Money cannot be easily get anywhere, anytime, especially now that freelancing is the only job that can help the minor persons like me, to earn money. It is not a trash that can be easily found and get anywhere you want. Inversely, it is as a fruit that needs time before harvesting time comes. Financial crisis or money shortage is always on the way of every freelancer. They are many things needed to pay before the deadline and there are things that they need to buy for their daily life needs. Money conditions are very unpredictable for all the money management of freelancers.
Budgeting your freelance income sounds difficult for us especially if there are many things you need to answer by money. One should handle the money wisely, so you will not experience the shortage in the sources of income. As a freelancer, the best way of survival is to budget the finance they have on their hand. Pay attention for having a good flow of money management wherein you are thriving for more sources of money. As a freelancer, your life is full of ups and downs wherein you need to struggle more before you reach the top of success. Most of us, do not receive any special holiday bonuses or annual raise so we really need to budget our money in order to have your money insurance.
In order to become a successful freelancer, one must know how to budget their income. Hence, budgeting tips for freelancers is a good education.
Whether you are a self-employed, part-time or full-time freelancer, these financial management tips will help you to stay in line and bloom as a rich freelancer.
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Income from your crafts and works
As a freelancer, the first step you need to do is to determine the income you get from your projects. Ask yourself:
- “How much I’ve received from the last income?“,
- “How much is the total amount of all the income I’ve received in a month?” and
- “How much money did I receive now?“, etc.
Determine first the income you’ve got from your money resources and passed clients. Through this, you will know how to handle your money wisely. You can divide it to your needed expenses and bills as well as the part for your savings in the entire year. The best way to know your monthly income is when you divide your yearly income into six. A budget plan will be easily made because you know how long the capacity of money you have.
Make your own budget plan
Managing your money will be easier if you started to make a list of your expenses. Make your own budget plan or as I said earlier, there are available softwares in budgeting your money. Make the list of your expenses and bills monthly then try to divide your money. Just keep in mind in saving a part for your savings.
People have their own demands and needs, which is answer by money. Salaries and payments are getting on the way of every one’s life. Check your monthly budget and organize it because it is the great way to effectively manage finances of freelancers, like you. There are many available and downloadable types of software, which will help you to manage your monthly budget such as Mint and Less Accounting.
Include also the quarterly taxes and annual expenses such as life insurance premiums. Know the monthly income you have so that it would be easily to catch up your budget monthly. If your expenses and bills prevail over your income, then you need to take your move on how you can lessen the expenses and bills, you need to pay.
Try to separate your freelancing bank to your personal bank
Freelancing business will grow as the time goes by and you will need your upgrades of equipments, softwares and materials that gives contribute to the success of your business. Various business expenses for equipments (computers and all in one printer), softwares (Photoshop and CorelDraw), Office supplies, marketing expenses, Bills (electricity and Internet Connection) and the training and career development (e-books and seminars). There is significance in segregating your business bank to personal bank.
This will help you to know your limits in spending your money for upgrading and improving your business sectors as well as you will know your limits in spending your money for personal uses like commercial products, clothes and shoes. Following this tip will help you to monitor the exchange flow of money between your business and personal sectors.
Money in case of emergency
One of the mistakes that a freelancer usually done is the unawareness of the things that is possible to happen. Many of freelancers grieve from the long list of their debts because of the money they spend on emergency expenses. Accidents may happen anywhere, anytime. We do not have any clue if accidents will going to happen today, later or tomorrow. Save some money as your emergency fund in case of emergency.
If there is something happen unto you, then you have your money insurance from your emergency money resources. If a phenomenon come and ruin everything in you, then you have your source of money to rise from that downfall. Through having your emergency funds, you will not going to bother about financial matters when emergency situations happens. If you have an interest of having special bank account for emergency fund, find the bank, which is giving a highly-interest rate. Through this, your money will earn interest in the months when you do not need to touch it.
Give yourself a salary
As I said earlier in tip#4, separate your business accounts from your personal accounts. Do you really separate equally your monthly income? If not, what will happen to your personal and business expenses?
Give yourself a monthly salary that you can use for your personal needs. Long-term savings and having your own monthly salary is different from each other. Long-term savings are your money saved for your future needs and dreams such as houses and cars while the monthly salary you give on yourself is the part of your monthly income that will support your own needs. Deodorants, clothes, dresses, food, etc. This will help you in giving yourself a chance to divide the expenses you usually have in your personal life.
Say hello for your future
Not all day, you can work and support your needs. When time passed by, maybe you will not be able to work again or there will no more clients who will avail your services and offers. Plan for your long term savings, which will give a massive help in facing your future. Long-term savings that is plan to spend for buying house and lot or maybe a brand new cars. This plan is far from your two banks: business and personal bank.
It will not be used for any incidents or object unless the you sell all your properties and face the financial crisis of your family. Say hello to your future by handling money tightly and securing it for their future needs, Long term savings often spend also in huge and expensive dreams of your whole life.
Reduce the unnecessary spending of money
One of the effective ways of financing your money is to reduce the unnecessary spending of money. If you know that, your money does not worth of things you want to buy, and then find something the same but better than that.
If you are using air conditions at rainy days, unplug it now and use electric fan so that you can conserve electricity and money. If sockets are full of unnecessary plugs, do not bother to unplug it so you can avoid the possibility from having short circuits. Pay attention also to your entertainment expenses wherein you will go to bar and drink liquors. Instead of doing this, start your work if you choose not to go out with your friends.
Halt in having big celebrations
Most of the freelancers who got their first salary often celebrate through going out with his/her friends and family in bars and restaurants. They spend their first salary in having celebrations. But do they think that they need to keep some parts of it? I mean, celebrating is not bad at all unless you’ve spend all that you earn.
Halt yourself from having big celebrations instead celebrate but not that you need to spend it all. You are free from giving yourself some celebrations as your reward to yourself. However, remember the importance of saving your income. If your money end up in a surplus, then don’t think twice to let this as your additional for your business or personal account.
Boost your income
Not always in your life, you can earn bags full of money except to those people who still earn money even they only seat in front of their televisions and take a long hours of sleep a day. Find some part-time job that can help you to boost your income.
Recommended: 10 Work at Home Productivity Tips to Stay ProfitableDon’t you think that having another job will be helpful for you to easily budget your monthly income? Freelancing sometimes has a difficulty from having clients especially if you do not have the courage to let them know your services. Sometimes, there are rainy days wherein you do not have clients that can give you a salary. That is why you need to have some part time job so you can have your other source of money. Boost your income for you to have more money that can serves as an additional to your accounts.