“Financial Indie” is a series of articles designed to help writers finance their careers. If you have an investment question, please post it and I’ll try to incorporate it into a future article.

In my previous article, I discussed how writers can build a financial portfolio to support their careers. By planning ahead and investing wisely, writers can move away from living paycheck to paycheck toward financial independence.

Getting started is the hardest part of this exercise. Building a base on which to grow your investments takes some startup savings, which can be difficult for some writers to accumulate. The most obvious way to save money is to earn a salary, commissions, or contract fees from writing or a job. If your income is steady, set a target percentage to save each month and stick to it. Set a realistic goal that you can consistently meet. The more you can save up front to invest, the more you can earn in the long run.

If you don’t have a steady source of income, look for ways to save money without doing away with the basic essentials. Based on my experience living in both developed and developing countries on four continents, I’ve noticed that most people spend money on things that they don’t need. What can you live without that will help you save?

Housing, food, and transportation are three of the biggest expenses in most people’s budgets. If you’re spending a considerable amount of money on rent or a mortgage, is there a way to decrease what you pay? Can you move to a cheaper apartment? Can you sell your house or refinance your mortgage? Can you relocate someplace closer to where you work? While most people are hesitant to make changes that significantly impact their lives, short-term belt-tightening may be needed to get ahead in the long run.

Are you able to save $100 per month that you can use to build an investment portfolio? If not, make a list of your income and spending in an average month. Does your income exceed spending? If so, then you’re already saving. If not, look at ways to reduce spending. Can you decrease the amount you pay monthly for discretionary items such as dining out, tech gadgets, and entertainment? Can you decrease the amount of money you remit on utilities? If your monthly budget exceeds U.S.$1,000, you may be able to save $100 or more by cutting unnecessary expenses. If you earn less, then consider scaling back your savings target. A skipped meal at a restaurant, overpriced cup of coffee, using mass transit instead of driving, or switching to free social media to market your book can help you meet your savings goal.

After you save $100, what should you do with it? Don’t spend it! Invest it. In general, it’s best to save for retirement first to supplement your income once you stop working. You may receive a pension or social security when you retire, but in many countries such as the United States, you can set aside additional money tax-free for retirement. In the United States, pre-tax retirement accounts are known as traditional individual retirement accounts (IRAs), and after-tax accounts that are tax-free when you withdraw them after retirement are called Roth IRAs. Many companies offer retirement accounts known as 401(k)s that allow you to set pre-tax money aside for retirement. Consider these investment options first if they’re available where you live.

In addition, you may have other expenses such as healthcare or college tuition for your children. Many countries have programs that offer tax breaks to those who save for college or set aside money to pay healthcare bills. In the United States, 529 college savings plans, flexible spending accounts (FSAs), and health savings accounts (HSAs) offer tax benefits worth considering before building a liquid (taxable) portfolio to finance your writing career.

Assuming that you are able to save $100 per month for a liquid portfolio, think about your tolerance for risk. Do you like to gamble, save your money under a mattress, or are you somewhere in between? Consider your age and how long you have to grow your net worth. Are you close to retirement, when you’ll start to draw down your savings after you stop working, or do you have many years to investment? The answers will influence what kinds of investments you make.

Regardless of your age and income level, there are two important principles to remember when it comes to disciplined investing: 1) Purchase investments that maximize your gain, and 2) Diversify your investments to minimize your risk. Think about your own options keeping these principles in mind. In my next article, we’ll start looking at different ways to invest the $100 you’ve saved.

Disclaimer: I am an accredited private investor. I am not a certified financial planner or investment advisor. The information contained in these articles should not be considered professional investment advice. Use your own discretion when pursuing investment opportunities. For specific investment advice, consult an investment professional.

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