Kali Hawlk

Helping Creatives Make More

Stop Living in Someone Else’s Narrative and Start Creating Your Own

Stop Living in Someone Else's Narrative and Start Creating Your Own

There’s a common narrative in our society, for those of us born at a certain time and place. If someone ever made you feel like a special snowflake, chances are this means you.

Have you heard the narrative? It says that we’ll all be okay — everything will be okay — if we just follow the steps that “they” determined created a path to guaranteed success. It started with going to school. And in grade school, showing up was enough.

Don’t worry about doing anything more. Show up, sit down, make no noise, ask no (real, authority-challenging) questions. Revere the rules that were made to efficiently process massive groups through an education system. No exceptions, only adherence to the system that could only deal with the individuals within it as a massive unit, pushed through a factory of standardized tests.

All the while, a promise encourages us to continue moving forward: as soon as we get through the system, as soon as we “grow up” and get to go play in the real world, we’ll get to enjoy complete and utter autonomy in our lives. We’ll get to become whatever we want, just because we wanted it.

What could define freedom and choice more than the idea that you can be whatever you want?

Growing up, we were convinced that we could be whatever we wanted to be. If we could dream it, we could do it.

But somewhere along the way, the people in charge forgot to give us the tools to actually accomplish this. They were big on fluff and distractions, and short on providing actionable skills, experience, and knowledge.

Somehow we decided to skip right over things like how to budget and set up the right insurance policies for our needs, how to invest wisely over a period of decades to create a secure financial future one day, how to find our grit and commit to a big goal, how to work hard and innovate to create work and careers that allowed us to serve others in a way we also found fulfilling..

Who has time for that?

Instead we cruised right on by in our spaceship of unreasonable optimism because we’d get to be whatever we want one day! We were special! Unique! Snowflakes, even!

And the moment things in life start skittering off the rails, we found how easily we could be destroyed. When the trouble started, when the first real problem cropped up for us, we realized we were inadequately prepared to tackle it.

Those practical matters, the street smarts, the fundamentals of “how to scrape by as an independent adult making your own way” — well, they didn’t matter much. Somehow they were considered unimportant in our education. The grandiose idea of following a dream and having our lives magically work out in our favor was much easier to sell than the practical application of the theory. Than the work it would take to make that happen.

(Or perhaps between years of tests in school they simply ran out of time to cover something that might actually matter one day.)

But wait — what if more standardized solutions for all provided an answer to these woes? The narrative, it seems, continues.

Once your primary education concluded and you found yourself on the doorstep of the real world, you were saved from figuring it all out on your own for another four years. Saved again by the narrative that said we’ll all be okay — everything will be okay — if we just go to college. A proper university, one with four-year degrees (preferably in another state or at an overpriced institution so you can pay more for the same end result).

Thank goodness that decision was made for you. Just trot your newly-minted “adult” self into the halls of higher education and within a year or so declare a major that would neatly lop off a majority of your career options. Or eliminate them altogether if you went completely rogue and majored in something like English. Or philosophy. Please God say you didn’t major in anthropology.

Oh, that’s right! It didn’t matter — you could always continue to rack up mind-numbing amounts of debt when you went off to graduate school for lack of anything better to do.

Eventually, however, there came a day when the narrative started running out of options for you. Maybe it happened when you finally graduated with your fancy degree, ready to step out into the long-awaited real world as a free adult about to become whatever they wanted to be. It was out there that your dream job waited to embrace you with open arms, where you’d never work a day in your life because you loved what you did.

Or maybe you followed the narrative down the rabbit hole a bit further; maybe it took longer to realize you’d been in the driver’s seat of your life but suddenly looked around and had no idea how you’d gotten miles from where you started.

Perhaps it hit you that the accepted narrative hadn’t delivered on its promises when you first noticed that you hadn’t made a conscious, intentional, and deliberate decision based off what you wanted your life to look like in years.

It’s at this point you’ll wake up and wonder what just happened. You’ll ask why you’re not happy and fulfilled. You believed in the narrative. You trusted it. It was your story, too.

So what went wrong? Why did the narrative lie about the steps you needed to take to move along the path of financial, professional, and personal success? And more importantly, what happens when you wake up and realize the dream is over? When you realize the story didn’t come true?

What’s next is an opportunity to strip away someone else’s instruction book for life. Now that you’re awake, you can start asking questions. Stop following the general guidelines that keep the sheep safely with the flock.

If you want to actually experience something meaningful, if you want to show your gratitude for miraculously existing as a living, breathing, thinking, conscious being made up of starstuff, then you must start living mindfully.

