10 Money Management Tips for Freelancers
By Erica Sunarjo
Being a freelancer can give you a lot of freedom when it comes to managing your working hours but also your finances. While it can be a great way for you to live comfortably, it is not always a way to make a stable income and you will have to be prepared in case anything goes wrong.
Managing your money will come through making better financial decisions and sticking to them. There are a few different ways for you to make sure that you still manage your money even if there are huge fluctuations in your income from one month to the other. Here are some tips to help you get some ideas on how to make it work...
- Always set a budget
Setting a budget will really help you manage your expenses and not spend more than what you are supposed to.
- Invest into healthcare
While there are a few things you won’t need to spend money on, healthcare isn’t one of them. You need to make sure that you are covered when it comes to your health in advance, otherwise the expenses can be great when you eventually get sick.
- Set milestones for bigger projects
When working on a more long-term project, it would be a good idea to ask you employer to pay you in milestones instead of just at the end of the month. This will help you manage your expenses better and not end up spending all your money at once.
- Pay your bills first
Paying your bills should be your very first action when you get paid. This will help you keep your money under control and you will never have to worry about large last minute payments at the end of the month.
- Don’t forget about your taxes
As a freelancer you will have to manage your own taxes and that can become problematic if you are still new to this. Saving up for your estimated quarterly taxes should be a priority of yours, otherwise you will end up in trouble.
- Save up for your retirement
Freelancers are the ones who will have to worry about their retirement plans. A good way to go about this is investing a 10-20% of your income into retirement. Even if you live in a different country than your original, TheWordPoint can help you with all the needed legal translations in order to set up an account for your retirement savings.
- Buy things cheap
If you wish to manage your money a little bit better, you should start by finding cheaper versions of the things you need. Is it really worth it to buy a very expensive pair of shoes when you’re on a very tight budget?
- Save up for an emergency fund
Having an emergency fund will get you out of a difficult place if your income is not steady. The months when your income is higher, put some extra money aside in order to be ready in case next month is not as productive.
- Work with an accountant
Working with an accountant will help you manage your spendings and taxes and it will be some money well-invested, especially if you’re a new freelancer.
- Always keep track of what you spend
There are plenty of apps which can help keep track of your costs but possible the best one is the notes application your phone already has installed. Write down everything that you spend and you’re bound to keep things under control.
There are many ways for you to manage your money more effectively and to be sure that you will always have enough money to get out of a difficult situation financially. Which ones of these tips do you think will be the most helpful in your situation?