**This post contains affiliate links.**
Confused about how much money you should spend on blogging? Do you wonder how you can invest in your business when there is so much risk? Download the Blogging Finance Spreadsheet and balance your business budget.
My inbox is often visited by variations of the same question… and it is difficult to answer:
- How can I afford to spend money on blogging?
- How much money should I spend on my blog?
- How much does blogging cost?
- How much money can I invest in blogging… when I am not making money yet?
But as a person who has managed her business finances poorly only to have a radical transformation and start balancing money well, I have discovered a formula that will tell you exactly how much you should be spending on your blogging business.
Is blogging expensive?
When you compare the price of starting a blogging career to the cost of other start up businesses, the fee is almost insignificant.
However, when you realize you like blogging and want to make it a career, things can get expensive.
You eventually need:
- Email marketing services (I use ConvertKit.)
- Social media management (I recommend Tailwind for Pinterest and PostPlanner for Facebook and Twitter.)
- A virtual assistant or two
- Courses to keep learning the next step (like those available at Inspired Bloggers University)
- Webinar services (I use WebinarJam.)
- New technology as your computer or phone requires an upgrade
- A larger data plan to handle live video
- Camera/s, lighting, microphones
- and the list grows.
Truly, there are lots of ways to do things for free but it often takes a ton of extra time and can stagnate your growth. Trust me. READ: Frugal living almost killed my business.
Then, there is the polar opposite of not wanting to spend money on your blog. You tip the scale of spending too much.
Where is the balance?
What makes spending money (or not spending money) harder
Blogging is not a “get rich quick” career.
I didn’t make a profit until my second year of blogging… and it was a whopping $100. TOTAL. My third year of blogging was when my income started to be consistent and grow.
Are there bloggers out there who grow faster? Absolutely. But they are not the norm.
While it does seem the bloggers who put money into their businesses typically experience growth faster, investing financially in your business is hard because there are no guarantees.
So how can you decide whether to invest in your blog or not?
How to spend money on your blog wisely
As you consider blogging as a business, be honest with yourself. Are you able to commit the hours necessary for growing a blogging business? Can you be consistent? Will you stick with this for at least three years – come rain or come shine?
If you cannot commit to at least three years, find something else to do.
However, if you are ready to pursue blogging as a career, it’s time to invest.
Every business requires some up-front expenses, and yes there is risk involved. But, take it slowly.
I recommend paying for your domain and hosting. Not negotiable. These are MUSTS.
Email Responder Service
Next, because I believe that growing your email list from DAY ONE is also critical for permanent success, start an account with MailChimp or Mad Mimi. (I am not an affiliate for either company and that makes me easy to trust. Either would be a great starting place but if I had to choose one, I would say, “Go with MailChimp.”)
You want the option to send a freebie to those who subscribe. With MailChimp, you access automations for about $10 a month.
Once you have a list of 2,000 and/or have a product to sell your subscribers, switch to ConvertKit.
One other thing I would recommend as you start a blogging business is to continue your education.
Blogging courses can range in expense from free to hundreds of dollars. Personally, I consider blog education a ministry and realize that my audience cannot afford the expensive classes. That is why membership through Inspired Bloggers University is only $29 a month and includes ALL of the courses you need to establish a healthy blog and grow it into a successful, money-making business.
Inspired Bloggers University courses are more thorough than any you will find anywhere else and come with a free community where you have access to other members and ME. I do not retreat from you. My goal is to help you, not to take your payment and disappear.
Everything else you might be tempted to purchase is optional.
The “can you afford it” equation
Now, let’s talk about numbers.
In January, a friend sent me a copy of Profit First by Mike Michalowicz. From the introduction, I was riveted. It’s like Mike knew me personally… and how I was killing my business.
You see, I have a knack for helping others create amazing businesses from blogs. I even have a knack for making money. But I stink at keeping money in the bank.
Until I learned Mike’s secret.
As you begin to make money with your blog, divide your income into four categories: your paycheck, expenses, taxes, and profit.
Depending on the amount of money you are making, you will assign a percentage to each category. The majority of us make under $250,000 a year and should divide our income as follows:
- Your paycheck = 50%
- Expenses = 30%
- Taxes = 15%
- Profit = 5%
(If you make more than $250,000 a year, please get Profit First to see the recommended percentages for your income bracket.)
How do you keep the money separated?
Believe it or not, you are NOT supposed to transfer everything to your personal banking account. You need to set up three new accounts: checking for expenses (I use PayPal), savings for taxes, and another savings account for profit.
So, let’s say you have grown your income to $400 a month. Your income would be divided into four accounts:
- Your paycheck into your personal bank account = $200
- Expenses into a business checking account or PayPal = $120
- Taxes into a savings account = $60
- Profit into a different savings account = $20
Now, you can clearly see what you can afford because your blogging business has an expense account.
You have $120 per month to cover your business expenses, whether they be web hosting, an assistant, or continuing your education.
What should you do with the profit portion?
That is between you and your accountant.
I also recommend that you read Profit First for yourself as there is MUCH MORE wisdom about operating a profitable business as an entrepreneur. This barely scratches the surface.
Free Blogging Finance Spreadsheet
Ready to start balancing your business finances? Subscribe and download the spreadsheet I use to track my four categories and make sure each is deposited into the correct account.
I have included a video to explain how the spreadsheet works.