fiction e-books, or webinars. For those who have the chops for it, you can create YouTube videos or podcasts.
3. Ghostwriting - There are people who want a book but don’t have the skills or time to write it. You can do it for them, usually for a flat fee or royalty split, in both nonfiction and fiction genres.
4. Editing and consulting - If you’re a stickler for rules or knowledgeable about story structure, character development, and everything else writing, you can pursue editing or author coaching.
5. Speaking engagements - Once your books are out there and you’ve proven you know what you’re doing, people will pay you to speak at events, to classes, at conferences, etc.
6. Grants and fellowships - This is an underrated one. There are organizations out there who want to give you money, but not enough people know to apply for grants, fellowships, or residencies that can help support you while you’re writing your awesome books.
7. Awards and competitions - Whether you’re submitting your published work or writing a new short story, competitions can provide a bump in income with prize money and awards can add social proof to your work and boost sales.
8. Merchandising - If you’ve worked hard to cultivate a solid fan base, make some merch for them to buy! This could include bookmarks, t-shirts, posters, etc.
9. Teaching - Once you’ve proven you know your craft (and have the sales to back it up), consider teaching it to others at a college or university.
10. Crowdfunding - While this is far from a proven model, we’ve seen the success of crowdfunding novels from authors with rabid fans—most notably, Brandon Sanderson’s record-breaking Kickstarter.
11. Contribute to anthologies - Work with other authors to create a collection of short stories, leveraging each other’s audiences and skills.
12. Subscription services - Websites like Patreon aren’t just for nonfiction content. You can post short stories there for monthly or per-piece subscribers. Patreon members might be given exclusive access to other content, like behind the scenes notes or bonus stories. Other options like Kindle Vella exist for short stories, too.

I don’t think you need to make any of these your primary income (unless you want to, says the guy who has embraced #1-4 as my full-time job). No matter what you do to buff your author income, though, remember that we want to ABW.

And, as promised, here are some other links about author income to check out:

• How Rich Will I Be After Writing a Book?
• Can You Make a Living as a Writer?
• An Author’s Guide to the Business of Writing
• A Seriously Long List of Jobs That Involve Creative Writing

Financial Milestones in the Author Journey

If money is something most authors avoid talking about in general, the milestones of an author journey or career almost feels very taboo. Seriously, it almost feels forbidden to talk about “financial milestones” when it comes to art.

But the reality is that most authors are curious about this kind of thing. So we’ve broken the author journey up into three distinct, income-based levels. If this makes your skin crawl, don’t stress; use these milestones if they work for you.

On top of that, where you are in your journey can help you figure out how you should be allocating expenses. Is it worth spending $50 a day on advertising when you have two books? No. Is it worth it when you have 50? Maybe!

One more note before we check them out: none of these have a specific dollar value associated with them. Cost of living varies widely, whether we look within a large country like the United States or even between countries. As you read through these, try to imagine what they would look like in your situation.

Milestone #1: Debut Author

During a recent Fireside Chat, Hank and I also referred to this stage as a hobbyist author. In this stage, you’ve just published your first book or maybe have a few under your belt. Here you will get your initial earnings and that will be exciting. Embrace it, love it, and have fun.

Unfortunately, a few books means your costs likely outweigh your early income. Instead of stressing about advertising or optimizing your online presence, focus on two things:

1. Writing more (the best way to make more money)
2. Building an audience via your email list and social media

Anything beyond those two things is nice but extra. Icing on the cake. Bake your cake with those things, bake it well and repeatedly, and you’ll get to the next level.

Milestone #2: Mid-Career Authors

Also known as amateur or journeymen authors, this milestone is marked by your art forming a significant chunk of monthly income. Again, what “a significant chunk” translates to is up to you.

Authors who have reached this milestone are profitable and have usually diversified their income streams with a handful of books. They might advertise for their new releases or bestsellers, but their backlist provides a buffer that propels them into profitability.

So what do mid-career authors do to level up? 

