Money After Graduation’s small success online has been unexpected, but it’s certainly a happy surprise. Since I started writing about my journey out of student loan debt, I’ve learned A LOT about how to manage my finances and met a ton of cool people. I’ve also had the opportunity to do a few freelance writing projects, which have been amazing — and the income hasn’t been bad either!

When I filed my taxes this year, I had to claim my blog & writing income — otherwise I’d be committing tax evasion, which while it would certainly make for an interesting blog post, has some negative consequences. I would encourage any of you making money blogging that you claim your income. With most funds being delivered electronically via PayPal to your bank account, it would all be fairly easy to audit. In the interest of having no awkward conversations with the CRA or the IRS, I repeat: claim your blog income when you file your taxes.

I originally intended to write this post earlier in tax season, but if anyone has been following me on twitter for the past month, you know I’m barely standing with my crushing workload these days and everything has fallen to the wayside. I’m doing my best to balance out the stress with downtime with friends, but this also takes over time I would normally use for blogging. If I didn’t have Erin and Gillian contributing right now you might all think I died and MAG was about to follow suit. No worries, I’m alive… just horrendously busy ;) Anyway, let’s get down to business. When it comes to blogging:

You are the sole proprietor

This means you’re the sole owner of your business, which is different than a Partnership, Cooperative or Incorporation Canada. You can still outsource some tasks like writing and design to other people, but ultimately you’re the one in charge of all aspects of your website. What laws apply to each kind of business can vary by where you live, but in Alberta (where I live) and many other places, you essentially use your full name as the business and there’s no registration required. Since “blogger” is not yet a career choice for the government, I went under the umbrella of writer for identification ;)

You can claim business expenses

Blogging is pretty cost effective but that doesn’t mean it slips wholly under the radar when it comes to business expenses. Web hosting, staff writing, and graphic design are all regular costs. Additionally, you can even claim some or a portion of your household expenses like a personal computer, your internet bill, and a portion of your rent if you have a designated area of your home where you work.

Paying taxes still sucks

My salary offline is decent enough to place me in a tax bracket above the poverty line. However, this means that every dollar I earn from writing is taxed at about 30% (22% Federal Tax + Alberta’s 10% flat tax). Yikes! Kind of a bummer, but I guess keeping 70% of what I earn is better than keeping 0%.

In any case, there seems to be this weird idea online that bloggers are rich and it’s easy to make money with a website. It’s not. It took nearly a year for MAG to start generating an income, and even now it’s not quite enough for me to live on (given the lifestyle I’ve become accommodated to, I mean). I’m pretty sure my hourly rate as a writer probably comes in somewhere around $3/hr, maybe even less, which is the main reason I haven’t abandoned the 9-5 world to become an internet personality. I’m still waiting for blogging to become a goldmine, but in the time being it remains a semi-profitable pastime. 

LinkedIn is most easily described as the Facebook of the professional world. For a long time, I didn’t really get it, but after using it for nearly 2 years now I’m finding it’s a really great way to network and find jobs. Even though I’m not on the job hunt right now, I’m always looking for my next move, and LinkedIn provides a peek at what’s out there.

My actual LinkedIn profile!

DO:

Post a photo. As is true of any profile on the internet, you get more views with a picture. A nice headshot is perfect. It doesn’t have to be professional, but when selecting a photo don’t choose one with anyone else in the photo or one where you are inappropriately dressed (ie. bikini-clad at the beach) or where you are engaged in questionable behavior (ie. keg stands).

Keep your profile updated and truthful. I do a huge private eyeroll when a I see a LinkedIn profile of someone I know listing an employer they no longer work for or exaggerating their role at a company. Remember that your LinkedIn profile is public, and you don’t want uncomfortable questions at a job interview after a prospective employer has Googled you.

Showcase your best. Did you flip burgers for McDonald’s in high school 10 years ago? No one cares, leave it off your LinkedIn profile. Like your real resume, your profile should showcase your most recent and relevant work experience, not every  brush with employment you’ve ever had. Even though I put in years at restaurants, retail and childcare, I leave these items off my LinkedIn work history because they have nothing to do with where I want to take my career in the future.

DON’T:

Friend everyone you’ve ever met (or haven’t met). While I might call LinkedIn the Facebook of the professional world, it’s still not the actual Facebook so don’t go ahead adding everyone and their dog. I try to limit my connections to people I have actually worked or volunteered with. Consequently, I don’t have a lot of connections but the ones I do are reliable references whom I also endorse.

Update daily. If you’re chatty, keep it to your twitter/facebook/blog, not LinkedIn updates. I’m already annoyed that the site lets me know “these 20 friends have new connections”. Too much irrelevant detail!

Underestimate the opportunity. I’ve received 2 job offers via LinkedIn in the past year. Both of them I declined, but it’s nice knowing there’s other things out there. It’s probably not true that jobs will just fall into your lap if you make a nice LinkedIn profile, but hey, it’s not going to hurt you.

Do you use LinkedIn? What’s your experience?

With only one month left at 2012, I have a pretty good idea of where I’ll stand financially when all is said and done. Instead of waiting until the bitter end, I thought I’d reveal now my income goal and how very close I came to success.

In 2012, I set out to gross $70,000

To date, I’ve brought in just over $58K of that, or about 83% of my goal. I expect to earn another $5,000-$6,000 in December, bringing my final total to $64K, or about 91% of my goal. In short, I won’t make it. But I’m cool with that.

After all, it wasn’t a BIG failure. I did pretty good.

If I hadn’t gone without a paycheque in July to accommodate a pay schedule change at work, I would have reached 95% of my goal this year . Oh well! At least that won’t be happening in 2013. The bulk of my income came from my full-time salary, with some extra income from freelance writing and this blog. Very little came from passive income, which is the main source I want to increase over the coming years.

For 2013, my personal income goal is $90,000

Originally I would have liked to set it at $100,000 but I’m not totally sure I’m at the six-figure mark just yet. I thought about setting it at $70,000 again, but my average income for the past 3 months has been about $6,000. This means that for the last little while, I’ve been living and spending like someone making $72,000 (maybe you noticed when I was buying iPhones and TVs and hanging out in Vancouver?).

Setting my goal back at $70,000 for another year is too low, because I expect my income to increase in 2013 for a few reasons:

• I will get another raise at work.
• I have more money invested now than I did at the beginning of 2012, which will generate more passive income for 2013.
• I’m pretty greedy.

As for upping it another $20K for 2013, I realize that’s pretty ambitious and no, I don’t have a plan — but if I fail, hopefully I fail with distinction like I did here.

I set goals by choosing whatever seems just out of reach. 

Because if you choose something that is already within your grasp, it’s not a goal, it’s just a to-do item.

I’ll be honest, grossing $6,000+ per month is weird. It feels both like more and like less than I thought it would. I feel the perks of my income all the time, and then at other times all I feel is its limits. I worry that there isn’t a sum that I’ll live happily with, and then at other times I’m sure it’s just around the corner ($90,000?).

I’ve started assembling some spending and earning plans for 2013, but I still don’t have the personality of an ardent budgeting machine, as befits a personal finance blogger. Actually, as time passes I sort of kind of care less and less about personal finance. Don’t get me wrong, I will always love money, but as the vice-grip of debt loosens, so does the motivation to worry about every dollar that passes through my fingers.

I won’t be meticulously tracking my income in 2013 on the blog the way I did this year — it’s just too much to update every time I get paid. Same goes for Net Worth, which is failure number 2 for this year (though that one is not entirely my fault, since stocks were tanking recently).