Tag Archives: Save Money

Podcast Episode 48: How to prevent your freelance business from wasting money

It’s not unusual for a freelance writing business to go through a dry patch. Finding work is difficult, regular clients go quiet, and you are left short of cash. In this podcast episode, we talk about how to avoid wasting money when you are a self-employed writer, and look at ways to save some cash.

Show Notes

There are several ways to make sure that you don’t miss out on A Little Bird Told Me.

Subscribe via RSS

Subscribe via iTunes

Find us on Stitcher Smart Radio

And finally, please ‘like’ us on Facebook to be the first to hear our news and to talk with us about what you hear on the podcast!

Transcript

LH: Hello and welcome to Episode 48 of A Little Bird Told Me. My co-host Pippa and I are two freelance writers on a mission: we’re here to help you avoid the pitfalls that plague our profession and become the most wonderful wordsmiths you can be.

Freelancing is tough, and it can be a really lonely old world out there, so our hope is that this podcast will be a little ray of sunshine in a world where you can find yourself  working from bed, eating cornflakes from the packet for lunch and not seeing another living soul for four years straight.

To make sure that you don’t miss this lovely podcast, we’ve made it super easy to subscribe – you can tune in via iTunes, RSS feed, Stitcher smart radio or Podomatic.

No matter how you want to listen, make sure you stop by our Podomatic homepage at alittlebirdtoldme.podomatic.com because there’s a whole range of links and resources on there to accompany the episodes. Blog posts, transcripts, funny videos and websites – they’re all there. You’ll also find links to both my and Pip’s social media profiles and websites so you can come and chat to us. I’m Lorrie Hartshorn….

PW: And I’m Philippa Willitts and we want to start by apologising for the lack of podcast last week. Once in a while, we just can’t fit it in – we both sometimes have a week with an incredibly busy schedule and last week was one of those. So we hope you didn’t miss us too much – actually, we hope you did! – but there’s always our archives if you’re missing us too much.

LH: Yes, tune into one of our older episodes and reminisce about the time we were with you. I think we’ve missed two episodes so far out of almost 50.

PW: Yeah, I think we’re doing pretty well. The thing with the podcast is that it takes up a surprising amount of time with the planning, recording, editing, transcribing and all that stuff, so it’s quite an investment of time, so sometimes unfortunately we just can’t. But we’re back now, and I’m sure you’re incredibly happy.

Now, today, what we’re going to look at is something on the business side of freelance writing: how to prevent your freelance business from wasting money. IN many ways, there aren’t that many outgoings for a freelance writer – you might think pens, paper, broadband – but the expenses can actually add up, so we want to make sure you’re not wasting money and that you’re not missing out on opportunities to save. But we’re also going to look at areas where you shouldn’t scrimp and where you do need to spend a little bit.

LH: I think it’s a really important topic. As a freelancer, your business and personal spends can be intertwined – you are your business.

PW: Yes, if I buy certain magazines, they’re business expenses because they’re research for magazine pitches. But, I also quite enjoy reading them.

LH: Yeah, I mean, as I say, you are your business. There’s no external organisation, so you have to look at saving money across the board. A good thing about being a freelance writer, as Pip’s just pointed out, is that your overheads can actually be quite minimal if you’re savings savvy. You’re unlikely to have separate premises to maintain, your travel costs may well be quite low because you’re not commuting every morning and you probably don’t have employees and great swathes of equipment to look after. So it can be quite a slim-line business to have if you’re sensible about it.

Look after the pennies

Look after the pennies (Photo credit: Mark J P)

Now, what we’re going to do is look at a variety of ways to save money, including things you can get for free – things you don’t need to pay for or can do without; things that you do have to pay for but can get cheaper; and false economies – things you think you’re making savings on but you’re not.

PW: Definitely. Now, the first thing we’re going to look at is software. There are quite a few software options for freelancers – the most obvious one is Microsoft Office, which a lot of freelancers think they couldn’t do without. But actually, if you buy the licence to use those suites, it can really add up. Plus, as software, it’s quite bloated and resource-heavy on your computer. And there are actually some really good alternatives that are completely free – one of those is something that Lorrie and I use several times a week: Google Drive. You can use it for word processing documents, spreadsheets, you can do research quizzes and get people to fill it in; you can make forms and do drawings, and store it all in the cloud so you’re not reliant on your computer.