You must burn the rule book and create your own correct way of experiencing your life. You must make intentional decisions about how to live a life that you are responsible for creating. And as soon as you’re awake, you need to start.

Wait for nothing and no one. Start digging into your own self and discover what you truly want. Then get after it relentlessly, tenaciously.

There are no generally right answers out there for us all to accept as the one way of creating ourselves and what we experience. There’s only the realization that there’s a right answer for you as an individual and you have the ability to find it better than anyone else — because it’s always located somewhere between your gut and your soul.

Want to Change Your Circumstances? Change Your Mindset

Change-Your-Mindset

There’s a short loop I like to run near my house. This particular route doesn’t have a level, flat section on it. I’m either trudging up a hill or pounding down one.

Constantly running up and down hills isn’t easy. It requires you to power through when you’d really prefer to slow to a shuffle. Your legs burn from the effort of propelling yourself not only forward but upward.

Running hills often sucks. It hurts.

When I run this route, or when I run longer distances than I’m used to, or when I try to do things like interval training — whenever I push myself, it hurts. And I can’t think of anything except for the mantra Scott Jurek shared in his book, Eat and Run: My Unlikely Journey to Ultramarathon Greatness:

Pain only hurts.

It plays over and over and over again in my head and I get through tough runs. I run up hill after hill. I do the last set of sprints that I’d rather avoid because they’re hard. I run a quarter mile farther than I thought I could, and then I run another.

Because all that “suffering” is only happening in my head. It’s only as painful as I let myself think it is. It’s a story I tell myself.

And I want to think it’s terrible and awful and I’m dying because if that’s the case, I can quit. And quitting is so much easier than pushing forward and continuing to make an effort.

Effort is hard.

When you think you cannot run one more step, that is your mind. Your legs would disagree and can keep going long after your mind throws in the towel.

Pain only hurts.

Dealing with the Pain of Undesirable Circumstances

Millennials are the most educated generation in history. And we’re also the most likely to find ourselves underemployed.

Those of us who graduated from college right before and during the recession faced a tough job market
Underemployment — and the flip side of that coin, under-earning — present problems well beyond the first few years of your career. When your entry-level salary is low, your earnings suffer throughout your working life.

This all sounds pretty dire. Very doom and gloom. And make no mistake, this sucks for people whose only mistake was being born in the wrong year, and therefore ending up in the wrong graduating class. Some of us missed a booming job market with healthy salaried positions by a frog hair.

But pain only hurts.

While you may feel helpless, that’s not the reality. If you believe your career and financial situation is out of your control, you’re buying into a lie. It’s a lie that will keep you underemployed and under-earning for as long as you choose to believe it.

You can believe that the pain and struggle you experience will prevent you from moving forward and improving. Or you can believe that, while these things freakin’ suck and life is hard, you are bigger than your challenges.

You can do the work that is hard and come out on the other side with something more.

You can change your mindset and start approaching your problems from new angles. Those new angles will lead you to solutions you couldn’t see before. A shift in mindset can bring you to new opportunities, new work, new income.

Of course, that’s easier said than done. But “easier said” never means “impossible to do.”

Why Mindset Matters

We attract what we think about. We become what we think about. Positive thoughts yield positive results.

When you think negatively, your mind goes into defensive mode. You start looking for things to go wrong. You expect things to go wrong.

You focus on what threat will come your way next to set you back — again. Your life is hard, nothing’s fair, the deck is stacked against you, and you have no choices. No options. You can’t do anything about it.

You are stuck. You are doomed to a life of perpetual wheel-spinning, where no matter how hard you struggle nothing improves.

Isn’t it exhausting to just read something like that? It’s exponentially more tiring to think those things in your own head, day after day after day.

In fact, dwelling in a negative mindset where these thoughts are free to lurk in your head is so exhausting it leaves you with little room or energy for anything else.

Anything else like.. looking for solutions to your problems instead of looking over your shoulder for the next thing that’s going to screw up your plans. Anything else like.. keeping yourself open and receptive to new opportunities that could propel you forward. Anything else like.. developing ways to earn more money and finding work you love.

Your mindset has a real impact on how things turn out for you.

I’m not saying run out and buy The Secret, or chant “I will find a million dollars” 50 times a day and expect a pile of cash to materialize in your living room. That’s not how this works.

Changing your mindset is but step one in a long, hard process that will require you to put a lot of blood, sweat, and tears into your goals if you want to achieve them. Mindset matters because if you can’t change how you think, you can’t change how you act. If you can’t change how you act, you can’t change your circumstances, your work, your finances — everything will stay the same.

And you want to change things up, right?

