How to Manage Your Finances If You Are a Freelancer? Tips That Can Make You More Financial Savvy!
A freelancer’s life is different from a full-time or long-term employee’s. Since they have flexible working hours and complete freedom to choose work, they have a great work-life balance. Although there are multiple benefits of being a freelancer, there are some things that a freelancer must consider.
Things that may affect your work are the unpredictable nature of work and how to manage your time and resources with an unpredictable income. Freelancers also have to do without the perks that regular employees enjoy. There are other things to consider, such as managing taxes, unforeseen expenses, and the late payment of employees.
However, you can manage the unsteady cash flow with the right tips and tricks. You can still make your freelancing job work. All you have to do is plan smart, and the job will be gratifying. Consider how you can make the most of your hard-earned money. Here are some money hacks, financial advice for freelancers.
Track Your Income
The first step towards effectively managing your finances is checking your income. While you are a freelancer, sometimes it may seem difficult to track your earnings. When you track your earnings with diligence, you will be in a better position to deal with the good times and the not-so-good financial times in your life.
Maintaining a spreadsheet of your freelancing income and using the data to brace yourself for the upcoming uncertain financial times is advisable. When you track your income better, you will also be able to manage even if you are financially shaky at that time.
Keep A Tab on Your Expenses.
Monitor your spending habits. Expenses do not only the fixed ones (including rent, taxes, insurance) you cannot do without, but you can manage the flexible expenses. Keep a tab on your monthly past expenditures and slash down the expenses where you can, including the on-spur shopping indulgences. Prepare your budget as you manage your average expenses with your average income and prepare a budget accordingly.
A little self-discipline will help save great savings that you can save for fulfilling your future dreams. In some cases working from home can save big money as you do not have to spend on work lunches, parties, or commuting. Freelancers may have to spend on the basic amenities, such as an internet connection, and of course, you may have to spend on a computer and its maintenance. Some freelancers may have to invest in co-working spaces. Pick and choose the right rental place to cater to your budget.
Make The Right Budget
Intelligent budgeting is the backbone of a solid financial program. Manage your expenses and your business expenses with great diligence and follow the 50/30/20 method. In this scheme, the after-tax income will be divided as 50% for necessities, 30% for flexible expenses, and 20% for your savings.
Keep separate bank accounts for managing your accounts better, a business account and a personal account. This will help you figure out your finances better.
Manage Your Taxes
Managing your taxes can turn out to be a cause for concern for freelancers. Ensure you file your annual tax return right at the onset, as doing it last minute will turn out to be a big headache for you. Missing deadlines will also incur unforeseen penalties, and you will also end up missing a large chunk of receipts.
The best thing to do is to prudently manage the finances and file them as soon as you file your taxes for the previous year. There your last year’s tax return will act as your guideline. This way, you will have enough time on your hand to check your expenses and save a lot on your savings to leverage the tax bills. At least keep 25% of your income as savings for filing taxes.
Do Your Retirement Planning Right
Most freelancers forget about planning for their retirement at the peak of their career, yet it is one of the most important things to consider. As a freelancer, you do not have to make provisions for your retirement accounts.
But most financial advisors will suggest that you need to invest at least 20% of your current income in the retirement scheme of your choice.
Freelancing income is never steady. But if you can manage your finances, you will certainly be able to make the most of your finances and lead a balanced and happy life.
More in Financial Advice
Transform Your Retail Business With Social Media Mastery
If you’re a retail marketer posting your social media messages haphazardly, you might be missing out on prime opportunities to turn...September 26, 2023
Mastering Inflation Insurance for Retirees
Are you inclined to put your faith in the Federal Reserve’s commitment to stabilize the inflation rate at 2%? If so,...September 22, 2023
Bella Thorne’s Thriving CBD Ventures
Bella Thorne, the multi-talented artist known for her acting, singing, and social media prowess, has ventured into a new and intriguing...September 17, 2023
6 Ways Drawing Can Relax & Calm Your Mind
Most of us remember the joy of doodling on the corners of our notebooks during long, dull lectures. Even if you...September 9, 2023
Critical Cash Flow Rules for Startups
Starting a new business is an exciting endeavor but comes with its fair share of challenges. One of the key aspects...August 22, 2023
Navigating Life Without a Bank Account
In today’s modern society, a bank account has become essential for managing finances and conducting everyday transactions. However, some individuals and...August 19, 2023
How to Invest When Interest Rates Are Rising
For novice and seasoned investors, “interest rates hiking” produces a familiar sense of foreboding. Somewhere in our minds, we have been...August 10, 2023
Everyday Hacks: Make Your Life Easy With These Fun Life Hacks
Do you often find yourself struggling with mundane tasks that take up too much time and effort? Well, worry no more...August 6, 2023
Beyoncé: The Queen of Pop With Deep Pockets
With her powerful voice, mesmerizing stage presence, and unwavering dedication to her craft, Beyoncé has become one of the music industry’s...July 26, 2023