The other main option that I have always sworn by until I very recently had to make the switch to Windows 8 is Open Office – it’s a very good suite of software and a very good Microsoft Office equivalent. Unfortunately, at this stage, Open Office isn’t working well on Windows 8, although I’m sure in time that it will do. At this stage, though, Windows 8 is a new operating system, and lots of software isn’t compatible with it. For the first time in years, I’m using Microsoft Office most of the time, and I do miss Open Office – it’s just that it was full of bugs on Windows 8.

But yes, in general, if you’re not using Windows 8, Open Office is a really good option: it does most of what Microsoft Office can do; it can open all the Microsoft file types and it takes up fewer resources on your machine.

LH: And it does mirror Microsoft Office – if you know how to use that, you’ll know how to use Open Office. There are a few things you can’t do, I think – tracked changes?

PW: Open Office has its own version of Track Changes, but it’s not that compatible with Microsoft Word. So whereas most things you could do in Open Office and someone else could open it in Word and never know you hadn’t used Word yourself, Tracked Changes doesn’t transfer that well, so if I’m proof-reading, I tend to use Microsoft Word.

LH: Now, the next thing we’re going to look at is training. With the costs of education sky-rocketing, it’s important to keep you training up but it could bankrupt you if you tried to do it with paid-for education.

PW: And even out of the education system, I see places that run business training events. You might go to a morning of How To Use Twitter and a three-hour session is charged at £240. That’s a lot of money when there are more than enough free equivalents on offer.

LH: Yes, in our planning document for this podcast, we have a whole range of things to talk about – ways to save you money – so we are going to zoom through things a little bit but we’ll add everything we talk about to the show notes. If you listen and find that there’s something that doesn’t end up there, come and have a chat with us and ask us.

Now, some of my favourite resources for writing-related training are OpenLearn by the Open University. It’s a range of free resources, a variety of subjects. Some of it’s not that technical but I like their fiction and poetry stuff – I do a lot of fiction editing so it’s handy for me. Alison.com is another one Pip and I use.

PW: It’s varied but when it’s good, it’s good.

LH: And when it’s bad, it’s horrible. But they’ve just redone the interface I think, it’s more user-friendly than it was, so if you’ve been on there six months ago, have another look because they have a wide range of stuff on there.

PW: Yes, I’ve done business and marketing stuff on there, too. And another really good resource is actually YouTube.

LH: Ohhh, really? Haha, I say “Really?” like I’ve never heard of YouTube!

PW: Yes, it’s a video sharing website, haha. Lots of universities are putting their lectures up on YouTube for free. And also, if you’re looking to find out how to do a very specific thing, it can be a total lifesaver. I was trying to do something in a spreadsheet but I couldn’t do these calculations. I read every guide on the net and couldn’t do it at all. I looked on YouTube, and there was a guy who, in 45 seconds, demonstrated how to do exactly what I needed to do. And there we were; it was fixed. You get everything from a 45-second specific problem fix to the 16-hour Journalism Ethics course that I’m doing from UCLA. So while you think of kittens and dancing dogs, it’s actually the world’s second largest search engine and it’s full of information that you might need.

LH: It’s funny – I’ve never really thought about it as a training resource. I’ve used it once but I’ll go and have another look.

PW: Yes, it’s always grown at a rapid pace, but the good quality stuff is expanding quickly now.

LH: So yes, brilliant – YouTube. In terms of more written material, although they aren’t strictly training resources, “How To” websites can actually be really helpful. Suite101 is one of my favourites; it’s a knowledge sharing website. WikiHow looks a bit no frills, but the information on there is very good and tends to be, as how we mentioned in our episode in writing for beginners and experts a few weeks ago, very well set up – and usually bullet pointed so it’s easy to follow.

PW: Quora is good too. It’s a question and answer site but what makes it different from things like Yahoo Answers is that, somehow, it’s attracted the best so people who ask a question will get really detailed responses from people who are high up in their field, and you can vote answers up and down. You can also do a search to find out if someone’s already asked what you want to know – if they haven’t, you can ask. So that’s good for one-off bits of advice, but also, with a bit of creativity, you could also compile your own training document by going through a particular category in Quora. They’re so full of top information.

LH: Fabulous. About.com is another question and answer site and it’s full of good information. Some of it’s not so well written, but you know.

PW: Yes, there are a million different sections, some are well written, some not so much, but if you get a good one it can be really spot on.

LH: Yes, so before you go looking for training courses, check these things out. Training courses tend to be advertised online and they can be a bit of an impulse buy, can’t they? You’ll be browsing online and suddenly panic and go, “Oh my God, I don’t know how to do SEO writing!”