How to Change Your Mindset for Positive Growth

Okay. Point taken. Mindset matters.

Now what?

Let’s focus on how you can change your mindset. Remember, this is the hard part — the actual doing. Expect this to take time and effort before you start seeing tangible results. (And if you’re like me, you’ll also find that it takes more than one try to get it right.)

Start by identifying your current mindset. You may feel hopeless, confused, scared, angry, resentful, or frustrated. All of these negative emotions present big blocks to positive growth and change.

And they may be valid! You’re entitled to feel this way. Sometimes, it can be cathartic to acknowledge that you’re thinking this way and why you do. Just don’t stop there. Acknowledge, then let go and make room for something better. Here’s how to give that a try:

Accept Responsibility. Can you control everything that happens to you? Of course not. But you can take charge of your reactions to the events around you. Instead of blaming others or external forces for negative events, accept responsibility for your role in your own life. Realize there are still decisions you can consider and make. You’re not helpless. Your ability to decide and act is powerful!

Try New Things. Fear is a big cause of mindsets that keep us stuck in circumstances we don’t like or want. Many times we’d rather choose what is safe and known rather than stick our necks out to go after what we truly want out of life. If you’re struggling to change your mindset because you’re afraid of the unknown, try something new. It doesn’t need to be related to your bigger goals or what’s currently holding you back. Just get into the habit of stretching yourself. Try small things at first and gradually work up to new things that carry more impact. You’ll start to understand that taking action isn’t scary, and you’ll have a wealth of new experiences that may help you see the world around you in a new way.

Practice. You’re not going to nail this overnight. Practice thinking positively. Practice doing that thing you want to accomplish, whatever it is — from running to public speaking to interviewing and so on, you cannot improve if you don’t consistently practice to hone your skills and abilities. Continue to get out there and try. Commit and persevere.

Make the Most of Your Money: Are Conferences Worth It?

Are Conferences Worth It

Last week, I flew out to Las Vegas for New Media Expo. NMX is a huge conference for content creators of all kinds: bloggers, podcasters, web video and series producers, and more.

Events and conferences like NMX promise a lot to attendees — and they should, when you consider the costs of going to a conference.

You pay not only for a conference pass, but you also need to pay for transportation to get there and accommodations once you arrive. You’ll probably want to eat at some point, too, and meals out for 3 to 7 days becomes a big expense.

Of course, there’s not a standard cost associated with industry events. Your expenses will depend on what type of event you attend, where it’s at, and how long you want to stay. (It may also depend on where you live if you need to fly.)

Some conferences will run attendees $1,000 — just for the pass or ticket. Others are more accessible. In my own experience, I don’t know of a conference that offers a better deal than FinCon for anyone in the financial space (including pros like financial advisors).

Tickets can go as low as $150 and range from there on up during early bird sales. But the standard price is just $349. Conference organizers also make a sincere effort to keep costs low for attendees, like choosing locations based on reasonable hotel room price.

Regardless, any nonessential expense when you’re underemployed and under-earning can seem like a real burden. Make that doubly-true if you’re like me: frugal, skeptical of hyped-up anything, and inexperienced with how in the hell networking actually works.

When money’s tight but you want to advance your career, do conferences and other industry events make good sense?

Do Industry Events Provide a Real ROI?

I would argue that, yes, the right event can provide a return on the investment you made to get yourself there. Along with choosing the right event, you need to develop the right mindset before you go.

You need to have a goal. What do you want to achieve at this conference? What outcome would make it a successful event for you? Don’t go without a plan or without an idea of what you’re looking to accomplish.

If you come prepared, an industry event can help you learn a new skill that you can implement back home — and practice it until you become more qualified for that job you couldn’t get last year. Industry events enable you to connect with people, in person, that you might otherwise send a forgettable email to that goes no where. Attending something new can open your eyes to new things, and provide insights and ideas that you didn’t even realize were options and solutions.

I’ll let you in on something I’ve learned: skipping out on in-person events is one of the biggest mistakes I’ve made (and continue to make!) in cultivating a career I love. This includes all kinds of events, not just expensive conferences.

How to Make Conferences Worth It

Why is that? What do attendees get out of these things that make conferences worth it?

Education: If you attend any events with speakers, panels, or sessions, there’s an opportunity to learn new things from an expert in the industry. You can also have the opportunity to ask questions and speak one-on-one with the presenter. Even if you don’t learn something completely new, old information presented in a new light can provide a lot of inspiration.

Inspiration and Motivation: Inspiration is really everywhere when you attend an event and engage with the content. Conversations you have, sessions you attend, and people you meet can all help you feel inspired and ready to make progress on your work. Seeing other people doing something amazing can motivate you to try one of your ideas. Just spending time somewhere new can spark fresh ideas and creativity.

