Dialogue makes a story pop and crackle. It shows rather than tells the story, quickens the pace of your book, adds tension to the relationship between your characters and allows you to reveal information about your character without resorting to narration. When it sizzles, it can make your book quotable. Snappy dialogue can transform another run of the mill plot into a book worthy of being made into a movie.
It is also one of the trickiest parts of creative writing and the hardest part for new writers to master. Each of your characters' parts in the conversation must be realistic, short enough to keep the reader's attention but long enough to convey the expected information. So how do you do that? Here's how;
STEP 1: ESTABLISH THE PURPOSE OF THAT DIALOGUE SCENE
Dialogue like every part of your story should either be creating more complications for your character or reveal who they are. What information are you trying to reveal with this conversation? Once you know what the purpose of the conversation is then you know what lines would best help your characters meet it.
Let's imagine that your character (Don) is supposed to talk to a homeless person (Ray). If the purpose of the conversation is to show Don as a sympathetic character as well as get information on one of his enemies' movements then their dialogue may involve Ray giving Don the info but just as he is about to leave Don asks him where he's sleeping for the night and offers him a card to go see someone or hands him a couple of dollars. Within one conversation you've been able to push the story forward while developing your character.
STEP 2: STAY TRUE TO YOUR CHARACTER
Each of your characters should have a voice that reflects who they are. For one the words they choose to use should show their background i.e. the kind of education they have, their ethnicity, their sexuality and the country, city or neighborhood that they come from.
A Duchess growing up in 1724 won't speak the same way as a Guido in present day in Jersey. A conservative Texas rancher won't have the same way of speaking as a Drug Dealer in Harlem. Think of the past you gave your character and try to configure their speech patterns to that of someone from that place. If you have no experience with the background your character comes from the YouTube is your best friend. Just search your type of character (e.g. man, boy) along with the town and see if you can find any YouTubers whose speech patterns you can listen to.
Think of your character's personality. If your character is shy and retiring they'll probably have shorter sentences than a girl who is bubbly and likes attention. Extroverts tend to have longer sentences than introverts and dominate the conversations. Just watch your friends. If your character is a rebel, she'll probably cuss more than the cheerleader. An arrogant self-important character will probably use more complex vocabulary then the easy-going wannabe rapper next door. A flamboyant gay man will talk in a different way to a straight laced pastor. Think of who your character is then translate it into their speech patterns.
When writing foreign characters you don't need to keep dropping words in the conversation that mark them as coming from a particular country. All you need to do is maybe have one sentence where they talk completely in their language (translated at the end for your readers). After that just a cuss in some sentences (e.g. Merde) or the name they call the people they are having the conversation with will identify them as foreign (e.g. Mi Amor).
Finally, the conversation should reveal the type of relationship between the two speakers. A son who doesn't like his father or who is being berated by said father will probably answer in short terse sentences. A woman will speak in a certain way to her boss and a certain way to her friend. A soldier will speak in a certain way to his commander and a different way to his wife. Just think of how you speak to the different people in your life and translate it into your character's situation.
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