If you’ve ever worked as a Freelancer, you’ll know that it’s not an easy ride. Not having a steady or certain income can be tense and stressful – especially if you’re just starting out and aren’t yet established.
With this tottering income, managing your money carefully and sensibly can be the difference between success and failure. Knowing how to save money efficiently and effectively will help you gain a better overall picture of your finance and is integral if you want to make a successful career for yourself.
You could be the best freelancer in your field, but if you don’t manage your finances well, you won’t last long in the freelance world. What’s more, if you fail to accurately record your work, you can expect to face some hefty penalties from the tax man!
This is where I’m here to help. By considering just a few of these money managing tips, you’ll be able to function in a cost effective manner that is sure to set you up for success.
Budgeting and Saving
This may seem obvious, but sorting out your budgeting is the principal thing you need to do when it comes to sorting out your money as a freelancer. Mismanaging your finances is a path you don’t want to go down. Budgeting can be an easy process, it comes down to putting small amounts of money aside consistently and as early as possible. You should start by tracking your income and expenses over the course of a few months, so that you can review how much money you’ve got left over at the end of the month. This amount is a good place to start.
A simple step, but one that is overlooked time and time again. In freelancing, across the board, income is inconsistent so it’s critical that you set a strategy that will support you. As freelancing means income can constantly be up and down, some months may be quiet. If you’ve budgeted correctly, during the quieter months, you’ll be able to dip into the savings to get you through.
Hire an Accountant
Getting an accountant is a pretty large step in a freelancing career, and so something you may want to consider when you’re more established. Accountants are really, really useful. They are mostly used to help complete books and file tax returns. Freelancers typically think they need one as they are not financially savvy and so it’s easy for them to lose out on money going it alone.
With this said, accountants are a pretty hefty big expense for freelancers and small set ups. The mistake most make is that they pay for their services when their income doesn’t warrant actually needing one.
By taking the time to evaluate the business and learn how to manage the accounts, it will pay you dividends in the long run. With the advancements in technology, bookkeeping has never been easier and rather than manually keep your finances, there are now many types of accounting software that will simplify the process for you. A great way cut out a big monthly/annual expense of an accountant, by keeping your own books, you will keep your overheads low, benefiting the bottom line of your business.
Keep the Day Job
This is where you need to swallow your pride and be realistic with your work. It’s not easy, but as much as you want to fully focused on developing your career you need to be sensible. With bills still coming in as well as your day to day living expenses, you will soon find out that without some form of steady income it can be hard to keep up.
There’s no shame in keeping a job in the back ground for the first few months at least. Besides, freelancing can be a lonely place sometimes. Keeping a part time job going will give you some extra socializing time.
Freelancing isn’t easy, but building a is totally career from it is totally doable! Don’t let the first few months of struggling on beans-on-toast yet you down. As long as you work hard and budget sensibly, you’ll get there in the end!