Networking: This is a biggie. My favorite part about conferences is getting to hang out with new friends and old. It’s getting to talk to new people and hear what they’re working on and why. Networking can lead to awesome new opportunities and, when you work virtually, it helps you connect names and faces. That’s huge!

Networking Doesn’t Need to Come Naturally!

I’m still figuring out the benefits of in-person events myself, and as an introvert, I’m constantly having to push myself to get out and attend. One of the biggest take-home lessons for me from NMX wasn’t from a session, or even connections made from my own networking efforts. It was from watching other people network.

I did hand out a few business cards, but I intentionally hung back at some points just to observe others and how they interacted with people they didn’t know. It was fascinating how good some people were at this.

They’d give the same elevator pitch to every single person, but each time it was tweaked just a little bit and tailored to that specific conversation. It wasn’t mechanical, it didn’t sound fake, and it didn’t come off as rehearsed. Even though they were talking about their own work, their words actually meant something — it didn’t all get translated in my head as “me me me me me me me.. oh, and me!”

And almost every single time, these people were asked, “do you have any [business] cards?” They didn’t have to force someone to accept their information; people wanted to know more. I was impressed and a little envious at how easily all this came to these people.

Then it hit me: they learned how to do this! And then they practiced and built experience. That, of course, meant I could learn and practice it, too.

Sure, some people can talk the ears off a brick wall, but it’s one thing to be comfortable speaking. It’s another to know exactly what to say, how to say it, and when in the conversation. These were polished skills at work, not just natural extroverts going to town without thinking.

If you feel uncomfortable with networking, talking about yourself and what you do, or unsure of how any of this works, know that these aren’t skills reserved for a select few. These things can be taught. And you can learn.

That was my big takeaway from NMX: keep getting out there and continue to learn how to market myself. While I’m much happier (and more comfortable, and better) at marketing other people, learning to create fans and followers for yourself is a critical skill — and one I need to work on.

Where to Start to Boost Your Career

Industry events can provide you a real return on your investment — again, especially considering that you don’t have to shell out big bucks to attend major conferences.

If you’re not comfortable spending money when you’re not earning much, start small and local. Check out meetups that happen in your town and search to find organizations, groups, or clubs that function in your field or areas of interest. (Try Meetup to find something around you.)

Get out there and interact with others. Remember, everyone has something to teach you that can help you reach your career and work goals.

Not sure how to put yourself out there? Take a step back and learn first! You can attend seminars or join groups like Toastmasters to learn and practice new skills. You can rely on books, as well, as long as that’s not your sole strategy.

It’s one thing to know what to do. It’s another to get out and put it to work for you.

And even though they cost more, big industry conferences can provide a huge return on investment. You don’t have to hit them all, but do consider creating a savings fund to get you to an important one each year.

For me, that conference is FinCon. I’d beg, steal, and borrow my way to get there every year if I needed too — it’s that much fun, and it’s that valuable. I’ve made incredible connections there, l picked up some of my best clients from those networking events, and made great friendships. I always walk away with new knowledge and lots of inspiration.

Shameless plug: I’m extremely excited for this year, as XY Planning Network — where I’m the marketing manager — is also holding #XYPN15 during the same week and location. It’s going to be one big week of amazing people and fantastic content.

Conferences are worth it if you choose the right ones for your goals. Think about what you want to accomplish with your career, and then make a plan to get to an event that can give you a boost.

What are your favorite conferences, or must-attend events throughout the year?

5 Blogging Mistakes I Made (and You Can Avoid)

Blogging-Mistakes-to-Avoid

Want to start earning side income? Almost any gig you take on can benefit from an established online presence. When people want to find or know something, they fire up Google — and with time, best practices, and a little know-how, a Google search can lead straight to you.

(That’s why Googling financial writer for millennials is so fun for me, by the way.)

You can hang your digital shingle with a static website that covers the basics: about you, what you do, who you do it for, etc. But you can earn yourself a gold star if you take it one step further and start a blog.

A blog is a powerful tool for growing your reach, establishing your expertise, and allowing people to connect with you. It’s extremely simple to set up a blog on your website and start sharing your thoughts, tips, and tidbits with the world.

It’s also extremely easy to screw it up, too.

I’ve made my fair share of blogging mistakes — and I continue make them. There’s nothing like learning by doing, but if you’re interested in starting up a blog to help grow a side hustle, gig, or business, please feel free to learn from my errors.

Here are the 5 biggest blogging mistakes I made when I started, and, knowing them, you can now avoid with your own blog.