1. Write more. ABW. The more books you have, the more your readers can buy.
2. Expand your reach. Consider a new social media platform, getting onto podcasts or guest blogs, adding some video content to your efforts, etc.
3. Set aside money for marketing, like professional branding or advertising. This requires you to spend some of your hard-earned book money but will get more eyes onto your great work.

A lot of authors reach this milestone and stay here for the rest of their writing career, using book money and other income to pay for vacations, renovations, or a nice date night once or twice a month. If that’s you, excellent. 

If your goal is full-time writing, that’s up next.

Milestone #3: Established Authors

Don’t get hung up on the name, it’s just to be flashy. You can be established and not write full-time—many authors are and don’t. This is the career level, the full-time, or the professional author. 

When you make it here, you have a well-established brand, consistent book sales, and potential for lucrative deals (movie/TV rights, international sales, etc.).

If you haven’t thought about your writing as a business yet, you need to ASAP. I’m talking about maximizing your advertising and marketing budget, thinking about retirement savings (no employer matches on royalties, unfortunately), tax planning and working with tax professionals, and even things like philanthropy, if that’s up your alley.

Budgeting Strategies for Authors

I have a few great loves in my life: my family, writing, Dungeons & Dragons, and waterfalls. If I had to add a fifth to that list, it would probably be budgeting—or, rather, the effects of having a good budget.

When you get to the second and third milestones in your author journey, a budget is definitely something you need to get sorted out.

Even if you’re just starting out, it can only help you to make a budget. I want you to write your stories. I don’t want you to plunge into deep debt for it.

If you’re willing to put in the work, here’s a quick way to build your author budget.

First, Set Your Goals

The first step isn’t even about spending money! Let’s ease into this a little bit.

Before you think about expenses and income, I want you to take some time to set some goals. Specifically, think about these three things:

Define success - Are you pursuing this for income or creative fulfillment? Somewhere in between? There’s no shame in choosing one or the other, and doing so doesn’t mean the other doesn’t matter. We simply need to be able to focus. Use your current milestone to help determine this. 

Short-term goals - What is the immediate goal you’re working on? Think launching a new book, breaking even on expenses, or growing an email list.

Long-term goals - What is on the horizon for you that will probably take multiple short-term goals to accomplish? This might include building a sustainable writing career, reaching the next author milestone, or expanding your existing and future work into new markets.

Once you have these figured out, you can better gauge your budget to what it should be.

Next, Draft Your Budget

Alright, now that you’ve got your goals in place, it’s time to put together a budget that reflects them. I’m not going to stand here and tell you that you need to abide by your budget to the letter—mostly because I’m sitting as I write this. But your budget is also more like a guide or map to help you stay on track (and profitable), so use it as you will. 

Let’s break this down into a few manageable steps.

Step One: Track Your Income and Expenses

The first thing you need to do is get a clear picture of your financial picture. There’s no sense in planning for the future if we don’t know where we are, right?

Start by tracking your income.

List all your potential income streams: book sales, royalties, freelance writing gigs, speaking engagements, and any other sources.

Don’t forget to consider any advance payments if you’re traditionally published or the varied revenue streams if you’re self-published.

If you’re using the included Google Sheet, there are already some income stream options available on the Income Tracking sheet. You’re also free to use whatever method you want for this, I’m not the boss of you.

Next, track your expenses.

On the flip side, you need to track every dollar that goes out. This includes all those pre-publication costs like editing, cover design, and formatting, as well as your ongoing expenses like marketing, subscriptions, and any tools you use for your writing.

Again, use a method that works for you—whether that’s a spreadsheet or an app. The key is to be thorough. If you’ve ever spent money on it, it should be in here.

Then, forecast.

Once you’ve tracked your income and expenses for a few months, you’ll start to notice patterns. Use these patterns to forecast your income and expenses for the coming months. This helps you prepare for any lean periods and plan your spending more effectively.

Forecasting will take time to get a hold of, but it helps prepare you for the future.

Step Two: Allocate Book Money

Once you have your income and expenses laid out, it’s time to decide where your money should go. This is really where your goals come into play.