PW: and then you find an 8,000 word landing page telling you how, if you just buy this eBook, everything you write in future will be perfect.

LH: Don’t fall for it and go for the impulse buy.

PW: Or, at least try the free options first – it might be that you decide you want to try something a bit more formal afterward, and that’s fine. But try the free stuff first.

LH: Definitely, as we’ve said, Pip enjoys listening to podcasts, watching YouTube videos. Then there’s WikiHow, About.com, Suite101, Quora, Alison.com, Open Learn – there are so many resources out there so have a look if you want to save some money.

PW: Another area to save money is when dealing with your money. Looking at how you manage your finance, have a look at your bank account. Do you have to pay £12 a month to get some weird deal that doesn’t apply to you anyway? Do you get free car insurance but not even have a car? Do you have an account that pays interest? Are you paying too much or getting a poor interest rate? Do you have a savings account so you can at least get better interest on part of your money? Do you have a weird account where you have to pay for Direct Debits, or something like that that looks like a good deal but you end up paying a load of random fees? There’s a lot to think about in terms of finances. Do you want a separate business account?

LH: Have you got an ISA? They’re a good way to make savings. As a freelancer, you pay tax at the end of every year

PW: And you don’t pay tax on an ISA!

LH: So make sure you can do it. If you have a registered or limited company, I’m not sure if you can put business finances into an ISA

PW: That’s something to check with your bank or an accountant

LH: But if it’s from your personal account, you can put as much money as you want into an ISA until you reach the limit. So you can merrily fill your ISA and all that money is tax exempt. Which is nice!

In terms of other big financial commitments, when you pay for things online, such as your utilities – gas, electric, water – it can be surprising (and more than a little annoying) when you get to the final stages of an online payment and find that a £3 “service charge” or “card fee” has been whacked on to the overall price. Whatever, it’s annoying. The reason companies do this – they might say it’s admin or processing fees – is because they know you’ll pay. It’s so annoying to get to the end of a transaction and then abort it.

For one-off purchases, you might just think, “Ehn, who cares?” And, sometimes, there’s no way to avoid these kinds of fees. But, for regular things like utility bills, there’s usually a way to make a payment via your bank, whether as a one-off payment or a Direct Debit – still online, just not via the website of the company you’re buying from. And OK, you might not think that £3 a month is a lot, but would you hand over £36 in one go just for the sake of not logging into your online bank?

PW: Absolutely. And there’s also the danger that you can look into every account and choose the best interest rates and everything, and sign up for the gas account but then you’re so disorganised that you don’t pay your bills on time, and you end up paying “late fees” of something ridiculous like £12 a day on top of your bills. As well as setting things up well, you have to maintain accounts in order to not risk all the money you think you’ve saved.

LH: I think that applies to things like meter reading as well. A lot of companies will take an estimate if you don’t give them a meter reading, and charge you for what they think you’ve used. So take two minutes, write down a number and type it in, it’s easy. I was scared at first – I don’t like technical things; I was thinking, “I don’t know how to read meters!” but it’s just a number.

PW: It’s literally the only number on the thing. So you’re alright. Look for the number, and it’s that.

LH: Yes, and you type that in and it’s almost invariably cheaper. Because the companies rely on customers’ laziness and poor organisation to scrap a few extra pounds off you every month.

Look after the pennies and the pounds will loo...

Look after the pennies and the pounds will look after themselves (Photo credit: Mukumbura)

PW: I’ve noticed a few utility companies offering discounts if I go paper-free. If I just get statements online, I save something nominal like a pound a month. But it’s less junk through the door and it’s a saving.

LH: And you can print off anything you get online – all your statements and details. Banks have to make this stuff available, so even if you don’t get it posted to you, you can print off a PDF at any time, so it’s worth going for it.

PW: Another thing to bear in mind, in terms of finances specifically, is to try to have some savings, even if you’ve had regular work because invoices can be paid late, work might get low, so if you can start out with at least three months’ living expenses, then you don’t have to hit the ground running. Once you’re more established, I’d try to have at least one month’s savings at any given time – you want this to be accessible, and not in one of those savings accounts where you have to request money 28 days in advance.

LH: Haha, while you starve away at home!

PW: Exactly – that’s good for long-term savings but we’re talking about back-up savings. You can still compare accounts and get one with a good interest rate. This can not only cushion the blow of late payments and a lack of work, it will also help you to stress a lot less at these times. There will always be up and down times in freelancing, so it’s boring, but when things are going well and the money is rolling in, do stick some in a separate bank account for the more quiet times.