1. Starting Without a Plan

Many people ask why I started blogging, and I always struggle to answer this. I don’t have an inspiring, I paid off a gazillion dollars worth of debt while feeding my family of 8 and running a nonprofit to save the polar bears story. I’m not an investing guru (but that doesn’t mean I don’t know how to invest) and I don’t want to quit my job to become a full-time blogger.

I started a blog because I wanted to write. I decided to write about personal finance because money has always, in one way or another, fascinated me. Whether it’s not having enough of it, trying to figure out how to make it, wondering how to stretch it farther, curious about how to make it go to work on its own — I wanted to share what I knew about money and I wanted to learn more.

But I didn’t have a plan. I flew by the seat of my pants for a long, long time.

This might not have been such a problem if I was only interested in money — which I thought I was. As it turns out, I’m interested in just about everything. I’m totally guilty of that squirrel! mentality.

So every time something caught my attention, it showed on the blog in some form or fashion. I didn’t have a plan, and I didn’t have to tell anyone that for everyone to know. It was obvious.

Before starting a blog, take a few days to think. To brainstorm. To plan.

Think about what purpose your blog serves. Who will you write for and why? What do you want to achieve and what value do you want to provide?

You don’t need to create a full, formal business plan. But you shouldn’t crank things up and come out guns blazing if you haven’t given a single thought to what you’re going to write about in six months down the road.

Before you start, have a plan.

2. Working Without a Strategy

On a similar note, I meandered around without a strategy for far too long. I didn’t post on a regular basis and I didn’t keep an editorial calendar.

When I started, I posted whenever I felt like writing something. Sometimes I posted new content every day for three days straight — and then radio silence for three weeks.

Not only is this hard for you as a writer to keep up with, but it’s annoying as hell for anyone reading your blog. If someone is reading your blog and enjoying what you write, you have yourself a precious little snowflake there. That person is AMAZING! They like what you’re doing! Can it get any better than that?

No way. It doesn’t get any better than someone who previously existed as a perfect stranger coming across your blog and forming a connection via words you wrote. Holy cow! What a compliment.

So do that person a favor and create a strategy to keep your blog on the rails. This means:

  • Choosing a posting schedule
  • Creating an editorial calendar
  • Determining content pillars, or 3 to 7 major topics that you blog about

Creating a strategy for your content means your readers know what to expect and when. It’s the least you can do for people who are kind enough to pay you an online visit to hear what you have to say.

3. Writing for Other Bloggers (Not Your Audience)

Of all the blogging mistakes I’ve made, this is one I corrected fairly quickly. But it’s a common one that seems hard to avoid for most people.

When you first start blogging, you want to grow your audience and get a foothold in a blogging community, right? You want your posts to be shared hundreds of times, you want a big loooong discussion thread in the comments, you want new traffic flocking to read your words.

And that’s why this is a hard mistake to steer completely clear of. You want to feel like you’re part of that inner circle of bloggers who always comment on each other’s posts or shares each other’s content. You want to be seen and heard!

But you can take it a step too far.

This happens when you start writing for other bloggers, and not for your real audience. (Of course, if you’re writing a blog for bloggers, that’s another story.)

When I wrote for other bloggers, I did link roundups as a way to try and say “thanks” when those same bloggers included me in a roundup. I wrote “monthly goals” posts because lots of other bloggers did and that content seemed to generate engagement in the blogging community. I wrote really generic, blah stuff because I saw other bloggers writing and sharing that kind of content.

I went through and deleted most of those misguided posts when I rolled my financial blog, Common Sense Millennial, into my new site here at KaliHawlk.com. They were that bad.

When I wrote for myself or for my audience,  my writing made a statement about who I was and what I believed. It wasn’t concerned about what others in the community might think, or whether it would get shared by other bloggers X amount of times.

I went on a rant about why Dave Ramsey drives me crazy, I explained how Lord of the Rings could teach us a thing or two about money,  I opened up about why I’m not interested in having kids, and I advocated for everyone to consider a go to hell fund.

Not everyone will like these posts when you write what you’d want to read, or when you write for your audience instead of other bloggers. That’s okay.

Remember who you’re writing for and why — and don’t be afraid to be a little different.

(Bonus: you could also add “blogging for Google” to this list of blogging mistakes. Same idea, different entity. Blogging for Google means you’re only writing with SEO practices in mind and not writing for people.)

4. Being Scared to Flop

Speaking of being different, going out on your own special limb is scary. You don’t know if anyone else is going to be out there waiting for you. What happens when no one picks up what you lay down?