Start by prioritizing your spending.

Not all expenses are created equal. Some things—like professional editing or cover design—are essential investments in your career. Others, like fancy software or a top-tier marketing campaign, might be nice-to-haves. 

Prioritize your spending based on what’s going to get you closer to your goals and your next milestone.

Say your goal is to launch a successful book. You might allocate more of your budget to editing and cover design, while scaling back on things like advertising until your book is actually out there and generating some book money.

Or, if you’re already established, you might have the funds to advertise before your launch. A budget will let you know if that’s possible.

Consider setting percentages. 

A useful method is to allocate percentages of your income to different categories. You might decide to put 30% toward marketing, 20% toward professional development, 10% into a savings buffer, and the remaining 40% toward immediate expenses like editing or software. (Those are just examples. Again, I’m not here to provide specific financial advice!).

If you’re already mid-career or established, you’ll need to make sure you’re paying yourself, too. If you’re still a debut author, it’s up to you whether you reinvest everything in your writing or pay yourself.

This is your budget, so these percentages should reflect your unique situation. The important thing is to stick to these allocations as closely as possible. They’ll help you manage your cash flow and ensure you’re investing in the right areas.

It’s equally as important to be willing to adjust these percentages if you find they aren’t working for you.

Step Three: Manage Cash Flow

When your writing becomes a business, cash flow is king. And queen. And royal advisors.

You can have great income and still struggle if your cash flow is a mess. Here are some tips for authors to keep it healthy.

Make sure you plan for irregular income.

As an author, your income is probably going to fluctuate. You might have a great month where book sales are through the roof, followed by a quiet period. The key is to plan for these ups and downs.

Consider building up an emergency fund that can cover your expenses during those lean months. Ideally, this fund should be able to cover 3-6 months of expenses. It sounds like a lot, but it’s worth the peace of mind.

Think about automating where you can.

Set up automatic transfers for things like your emergency fund or savings goals. This ensures you’re consistently putting money aside, even if you forget or get busy.

Also, automate any recurring expenses like subscriptions or software payments. That way, you won’t accidentally miss a payment and disrupt your workflow. If you understand your income and expenses, none of these should be a surprise.

Step Four: Review and Adjust

I considered calling this “Step Four-ever” but didn’t want the heading to confuse people. 

Your budget isn’t set in stone. Review it regularly—monthly is ideal—to see how well it’s working for you. If you find that one area consistently goes over budget, or if you’re not hitting your financial goals, adjust your allocations accordingly.

The key is flexibility. As your author career evolves, so should your budget.

Optional Step: Consult with Professionals

Real talk, I’m just an author and guy that gets to make content I hope you find valuable. I can’t provide you with specific tax laws, chat about index funds, or provide you with specific advice.

This budget will definitely help in the early stages of your author journey and, if you know enough about your situation, in the later stages as you adapt it to meet your needs. But it’s no substitute for professionals.

If your income allows for it, consider consulting with financial experts to maximize your personal situation and income.

Now, before I sign off, I want to drop a few extra tips for you, whether you traditionally or indie publish.

Budgeting Tips for Indie vs. Traditionally Published Authors

When it comes to budgeting, not all authors are in the same boat. Indie authors and traditionally published authors face different financial landscapes, and your approach to managing money should reflect that. 

Let’s break it down so you can see where your priorities should lie, depending on your publishing path.

Specific Considerations for Indie Authors

As an indie author, you wear all the hats. That means you’re in control of everything from writing to marketing to sales—and yes, budgeting too. Here’s what you need to keep in mind.

Full Control, Full Responsibility

The best part about being an indie author? You have complete control over your work. The downside? You’re also responsible for every expense that comes with it. From editing to cover design to marketing, it’s all on you.

This means you need to be meticulous about where your money goes. Prioritize essential expenses like professional editing and a killer cover design—these are non-negotiable if you want your book to stand out.

Quality vs. Cost

It’s tempting to cut corners to save a few bucks, but remember, quality matters. Readers will notice if your book looks or feels unprofessional, and that can hurt your reputation and sales.