And another thing to consider is credit unions. These are usually community based and they’re a way, predominantly, for poorer people to get access to financial services that they otherwise wouldn’t be able to afford. That’s how they started out – basically, you can pay into your credit union account and, after a certain amount of time, you can request a loan. We’re not talking thousands of pounds, but it’s for immediate difficulties and you pay it back gradually. The original idea was to promote financial accessibility. These days, although that’s still the case, more and more people are signing up because they’re an ethical way to save. They’re not investing in the arms trade like the big banks do, they help people to be included but also they’re a good way for anyone to save and for anyone to access small loans in the event they need one. So, most towns and cities have credit unions, so I’d really recommend doing a search for a credit union near you and signing up.

LH: What a brilliant idea. Brilliant, brilliant idea. A lot of freelancers that I’ve spoken to, particularly new ones, have gone freelance not out of desire to be a freelancer but out of necessity. They may have been made redundant or had children and be finding it hard to get back to work. Often, there’s that slight feeling of “I’m doing this because I need some money” so supportive finance options like credit unions are perfect. You don’t need judgement when you’re having difficulties; you want an ethical supportive option that will give you reliable support and a credit union is excellent for that.

PW: I think the best approach – and this is what I’m doing – is to just set up a credit union account, set up a standing order, say £10 a month or whatever you can afford – and just let it take care of itself. And then you have a nice little pot of money that you haven’t accessed and, in the event you need a loan, you don’t have to start setting up things with massive interest rates. Credit union loans are very reasonably priced and they’re based on the savings that you have already.

LH: I think it’s important to point out at this point that this is a far healthier, far less dangerous option than pay-day loans.

PW: Oh, so much. In the UK at the moment, pay-day loans are rightly getting a lot of bad press. I know they exist all over the world.

LH: They can be tempting, can’t they? That’s why they do so well.

PW: Yes, like loan sharks do. When people are desperate, they do things they wouldn’t have done otherwise. So if you have access to a safe way to borrow a small amount of money, rather than borrowing a small amount of money on a 5,000% interest rate, it’s the only way to go, really. And especially seeing as banks are far less likely to lend money in the wake of the financial crisis, credit unions being so open, and being community based, are a great option.

LH: It’s prevention rather than cure again – don’t wait until you’re desperate.

PW: And even if you don’t need a loan, if you pay in £10 a month, you’ve got £120 for Christmas presents at the end of the year. However you end up using it, it’s great.

LH: Another great way to save money with your business is to have a look at what you’re paying for travel costs. If you book your train tickets on the day, you’re likely to pay far, far more than you would if you bought them in advance.

PW: Definitely, I went to London a few weeks ago and I booked my tickets about a month in advance. And even at that stage, I was on was on one of these comparison sites – looking at the options, I managed to pay just £12 per journey but there were other journeys that were just a bit different that cost £50 each. If you turn up on the day, you can pay in the hundreds.

LH: Yes, Manchester to London at peak times can be over £350 for a two-hour journey. £12 is the cheapest I’ve ever heard.

PW: I know, I was gobsmacked. It was nestled in the middle of all these £42, £36, £52 prices, and there was just one option at £12. So I thought, yes, there we go!

LH: I’ve saved my husband money on things like this, actually. If you’re going on a trip with more than a couple of stops, it’s sometimes worth having a look if it’s much cheaper to buy singles from one stop to the next.

PW: Yes, I know to London and back from here in Sheffield, it’s cheaper to get two singles, which goes against what you’d expect. So you get used to returns being cheaper, but it’s not always the case.

LH: Definitely, and it’s worth having a fiddle around with these sites to see if you can get a cheaper option.

PW: Yes, you can go an hour earlier, change at a different place, it can really be worth it.

LH: Yes, if you’re not pushed for time, go for a slightly slower train. I enjoy train journeys – I pop my headphones on and enjoy the break away from my laptop.

PW: Yeah, you can find some lovely journeys.

LH: And if you have a look at your journey – say, Manchester to London (although it’s not a great example because it’s mostly a direct journey) – and see if Manchester to X, then X to London is cheaper, or Manchester to Y and then Y to London is cheaper. If one of the routes is less popular, you can sometimes get it cheaper.

