Walkaway Pricing: Earning Enough to Enjoy Life
Part four: Adding up what it takes to move out of survival mode
This is part four of my guide to working out the minimum you should charge as a freelancer or content creator. Please see my introductory post for more information and links to others in this series.
Although this series of posts is about setting your minimum rates as a freelancer or content creator, we can definitely think bigger. The previous two guides have focused on your essential living expenses and the cost of doing business. Here's where we get to move out of survival mode. We're going to figure out how much you need to earn to enjoy life more, save for the future, and have some disposable income.
In a future guide, we'll add this amount in to figure out your ideal rates—where you can set your pricing to build up some long-term stability. But, before we get there, we need to understand how much that lifestyle is going to cost. That's what this post is about: Looking at different areas for you and your family and seeing how much you need to earn to reach that point.
We're not looking at anything too extravagant or lavish here. No matter where you set your rates, they're probably not going to get you a penthouse apartment or an Italian sports car. But, wouldn't it be nice to earn enough to build long-term security, spend money on your hobbies, and get the most out of each day?
To do that, we're going to add up the costs for the life you want to lead.
Some financial notes before we begin
These optional costs will change and increase over time. I recommend re-calculating them every six months to a year, and seeing what that does to the rates you charge.
If you need advice on freeing up your income, paying down debt, optimizing your budget, or other financial help, I recommend the Personal Finance Wiki and subreddit. The wiki provides a ton of helpful, practical advice and if you still need answers, you can post to the subreddit.
These optional costs are on top of your essential living costs and your business costs. If you've not figured those out yet, I recommend going back to those previous guides and going through that process. This guide won't make much sense without them! Be careful not to double-count something that you've already captured previously.
When you're going through each of the sections below, think about how much you'd ideally like to spend on each area. Everyone has different ideas for the life they want to live—and how much it will cost to do that. As you're assigning amounts, remember that we'll be using these to figure out your eventual content creation rates. It's important to be realistic about how much you really need, so you can set your prices accordingly.
None of the sections below will contain every single optional cost you have, so see them as starting points. I've used US Dollar amounts, assumptions, and examples throughout these guides. That's because I live in the US, and understand that financial system the best. Don't let the $USD put you off. These guides should work fine in your own currency, just substitute in as required.
I know there's a lot here! It does take a while to figure out your expenses, but it will be worth it. You'll be more confident of your spending, and you'll be able to set content creation rates to meet all of your needs.
Let's get into it.
How to figure out your optional costs to calculate your content rates
Here's how to use this guide:
Go through all of the sections below and figure out your ideal monthly spending for each.
If you're already spending on optional areas, then look back over your bank and card statements to confirm the amounts. If the amounts vary significantly from month to month, you'll want to average over a longer period.
Write down the monthly amount you do or want to spend on each area.
Once you've covered all of these areas, add everything together to get the total amount you want to spend on optional expenses each month.
We'll use these amounts in a future guide to figure out your content creation rates.
Why your optional costs matter for your content creation rates
Once we have your optional costs, we’re going to add them to two other areas: your essential living costs and your business costs. This will help us understand your total spending over a month.
Then, we’ll divide that amount by the number of hours you can bill in a month to figure out where your rates should start. We’ll complete those steps in a future guide. You’ll be glad to hear that this is the last time you’ll need to look through bank statements for a little while!
Mortgage and rental
Saving for a downpayment: Money you're saving towards buying a home
Additional mortgage payments: Additional payments on top of your minimums that you can use to reduce your housing debts
Credit cards and loans
Additional credit card repayments: Payments over and above your minimum to reduce your credit card debt
Additional student loan repayment: Payments over and above your minimum to reduce your student loans
Additional personal loan repayments: Payments over and above your minimum to reduce any other debts and loans
Other debt repayments: Any other additional payments you're making to reduce what you owe
Savings and investments
Emergency fund: Money you're putting into an emergency fund to cover short-term financial emergencies and unforeseen costs
Other cash savings: Other money you're putting into a savings account or other low-risk area
Retirement contributions: Money that you put towards retirement, either through a business or personal retirement account
Other investments: Other money that your invest for the future
Other financial spending
Non-essential insurance: Premiums for extra insurance
Charitable donations: Money that you give to good causes
Other financial spending: Other money you're using to prepare for the future or protect yourself and your family
Food and groceries
Extra food shopping: Money you spend on additional food not covered by your essential grocery costs
Treats and snacks: Additional spending when you treat yourself or others
Takeout and restaurants: Food to-go or dining out
Household
Additional household shopping: Money you spend on household items in addition to the essentials
Appliances: Upgrading, replacing, and repairing non-essential appliances
Furniture and furnishings: Upgrading, replacing, and repairing non-essential furniture and furnishings
Home improvement: Money you spend on non-essential household projects in your home, yard, and elsewhere on your property
Household services: Costs for gardeners, cleaners, etc.