Invest where it counts. If your budget is tight, consider DIY options only if you have the skills. Otherwise, it’s worth spending a bit more on professionals who can elevate your book—even if it means saving and waiting until you can afford them.

DIY Isn’t Always Cheaper

Sure, you can format your own book or design your own cover, but is it really saving you money? Factor in the time you’ll spend learning new skills, and consider whether that time might be better spent writing your next book.

Sometimes, hiring an expert can actually be more cost-effective in the long run, freeing up your time to focus on what you do best: writing.

Be Strategic with Marketing

Indie authors need to be savvy about marketing. Without a publisher backing you, every marketing dollar has to count. Start small—test different platforms like Facebook ads, Amazon ads, or BookBub deals to see what works for you.

Keep track of your ROI (return on investment) and don’t be afraid to pivot if something isn’t working. Remember, marketing is an ongoing process, and what works today might not work tomorrow or might not work for you.

Build a Financial Cushion

Income as an indie author can be unpredictable. You might have a great month followed by a quiet one. That’s why it’s crucial to build an emergency fund—a few months’ worth of expenses set aside in case of a dry spell.

This cushion gives you the freedom to invest in your writing career without the stress of worrying about day-to-day finances.

Specific Considerations for Traditionally Published Authors

Traditionally published authors have a different set of challenges. While you might have the backing of a publisher, that doesn’t mean you can relax when it comes to budgeting. 

Here’s what you need to think about.

Understanding Contract Terms

First and foremost, know what’s in your contract. Advances, royalties, and how expenses are handled—these are all things you need to understand. Some publishers might cover certain costs (like marketing or cover design), but others might not, though we always advise you to avoid those types of publishers.

Even with a good publisher, you’ll be paying for gas to meet your agent or go to a book signing. You might get a food allowance for an event, but you might not.

Don’t assume anything. Ask questions and get clarity on what’s expected of you financially. That way, you can budget for any out-of-pocket expenses you might incur.

Earning Out Your Advance

Advances are great, but remember, they’re not free money. You won’t see any royalties until you’ve earned out that advance. This could take a while, depending on your sales, so plan your budget accordingly.

Don’t blow your advance on non-essential expenses. It might be tempting to treat yourself, but the smart thing is to set aside enough to cover any additional costs that might come up during the publishing process.

This is hard. Imagine the restraint it would take if you received up to a year’s salary right now?

Collaborate with Your Publisher

Just because you have a publisher doesn’t mean you’re off the hook when it comes to marketing. Most traditionally published authors are expected to contribute to their own marketing efforts, whether it’s through social media, book tours, or other promotional activities.

Work with your publisher to understand what they’re doing and where you can fill in the gaps. This will help you allocate your budget more effectively.

Prepare for Tax Season

Advances and royalties are considered taxable income, so make sure you’re setting aside a portion of your earnings for taxes. Depending on where you live, you might also need to pay estimated taxes throughout the year.

If you’re unsure about the tax implications of your author income, it might be worth consulting with a tax professional who understands the nuances of publishing income. This is true for both traditionally and self-published authors.

Long-Term Financial Planning

If your writing career takes off, you might need to start thinking about long-term financial planning—things like retirement savings, investments, and estate planning.

Just because you’re making money now doesn’t mean it will last forever. Your publisher isn’t going to market your work for long, so what happens when that budget runs out? 

Be smart with your earnings, and think about how you can ensure financial stability in the years to come.

Writing a Book is Always More Than Just Writing

If being an author is something you’re serious about, managing the finances of this hobby or career is something you need to take seriously at some point or another. Just because this is an art and we’re artists doesn’t mean we’re off the hook from real-word obligations and math.

I hope this Deep Dive has shed some light on how you can better manage your finances. If anything, I hope it made the money part of writing a little less scary and, if I’m being optimistic, even exciting.

Once more in case you missed it, here’s the link for our simple author budget tracking Google Sheet. Just make a copy and use it to help your author goals come true.

Happy writing!

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