PW: There’s a website that’s an incredible resource. It’s UK centric, without a doubt, but I’m sure some of the advice will apply internationally. If there is a way to save money on something, it’s on that website. There’s great content in the main website, and also the most extensive forum you can imagine. It’s so full of great information, the site does really well in search engine results, partly because there’s so much good information on it and partly because so many people link to it.

It was started by a guy who previously worked for a credit card company. He got sick of seeing customers being ripped off so he came out of the industry and turned his knowledge to teaching people how to avoid excessive costs. The website is now huge and it’s a brilliant resource. It’s Lorrie talking about doing train journeys like that that reminded me. My brother was telling me about car insurance, actually – if you change your parameters slightly, you can save a lot of money.

LH: And you can just phone the company sometimes and say you’re not happy with the price – I’ve done it before. It’s often that easy.

PW: I phoned up my home and contents insurer when my quote came through and asked them, “Is that your best price?” and they cut it by two thirds. And it was that simple.

LH: Hahaha, that’s brilliant. My in-laws are Pakistani and my best mate is Indian, and anyone who knows people from that part of the world will know that they can drive an extremely hard bargain. My father in law got a notice from his water company telling him that his water bill would be £80 a month, so he phoned them up and said, “Well, I’ve only got £40.” So now he just pays £40 a month! Which is amazing. The company phones occasionally and threatens to increase the price, but he sticks to his guns – they’re only increasing the price because they’ve increased other houses in that area, it’s not because he’s using more water.

This is the thing: all you have to say, often, is “I’m not paying that; I’ve found a better provider, they’re offering me a better deal; I can’t pay that amount; haven’t you got a better offer? Isn’t there any customer loyalty? I’ve been with you five years…” Often just a little nudge will drive costs down quickly.

PW: One of the main things I’ve learnt from Martin Lewis at Money Saving Expert, being a loyal customer won’t get you any rewards. They’re busy rewarding new customers because they’re trying to suck them in. So it’s often worth changing providers, or at least threatening to change providers – it’s a bit of work, but it’s worth it. Putting up with every increase does you no favours at all.

LH: A lot of companies will have a retentions department. If you say on the phone, “I’m going to go somewhere else for a better deal; I’ve seen the deals you’re offering new people; why aren’t I getting those deals?” and they’ll usually put you through to the retentions department.

PW: It really annoys me, actually. I left my former broadband supplier because they had a limit on how much internet you could use. For the first 12 months, it was fine – I got nowhere near the limit, then suddenly, every month I was going over the limit and being charged extra. I didn’t know what I was doing that was using up the bandwidth; neither did they. On top of that, they were throttling certain types of traffic, which was really annoying as well. In the end, I was so annoyed at being charged extra, I did loads of research and found a better provider who could offer me better speeds at a lower rate.

So I rang my ISP to cancel and, at that point…bear in mind that I’d phoned them to ask if I could change to a subscription without a limit and they’d said that wasn’t possible; didn’t exist, and then when I finally called to cancel, they said, “well, we could offer you an unlimited deal for £4 extra a month?” and I said it was too late. If they’d offered me that last time I’d phoned, I wouldn’t have cancelled, but they didn’t, so I was going.

LH: I don’t want it any more – I’m going! It’s ridiculous – I think most companies are recognising now that the first nudge from a customer is the point at which you cave and offer a better deal – most people don’t know they can push for a cheaper deal so when someone phones, it’s time to cave and offer something more.

PW: Yep. Exactly. And so it really does annoy me that you get more the more you threaten to leave. People who don’t want to make a fuss end up losing out. And it’s frustrating, because there was no need for me to have all those extra charges. It was something like £10 per every extra 5GB, and that goes quickly. So it was ridiculous.

LH: One final trick we have for you when it comes to saving money when you’re forking out money is when you’re booking a flight. Now, not everyone jets about all over the world for business but everyone needs a holiday. And if you’re a freelancer, you are your business, we totally think this counts.

So, when you’re browsing a site for flights, you can spot one and think, “OK, that works.” You browse a bit more then, in the meantime, you find that the prices have sky-rocketed, and you think, “Damn, I’ve missed a deal.” You haven’t. This is what flight companies do: using cookies, they track you around the site and then increase the prices of the flights you want to book. Now, the way to avoid this is to browse the site, note down the details of the flight you want to book, and the provider. Click out of your browser window, and either go and clear your cache (your internet history) or go to private browsing. Chrome has it, Firefox has got it – not sure about Internet Explorer. So you go back to the website, click straight through to the flight you want and you’ll usually find that the price is back to the original one.

