Freelance game writers across the globe dread the prospect of managing their financial books and keeping track of their income. Yes, life as a 1099 is not always glamorous – even though you can work and play video games from the comfort of your own home. No freelancer ever got into the business with an unquenchable desire to start using weird accounting terms like liabilities, depreciation, and variance. (Learning the lingo in League of Legends was hard enough.) What you might learn by necessity is the difference between a Cash Flow Statement, Balance Sheet, and Income Statement. It all depends on your business status and how complex you want to make the process. You see, Uncle Sam doesn’t care how archaic the process might be for you. He needs your taxes either way, and to avoid paying more than your fair share, you’ll want to be prepared. There are a specific set of lessons to learn along the way that will change how you approach handling your finances, saving you more time to spend playing Destiny.
The first and most important thing to remember is that learning new skills takes time and you should be willing to do it. No one arrives on this earth financially literate, and it doesn’t require as much complicated math as you might expect. The math that you likely dread from your High School days is hardly what will be practically applied to your freelancing business. I’ve known some freelancers who hire a bookkeeper to handle their financials. While helpful it’s not entirely necessary especially if you want to keep a close eye on your numbers. It’s more helpful long-term to educate yourself on the usage of accounting software when you’re just starting out. The experience is overwhelming at first but well worth it when you discover how useful it is to have an inside look at how well your freelance business is performing. It’s not quite Clash of Clans, but it’s a start. Not to mention you’ll become more adept at balancing your checkbook! (Woo-hoo?)
Speaking of your checkbook, there’s two types of money that you should have available to you. Your business savings as well as what you can invest. Freelancing can be a risky business venture at times, but both saving and investing can be useful. Savings is what will keep you afloat even when times are tough and clients are slim. Money set aside for investing however can ensure that you’ll have clients for years to come. When I say ‘investment’, I don’t mean what you would traditionally think of. I’m talking about the calculated decision to ‘bet’ on your future. Writing an eBook is an investment when you write it for a specific purpose with an anticipated outcome. Renovating an old website is an investment. You’re funneling money and effort into it up-front in the belief that it will help you convert more traffic and customers. Combined, you’ll have the resources to take changes and potentially create new opportunities. With those handy bookkeeping skills you’ve acquired, now you’ll know whether spending your money on those investments is worthwhile.
Being a freelance gamer writer like anything else requires a healthy mindset. Manage your expectations, primarily through understanding that you it’s necessary to plan for the good AND bad times. Know your business inside and out. Record your spending and document your income – not unlike the early 90’s when every dungeon crawler required creating your own map. Calculate what works and what doesn’t. Arm yourself with knowledge so that you can make the best decisions possible and avoid a ‘Game Over’.