Other household spending: Any other non-essential money you spend to maintain and improve your home
Personal care
Optional clothes and shoes: Money you spend on apparel and shoes, in addition to the essentials
Exercise, gym, and sports: Costs to go to the gym, play sports, train, or otherwise improve your physical condition
Health, appearance, and beauty: Expenses for beauty products and services, non-essential health improvement, complementary therapies, and similar
Transport
Additional vehicle purchase or rental: Additional payments above the essential for the purchase, rental, or leasing of vehicles and accessories
Vehicle maintenance: Non-essential costs for repairs and maintenance
Taxi and public transport fares: Non-essential fares and tickets for taxis, buses, trains, and other public transport
Other transport costs: Additional non-essential spending on vehicles and transport
Technology
Be careful that you haven't captured these costs under either essential or business expenses.
Phones: Purchase, replacement, or upgrade of non-essential phones
Desktops, laptops, tablets, accessories: Purchase, replacement, or upgrade of non-essential computer hardware
Software: Purchase of or subscriptions to computer software and apps
Electronic devices and gadgets: Purchase of non-essential devices including streaming devices, TV, entertainment, headphones, etc.
Childcare and dependents
Optional childcare: Additional nursery, nanny, daycare, babysitting, or other childcare costs
Optional children's activities and clubs: Clubs and other activities for your children such as after school, sports clubs, camps etc.
Optional children's travel: Travel costs for your children; buses, trains, etc.
Optional toys and treats: Toys, gifts, treats, and other products or services for your children
Additional children's allowance and pocket money: Regular money for your children
Additional support for other dependents: Any optional money that you pay out to support other relatives or dependents
School, college, and education
Optional school, college, or university fees: Additional one-off or repeat costs for the education of your children
Optional school trips: Additional school trips, travel, vacations, and days out
Extra support for student children: Additional money that you pay to support your children while they're away from home
School, college, or university Fund: Extra saving for a fund to send your children to school, college, or university
Additional adult education and training: Non-essential personal classes or courses that you're taking
Pets
Extra pet food and treats: Additional food or treats for your pet
Pet insurance: Extra insurance to cover pet veterinary care
Non-essential pet toys, accessories, and services: Toys, accessories, or other pet costs
Additional veterinary care: Additional vet fees not covered by pet insurance
Special occasions
Birthdays: Extra costs of gifts, parties, and other expenditure for the birthdays of family and friends
Christmas / Holiday Season: Extra costs of gifts, parties, and other expenditure at Christmas or during the holidays
Mother's , Father's, Valentine's Day, and Anniversaries: Additional costs of gifts, parties, and other expenditures for annual "special occasion" days
Entertainment (optional only)
Many of your entertainment expenses will be on top of your essential needs. Be careful not to record costs here that you've already covered under your basic costs of living.
Movies and cinema trips: Trips to see films and movies
Theater trips: Trips to see performances at the theater and other live events
Music, gig, and concert trips: Gig, concert, and music tickets to see live bands, festivals, etc.
Film, movie, and music purchase or rental: One-off rental and purchase costs for films, movies, and music
Streaming costs: Ongoing subscriptions for streaming services
Book, newspaper, and magazine costs: One-off and subscription costs for magazines, newspapers, and books.
Consoles: Console hardware and accessories
Games software: Video games, console, and PC entertainment and game software
Leisure (optional only)
Many leisure expenses will be on top of your essential needs. Be careful not to record costs here that you've already covered under your basic costs of living.
Vacations: Costs for going on vacation, including travel insurance or other expenses
Social life: Expenses relating to socializing, meeting with friends, etc.
Alcohol and tobacco: Money that you spend on wine, beer, spirits, cigarettes, etc.
Leisure shopping: Shopping that you and your family do for fun and leisure
Days out, shirt breaks, and events: Money you spend on events, days out, sports, etc.
Hobbies and pastimes: Costs of your various hobbies, interests, or pastimes
Activities and clubs: Any non-essential activities and clubs that you belong to that you haven't already covered
Other non-essential costs
Once you've been through each of the sections above, take another look through your bank and credit card statements. See if there are any other optional costs on there that you've not captured, and add them into the relevant section or a new section.
Bringing it all together
Now that you have average monthly costs for all of your optional and discretionary spending, write that figure down. We'll be using this number later in these guides. This will help you work out how much more you need to earn to boost your quality of life.
Thanks for sticking with me through this guide, I know it's been a long one. And I know it's a lot of effort. That's it for this guide. Next time, we'll explore how much of your time you can bill as a freelancer or content creator.
Please note that I am not a qualified professional and I do not provide tax, legal, accounting, or similar advice. These guides are provided for informational purposes only. Always consult with a qualified professional on your unique circumstances.