PW: That. Is. Ingenious.

LH: Isn’t it? It’s fab. It can save you hundreds of pounds at a time. When you’re off on holiday and you need a much-needed break, you don’t want to pay £500 for your flight and have £100 left over for spending money for the two days. If you can get the flights for £300 and keep £300 for spending, that’s going to make a huge difference.

PW: Even if you’re travelling to a conference or something, you still want to be as economical as you can.

LH: Absolutely – if you think about it, changing (or not changing) a browser window can literally cost you hundreds of pounds at a time.

PW: It’s a no brainer, isn’t it?

LH: Definitely. Just give it a go next time and prepare to be outraged!

PW: So those are some good tips for those expenses that you can’t avoid. And as we touched on before, there can be issues. You can look for the best deal and find the best thing but then completely let yourself down by forgetting to pay on time. So actually staying organising can not just help you work well, it can have a really good effect on your finances.

LH: I was devastated when I learnt that because naturally, I’m really badly organised. If I didn’t have any help with it – and I’ll talk about the kind of help I have – I’d have problems keeping track on the bigger picture. When I’m working on something, I get my nose so far into the project, that things like admin, housekeeping, library fees, invoices, overdraft deadlines…they could float away and I wouldn’t notice.

Going back to chasing up on invoices, it can really add up. If you’re waiting for say, two, four, eight weeks and you don’t chase up someone who’s not paid, your money is sitting in their account.

PW: Yes, a lot of people are happy to send an invoice and then forget to check whether it’s been paid. And then you can lose track and get confused. If you get to the point where you don’t understand what’s been paid and what hasn’t, you might well not chase up an invoice ever.

LH: Yes, and you’ll let them get away with it – and they might not even know they’re getting away with it – there’s often a disconnect between the marketing department in a company, who you’ll probably be dealing with, and the accounts department.

So yes, as a naturally disorganised person, if I wasn’t careful, this kind of problem could cost me a lot over the course of a year. What I do to combat this, and things have improved so much, is that I rely heavily on both my paper diary and Google Calendar. Some people find they don’t need both – especially now you can synch your Google calendar with your phone.

PW: I always use both, too.

LH: I think we’re old school. We’re cool that way.

PW: Haha. That’s old skool with a ‘k’, listeners.

LH: Or old s-cool!  Now, I use my paper diary for things that vary from week to week, so if I’m meeting someone for coffee or if I need to go and see a client somewhere. Things like that. And, for Google calendar, I use it for regular commitments and also, going back to what you said about invoices, Pip, when I send an invoice to a client, I immediately mark on the due date “Check Payment”. Or, a week after, because I don’t like to chase immediately.

PW: Also, if I get a long-term deadline, I might pop in some reminders like, “Two weeks until you submit X” or what have you. I also have an add-on within Google Chrome – well, I have a few, actually. One means that my Google Calendar reminders actually pop up on my screen – and you can set when in advance you want that to happen, whether that’s five minutes or a day, whenever. The other add-on that’s handy is that you can get an extra option to add an email to Google Calendar. So if I get an email about an event, I can just add that to Google Calendar with a couple of clicks. There’s another one, actually – it’s all coming back to me now! – that lets me add Facebook events to my Google calendar.

LH: That’s brilliant. It’s so easy to add things to your calendar, now, isn’t it? I sometimes go to add something to my calendar and find it’s already in there!

Same goes for library fees, overdue fees, late fees, stick a reminder in for the day before.

PW: And stick a pop-up in that you have to click to get rid of. We’re so used to getting an email and being able to ignore it, so if you have to actively click to make it go away, it’s more likely to go into your head.

LH: Yeah, like I say, that’s like me and library fees. Our local library has a three-week loan period and I get out the maximum eight books every time because editing novels is part of my job. Now, I can’t read eight novels in three weeks and do all my other work, but I don’t necessarily want to give back the books after three weeks. So I set a reminder for the day before the books are due for return. Then, I just go to the library website, click ‘renew all’ and wait for another three weeks. And I don’t have to pay anything.

PW: For some reason, the libraries in Sheffield have stopped charging for overdue books and I wish they hadn’t because I get a bit lax now. And so while I can see why they’ve done it but in practice, even I wish I’d be charged sometimes. And also, libraries here – and it sounds like the case in Manchester – are making an effort to make things easy. You can renew online. You can return books by just scanning them in, so they make it easy to return things, so there are fewer and fewer excuses for being late.

