Freelance Finance

Last week we did some traveling, sharing the Freelance Finance System with some new friends and acquaintances. One question that came up often: Will people really be disciplined enough to save money this way? The question is rooted in the notion that people are by nature bad savers, that they will routinely spend their cash on a quick thrill today, rather than delay that spending for a future goal. This belief is used to support the use of electronic withdrawals to set up weekly, biweekly, or monthly deposits. “It you don’t use an electronic system,” goes the theory, “you probably won’t save.”

Our system, as you may know, is strongly “analog.” As each check comes in the door, you yourself must manually divvy up the cash on a percentage basis—20 percent to retirement, 10 percent to your emergency fund, and so on—down the list to every account on your list. We believe that many independent workers would end up staring at a bunch of overdraft fees at the end of the month, not money in the bank, if they set up automatic withdrawals. That’s just the way it is. Independent workers have a huge problem with cash flow. One month up, one month down. You often cannot predict or guarantee that on the third Friday of the month you will have the $150 that you intend to send to your retirement account.

So you need a better way. Our system is based on the way people saved money in the days before computers: by sheer will.

When we was speaking to some people last week, I said, “Look: If we went back in time to the days of your grandparents or great-grandparents, we would probably find that this is how they saved money. Every Friday, when they got their paychecks, Mom and Dad would sit at the kitchen table and divide the cash into various piles. So much for rent, so much for food, so much for the future, and so on. If they could do that then, why can’t we now?”

The eyes in the room lit up. People understand this low-tech approach, but somehow still crave the high-tech toys which absolve them of applying discipline to their lives.

If you have worked freelance for a couple of years and have met with success, you already have enough discipline to save money this way. It takes discipline to work alone, to court customers and clients, to buckle down, do a job, and keep billing. So don’t worry about being able to follow the system. You’ve got what it takes. Just start doing it.

One confirmation of this view came to me this week as I was reading Writing for Story, a book about the craft of non-fiction writing, by the Pulitzer Prize-winner Jon Franklin. Franklin’s classic story about Wilk Peters, a sharecropper’s son who puts himself through college, learns six languages, and travels the world may well be the most inspirational story you will ever read. Early in the piece, Franklin tell how Peters saved money while working as a day laborer in a sawmill. Remember, this is a true story, and takes place sometime in 1918 or thereabouts.

By day he worked at the sawmill, by night he studied, on Sundays he went to the local church, on payday . . .

A dollar became, with the addition of another, two dollars. Five dollars grew into ten, ten became twelve, twelve became thirteen.

Read those lines again. Can you feel the poignancy and the man’s determination? Back then, it took Peters weeks or even months to save a precious $50 to help himself pay for college.

I believe that all of us has that kind of determination in our bones. We may not know it because we haven’t seen it in a while. Fifty bucks flies out of our wallets for beer and wings on a Friday night without a second thought. But if we want something bad enough, we can summon the will.