I admit, I started letting this fear take over for me a while ago — and like all these other blogging mistakes, it showed! I started writing things that were dull, generic, and formulaic. The information was accurate, but it wasn’t compelling. It might have been educational, but it didn’t make anyone sit up and take action.

Being scared to write something that flops is natural. But if you fear hitting that “publish” button, you won’t write as often. You won’t share amazing stories and funny commentaries and life-changing ideas.

You’ll hide away all your best writing for fear that it will miss the mark and people won’t get it, or you.

The fact is, you will flop sometimes. You’ll pour a lot of energy and creativity and you-ness into a post and you’ll be met with cricket noises. You might even get a negative comment or two.

But you know what? You need to own your corner of the internet! It’s the only place you can write and not have your work edited or trimmed down or fundamentally changed before it’s published. Don’t waste that amazing opportunity to take a running leap into the ideas that you want to share.

5. Censoring Your True Voice and Tone

I saved the very worst of my blogging mistakes for last. It was only recently that I realized how big of a mistake this one was — that I realized just how much I had smothered my own voice and tone in my writing. Even on my own blog!

It started innocently enough. I increased my freelance writing work (a good thing) and found myself writing for more major outlets (another good thing). These major outlets and big clients came with professional editors. They had MAs in English and journalism and they knew the AP Style Guide, the MLA Style Guide, and the Chicago Manual of Style by heart.

And all their guides sniffed and turned up their noses in places where I tried to let a little sass shine through in my writing. They clucked at long, complicated sentences even when that long, complicated sentence was used to make a point. Or to tack on some humor. Or to change up the rhythm of a paragraph.

I started slashing adverbs in the pieces I submitted. I stuck to short, simple sentences. I cut out funny little rambling asides and attempted to shield my work from any form of the “be” verb.

(It always finds my writing, though, because sometimes you just need to say, “This is how things have always been, so if you could cut me some dang slack I would appreciate it.”)

In my effort to follow the rules and appease faceless editors, I whittled down my writing to the bare bones. When I threw out every last “bad habit,” I accidentally chucked my voice out too.

My writing was technically better, but emotionally? It sucked.

Something I should have been so incredibly proud of — the fact that you could pick out an article I wrote even when my name wasn’t on it, because of the humor, the sass, the snark, and the overall tone — disappeared before I realized what happened.

I’m working on correcting this mistake, but it’s a big one to recover from. The only fix: get inspired, get motivated, and write a whoooole lot just for yourself. Experiment with words, find new ways to get creative, and capture new ideas. Do a lot of free writing — and put away the computer from time to time. Write out something by hand.

These are good exercises to practice no matter what. They’ll help you fine, hone, or rediscover the voice and tone that is 100% YOU.

Avoid Blogging Mistakes and Get It Right the First Time

I’m a good writer. I’m not a good blogger. These are just some of the mistakes I’ve made (and continue to make)!

But that’s okay. They all provide learning experiences for me.

Hopefully, sharing my errors helps you avoid making the same missteps if you want to start a blog (or improve the one you’ve got).

If you want further tips from someone with more experience (and blogging success) than myself, Donna Freedman may have something for you. Donna has more than 18 years of experience working as a journalist, freelance writer, and blogger. She’s part of the FinCon community, which is where I got an opportunity to preview her new program called Write a Blog People Will Read.

Donna created Write a Blog People Will Read to help show people how to improve their writing in order to cultivate a bigger audience for their blogs.

“Currently the blogosphere is top-heavy with sites that are dull, wordy, badly organized or irrelevant,” Donna explains. “Why should someone take time out of his or her busy day to read this kind of thing? To be worth following, you’ve got to be worth reading.”

She allowed me to check out the first few lessons and I had so much fun reading through her advice and instructions. If you want to check it out for yourself, you can do so here. (Full disclosure: that is an affiliate link.)

Happy blogging!

Do I Have to Pay Taxes If I Earn Money on the Side?

YES.

The end.

No, just kidding. (It is April Fool’s Day, after all.) I promise there’s a whole informative post waiting here for you — and a more in-depth answer to the question, “do I have to pay taxes?”

Before we dive into this basic tax overview, I want you to get two important concepts straight right away: side income still counts as income, and even if you don’t make enough to owe taxes, technically the IRS still wants to know about it.

While you may not actually need to pay taxes, you should be prepared to report your income.

Here’s the second important concept: I am not an accountant, I am not a tax professional, and I am not a lawyer. (If you need a financial professional, get yourself over to XY Planning Network.)

My intention is to provide you with basic information that you need to know if you earn money on the side so you can feel confident about tax season and understand what the IRS expects from you.