LH: Going back to our original point, after our local library diversion, you could be late with eight books for a week and end up paying £4 a week. Imagine that you do that every month – that’s £48 just for not taking your books back or even clicking on the website. You can even renew when you’re already late to stop the charges increasing. Generally, with anything that’s overdue, the sooner you deal with things, the better.

PW: Yes, don’t get all head-in-the-sand-y! Things only get worse over time. Deal with it now. If you’ve missed a payment to the gas company, phone them.

LH: Yes – likewise, keep an eye on your direct debits, this is another point we want to make. If there’s money leaving your account every month for things you don’t use – Netflix, gym membership, a postal book club, a magazine you don’t read anymore…whatever it is, make sure you get your money’s worth, or downgrade/cancel as appropriate and as soon as possible.

PW: I was guilty of this until recently with my landline phone. I had a super deal where I could get free calls and all this stuff, but I never used my phone. I keep my landline because people call me but I don’t use it – I communicate mostly online or by text. So I rang them up and I’d signed up for a period of time and there were about six months left. So I said, “I understand that there’ll be a cancellation fee if I cancel, what will it be?” and she looked it up and it was one extra month. So I cancelled and I’m saving on five months of unused service. And I’m paying considerably less – the only reason I was paying more is that I did use my landline a lot more in the past but I got lazy and missed the cut off point where it got automatically renewed. But even if there’s going to be a penalty fee, ask how much it is. In my case, it was well worth it.

LH: Yup, we did the same with Sky Movies – although there was no penalty fee. We had it for ages because we both like movies, but we weren’t watching much of watch was available and what we were watching was the Pay Per View stuff (not as bad as it sounds – just the Box Office movies!). But we had a look at Netflix and we’re paying about £5 a month. It’s great. I can’t believe – although of course I can – that we didn’t do it sooner. The savings are massive but they rely on you getting comfortable.

PW: They do. Going back to direct debits, which Lorrie mentioned earlier, what I do is I have two bank accounts that are my main day-to-day accounts. One of those is where all my direct debits go from – I know how much will go out every month so I always keep it topped up with that and a bit extra. So I can safely spend from the second account. And for me, that works much better than having one account for it all. I used to do that and I was never quite sure if I could buy something one day but would then have to pay a bill from there the next day. Having two accounts reassures me and makes sure I always have enough for Direct Debits and regular bills.

LH: That’s a really good idea. I work most of my personal finances from one account and although I’m lucky enough not to be low on money at any point during the month at the moment, but there’s always that frisson of fear when you transfer some across to a savings account or you have a bit of a quiet month. There’s that moment at the supermarket when you think, “Oh my goodness, is this payment going to go through?” That never goes away. If you’re a bit low on money, it’s a great way to take that fear away. If you know what you’ve got, you know what you’re dealing with.

Again, it’s this awareness – it’s always better to know. Even if you’ve £50 or less in your account and you’ve sectioned off £100 for your Direct Debits and bills, at least you’re not in a sticky situation where you have no money or you’re going overdrawn and paying an overdraft charge.

PW: Nothing goes out of that spends account unexpectedly – if it’s in that account you can spend it. And by working out the average amount you spend per month in bills, you also feel confident that your rent and insurance and whatever else will be paid.

LH: Yes, because it’s not a joke, is it? You can get overdraft charges, late payment fees, you can lose your home, car, gas, electricity, water…and going back to what we said earlier, sometimes freelancing is an option people turn to when things have got a bit tough and they can’t find a job. This is the whole point of this podcast – to stop you ending up in a real pickle.

PW: Yes, you’ll read stories online about Direct Sales Copywriters who charge like £30,000 for a sales letter and you might think, “Well, I’m struggling to buy food.” I guess what we’re saying is that that can happen too. Don’t think you’re doing it all wrong if you’re struggling a bit – everyone has dry periods, especially when you’re starting out. We know not every listener is that direct sales copywriter getting £30,000 a week.

LH: Yes, it can be really tough and freelancing can be an option for people who don’t have a lot of money, so it’s really important to be careful when you start out. Once things improve you can relax a bit but it’s important to keep up those good habits.  You’re less likely to find yourself in a position where you’re in trouble again.

