Managing Your Finances As a Freelancer
For the millions of people who choose freelance work, it can be a career choice that offers flexibility and freedom from a regular schedule. But it can also be a financially challenging one if you don’t understand how to manage your finances as a freelancer.
From budgeting to saving for retirement, it’s important for those who work for themselves to have the right strategies to keep their financial life as stable as possible.
Irregular income
A major challenge for many who make the leap to freelancing is dealing with irregular income. In traditional jobs, you may receive a set hourly or monthly wage, or even commission based earnings, and thus have an idea of how much you can expect to earn on average each month.
Freelancers often have more volatile income than those who hold traditional jobs, which can lead to cash flow problems when a slow period or illness occurs.
The good news is that you don’t have to let a volatile income keep you from taking on the work that interests you. By following some key financial tips, you can make the most of your freelance work and prepare yourself for any financial challenges that might arise.
Create Separate Bank Accounts
The first step is to separate your personal and business accounts. It’s best to do this from the start, because it will help you see exactly how much money you are making each month and track your spending habits. It will also be easier to declare your expenses when tax time rolls around. You should also consider opening a savings account specifically for your freelance work, which will allow you to build up 3 to 6 months of living expenses to fall back on.
Establish a Budget
Once you have established a separate bank account, you should sit down and calculate all of the expenses that will need to be paid. This includes workspace costs such as rent, utilities and equipment, as well as professional expenses such as software and subscription fees for online tools. It’s also a good idea to factor in health insurance and any other coverage you might need as a freelancer.
For example, you might want to consider getting professional indemnity insurance, which protects you against liability for things like copyright infringement or negligence on the job. Companies such as Dinghy, With Jack and Policybee offer competitively priced policies for freelancers.
Save for Taxes
You can avoid a costly tax bill by setting aside a percentage of your freelance earnings each month. This will allow you to cover any unexpected expenses that might arise, such as an unforeseen illness or the need to invest in equipment.
It’s essential for all freelancers to have the right savings and expense management strategies in place. By putting these tips into practice early on, you can ensure that you are able to maintain a consistent and sustainable income while still enjoying the benefits of working for yourself.
get my free email tips
Discover What I Use To Hire The Right Freelancer For The Job
My Recent Posts
Freelancing
Check out my recent post on hiring the best freelancers around the globe.
All-in-One Sales Automation Platform
Check out my recent post on all-in-one sales and marketing tools and what I think of it.
Sales Funnels
Check out my recent post on sales funnels and what I think about them. Are they still worth it?
Saransh started from ground zero at the tender age of only 24.
He tried many different things to build his online business but had to struggle for 4 long years to see any kind of success.
It wasn't until he learned & mastered the concept of email marketing and growing an email list that things began to change for him & allowed him to enjoy the success he has today.
Since his initial success in late 2019, he has built a substantial email subscriber base, co-authored the international best-seller Ultimate Secrets to Wealth with Brian Tracy, and shared stages with global icons like Deepak Chopra and Neil Patel.
Now his goal is to help other aspiring business individuals to get started with growing and monetising their email list.
He helps them through a myriad of choices available online, giving just the right recommendations when it comes to the tools and resources required to grow their email list and get their business online.
All of these recommendations come based on his own experiences and what has worked great for him and/or colleagues of his.
Saransh Kandoi
©Copyright 2024 Safire LLC
101 S MAIN ST STE 700
KALISPELL, MT 59901