I do not advise anyone here engage in any shady bookkeeping, and if you are unsure about something or are confused, please do not hesitate to take a specific concern to a tax professional.

Got it? Good. Let’s begin this basic tax overview for solopreneurs, side hustlers, and anyone making a few extra bucks on the side.

Do You Run a Hobby — or a Business?

First thing’s first for side income earners: are you going to be a hobby or a business? Your answer does matter, and personally, I think there’s a right answer here that you should choose. Here’s why.

The IRS makes a distinction between a money-making hobby and a money-making business. If you are for profit, you are a business to the IRS. And you’re all about making a profit, right? Of course!

Whatever you consider yourself, if you make money from your activities for at least three out of the last five years, the IRS will label you a business. That gives you some special hoops to jump through.

Let’s continue on with the assumption that you want to make decent chunk of change from whatever it is you do on the side. We’ll also say you want that income to be sustainable over a period of years.

Regardless of why the IRS says there’s a difference between a “hobby” and a real business, there’s another factor here to consider. It’s important to take yourself seriously! If you want to create a side or small business to continue earning money in a big or more professional way, you need to treat things that way from the start: as a business.

Having the right mindset will set you up nicely for success. If you take yourself seriously, as a real business, then other people will too.

One more important reason we’re assuming you consider yourself a business: if you don’t file your taxes that way, you’re limited on what kinds of deductions you can take. You can’t claim more than what you made if you’re filing like your side gig is a hobby that happens to make money, and that’s a big deal when you’re starting out.

If you’re a business, you can claim all your expenses and take the deductions you’re entitled to as a for-profit, money-makin’ entity on your tax return. Just want to consider your side gig as a hobby? No such luck, because you can’t claim more than you make if you declare your activities to be a hobby instead of a business.

Let’s look at an example to illustrate that point. If you paid $150 for hosting your website (to promote what you do), another $50 for your site design, and $100 for an educational course to help you grow your side hustle — but you only made about $75? If your side work is a hobby, you don’t get to deduct $300 worth of expenses. You get to deduct $75, and all the rest you get to pay the full taxable amount on.

As a business, however, you can deduct the full cost of all business expenses. This is a big deal once you start making a significant side income. Being able to report all your expenses helps keep your taxable income lower, which means a smaller tax bill and more money available to reinvest in your work.

Keep all these factors in mind when determining if you’re a “hobby” or a “business” for tax purposes. Don’t feel intimidated by the idea of calling yourself a business. Remember, you don’t need to do anything fancy to be a business if you don’t want to. You can simply be a sole proprietor. I am and I’m happy as a clam that way.

Do I Have to Pay Taxes?

“Do I have to pay taxes on [your money-making side gigs], even though I only made X amount?”

Again, the answer is probably YES. You have to pay taxes — and regardless of whether you owe or not, the IRS expects you to report all income (no matter how small).

This means keeping careful records is critical. You want to claim every deduction you qualify for and write off expenses where you can to ensure you keep your tax bill as low as possible.

So, just to drive this point home, here’s a little something from the IRS about taxable income:

While most people are aware they must include wages, salaries, interest, dividends, tips and commissions as income on their tax returns, many don’t realize that they must also report most other income, such as:

  • cash earned from side jobs,
  • barter exchanges of goods or services,
  • awards, prizes, contest winnings and
  • gambling proceeds.

What should this tell you? The IRS wants every source of money it can get. (Of course, right?)

Just about anything you make is taxable according to the IRS. It doesn’t necessarily mean you’ll owe money, but it does mean that you can’t say, “oh, I didn’t make enough for anyone to notice me. I’ll just throw this in my bank account and only worry about my W2 income when I file.”

Sorry Charlie, but you’re responsible for telling Uncle Sam what you made and how you made it. The best thing to do is to do your best to be accurate and honest when filing.

Logically, the next question solopreneurs and side hustlers ask is something along the lines of, “okay, I have to report my income and I may need to pay taxes… but how much do I need to pay in taxes?”

I’m so glad you asked.

Understanding What You Owe Come Tax Time

Here’s an excerpt from the IRS’ site on folks who are self-employed. If you “work for yourself” in some capacity, which does include work you do on the side to earn extra money, that means you!

As a self-employed individual, generally you are required to file an annual return and pay estimated tax quarterly.

Self-employed individuals generally must pay self-employment tax (SE tax) as well as income tax. SE tax is a Social Security and Medicare tax primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. In general, anytime the wording “self-employment tax” is used, it only refers to Social Security and Medicare taxes and not any other tax (like income tax).