PW: Yes. Another thing to bear in mind is when looking things that you have to buy but can get cheaper than just going to your high street shop. First of all, always shop around. The net makes this so much easier – I remember the days of traipsing from shop to shop, to see if one shop was selling that kettle you wanted for £5 less. These days, there are a million price comparison websites. You can go shopping on Google, compare prices on Amazon. Certain things like printer cartridges, as everyone knows, are ridiculously expensive but there are ways to get good deals. One thing I do is this: there’s a particular stationery company here in the UK that offers really good freebies when you spend £39 or more.

Now, normally I wouldn’t spend £39 in one go on stationery but when I need printer cartridges and I know that buying a set of black and colour could set me back by £40, I check that website to see what their current freebie is. They can be really good. That way I might pay normal prices for the cartridges but get a great freebie like a digital radio or one of those fans that doesn’t have a spinny thing! Alternatively, if you don’t want a freebie, look at the million different printer cartridge websites.

LH: Yes, remember you’re a business – have a look at business wholesalers or go on business stationery websites. Or, if you get a freebie you don’t want, stick it on eBay or Amazon. Make a fiver or a tenner out of it – it’s better than having it sitting around collecting dust.

PW: Definitely. And in most other aspects of our lives, we usually shop around, so don’t forget to do it just because you’re dealing with business expenses. When I bought my printer, I compared so many websites. I decided on the one I wanted and you can talk about like a £50 difference if you find a site with a good offer on, so always check.

LH: Yes, and always check whether you need to buy things like this. If you’re short on cash, libraries have printers, corner shops have printers. Don’t think that to be a freelancer, you have to have a top of the range printer, scanner, laptop, office equipment, paper, ink…if you can’t afford it, work with what you’ve got.

PW: And never ever use your printer as a general photocopier. If you’re teaching a course for a day, for instance, print one and take it to the local news agent who can do 20 copies for 5p a page. If you print out 20, it’ll cost you far more.

LH: Absolutely. Now, moving on from buying without shopping around, buying brand name products is another quick way to throw your money away. It’s another quick business/personal crossover because you buy brands and non-brands in every part of your life, but some brands are worth spending on but others, such as medicines, are exactly the same and you’re just paying for the name and/or the packaging.

PW: Yes, you can buy a packet of 16 paracetamol for 30p or you can buy a branded pack of painkillers for £2.50 – it’s exactly the same chemical.

LH: Same goes for cold and flu capsules. You have a quick look at the back of the pack and supermarket brand cold and flu medicines are not only cheaper by about £3 per pack of just 16, they’re also often better! The packet will tell you what the ingredients are – don’t be taken in by shiny marketing!

PW: Another thing to look at is cashback type deals. There are various websites. I use one called TopCashBack but there are plenty. Basically, these websites gain an affiliate profit if you buy through their link but then they share that profit with you. So say you want to buy something from Debenhams and you buy from a cashback site, then if they get £3 back from that sale, you might get £2 from that. And sometimes the offers you get are very generous, like 10-15% cashback on purchases you make. And even if you buy in physical shops, get a loyalty card and start collecting points on there.

LH: Absolutely – or print your own vouchers. If you go to the company website, you might be able to print something off and get 20% off. It’s worth it.

PW: Yes, yesterday I bought credit for my phone from Tesco but I got Tesco clubcard points on my phone credit purchase but I also had this triple points voucher so I got three times the clubcard points on this top up voucher, which I had to buy anyway. It’ll only be about 30p but it all adds up.

LH: Of course it does, over the course of a year, say. You read, quite often that there’s a bit of a stigma for vouchers in restaurants.

PW: Yeah people are embarrassed, aren’t they?

LH: Yes, but if you’re embarrassed and you don’t want to use vouchers on a date, for example (although it’s obviously fine!), that’s fine. But if you’re having a meeting with a client in a café or restaurant, your client isn’t going to be hanging over your shoulder when you pay. There’s no shame in keeping your money anyway.

PW: Of course. Now, given that we’ve covered so much ground on this topic, what we want to do is split it into two episodes. That way, we can carry on in this depth and make sure we don’t want to miss anything out – this is a really crucial subject.

LH: Yes, as we’re talking about how to save money and stop your business losing money, it’s quite a sensitive topic and I think that’s what’s contributed to us wanting to cover everything that can be helpful to people who are perhaps struggling a bit.

PW: And so, this gives you an added incentive to tune in in two weeks’ time, so do make sure to subscribe so you don’t end up with half a picture. You can subscribe at alittlebirdtoldme.podomatic.com and all the different options are on there. So thank you very much for listening – I’ve been Philippa Willitts…

LH: …and I’ve been Lorrie Hartshorn and we’ll catch you next time.