You have to file an income tax return if your net earnings from self-employment were $400 or more. If your net earnings from self-employment were less than $400, you still have to file an income tax return if you meet any other filing requirement listed in the Form 1040 instructions.

This is why the answer to “do I have to pay taxes” is almost always yes. Even if you only work part-time for yourself and full-time as a salaried employee somewhere else, the side gig part of your income qualifies as self employment income.

Self employment tax is how the government makes sure it receives the social security and medicare taxes that are normally paid by an employee and an employer. Here’s the fun part: since you’re not an employee, you are your own boss and have your own business going on, you’re responsible for paying both the employee and the employer portions.

Self-employment tax must be paid whether or not you owe any federal income tax.

It’s hard to provide an exact answer on “how much.” That depends on a number of factors, including:

  • Your gross profit
  • Your expenses
  • Your deductions
  • Your state (for state income tax)

As a general rule, I immediately take 28% of my gross earnings and set that amount aside each month for taxes. I established that percentage after discussing my situation with a CPA, and if you’re making a significant amount from your side work I suggest you do the same.

Again, many of my friends at XY Planning Network hold CPA designations and specialize in serving entrepreneurs and freelancers.

I know hiring a pro can feel intimidating, but it’s the best investment I’ve made in my business. I know I don’t understand the tax code and how to ensure I’m following all the rules. And lacking knowledge can cost you far more than paying a professional to help keep you on the up and up.

In fact, I have to admit I screwed up my SEP IRA contributions for 2014! I contributed far too much and could face a stiff penalty from the IRS — but I’ve alerted my CPA and we’re working through the issue so that I can avoid getting into trouble. That’s the value of having someone who does this full-time and for a living on your side.

How to Handle Estimated Taxes

As a self-employed freelancer, consultant, or general hustler, if you’re making a good profit you’re more than likely going to pay estimated taxes.

Since you don’t have any taxes deducted from your side income, you need to lob a check over to the IRS every quarter. The due dates for estimated taxes are April 15, June 15, September 15 and January 15 (and generally there are exceptions or extensions for stuff like holidays).

If you don’t pay your estimated taxes in a timely fashion, you may owe an additional tax penalty. But before you panic, know that if you didn’t have any tax liability in the prior year, or if you don’t expect to earn at least $1,000 in side income this year, you may be able to avoid paying estimated taxes.

But, because this is all about learning new stuff, let’s assume you need to handle estimated taxes.

Form 1040-ES, Estimated Tax for Individuals is used to figure these taxes. You’ll use the worksheet found in Form 1040-ES to find out if you are required to file quarterly estimated tax.

The form also contains some handy blank vouchers you can use when you mail your estimated tax payments or you may make your payments using the Electronic Federal Tax Payment System.

A quick PS on this: Form 1040-ES can be scary. Here’s how I figured my own estimated tax payments when I switched to self-employment full-time last year:

  • Looked at my income from January through March
  • Multiplied that by 4 to get an estimated gross total for the year
  • Multiplied my total by .28 to get a guess of what I’d owe in taxes for the year
  • Divided that number by 4. That’s how much I should send off to the IRS each quarter

So as an example, let’s use a (nice, round) real number:

  • Let’s say my side income was $10,000 from January through March
  • I multiply that number by 4. I estimate I’ll make $40,0000 in side income for the year
  • I multiply $40,000 by .28, because I want to set aside 28% of gross earnings for taxes. I estimate I’ll owe $11,200 in taxes for the year
  • I divide $11,200 by 4. I will send off $2,800 as my estimated tax payment each quarter.

Note the keywords here: ESTIMATE. GUESS. This isn’t a scientific process but it’s straightforward and easy and helps me keep the IRS happy. I may owe when I file my taxes, or I may have overpaid. It all depends on what my actual gross income (and expenses) work out to be.

Additional Resources for Your Financial and Tax Needs

For all its annoying faults, the IRS does try to provide lots of information on their site. If I didn’t cover something you feel you need to know here, check out IRS.gov.

My friend Carrie Smith of Careful Cents also has a number of resources on finances and taxes for solopreneurs and freelancers. You can get a tax checklist freebie when you sign up for her newsletter, and she created a digital course called Solopreneur Finance: Managing Money on Your Own Terms

Finally, to make this blog post a little more portable for you, I’ve created a downloadable ebook that you can grab when you hop on to receive my monthly newsletter. The Tax Starter Kit for Side Income Earners covers everything we detailed here — and also includes notes on lowering your tax bill and managing your business finances beyond tax season.

TaxStarterFreebie

« Older posts

© 2015 Kali Hawlk

Theme by Anders NorenUp ↑