Budgeting for the Clueless Freelancer
You may have spent money to make money. The question now is: Are you spending your money wisely? Many who are top in their freelancing field may not ace it that much when it comes to managing money as a freelancer. Experience is truly a great teacher when it comes to planning a budget, where a professional advice can truly help. There are so many budgeting tools out there and the biggest dilemma a freelancer has is how to plan an income that’s unpredictable in the first place. Because your pay may rise and fall with the flow of your freelance projects, you may just find it hard to start a saving habit.
How Do You Budget Your Freelance Money?
Planning your finances is definitely a MUST, specially when you’re not sure of having a steady stream of freelance gigs. You need to:
1. Save for the Rainy Days
Having emergency funds will help you when your income is low. Have at least three months’ worth of savings to cover your bills in bad times. Keep in mind that your freelance project may be canceled anytime and it will take some time to find a replacement.
2. Make that List
You may think it’s a waste of time, but making a list of your monthly expenses help you become more aware of just how much you’re really spending. You really won’t know unless you write it all down. You can track down these costs the traditional pen-and-paper way, or you may use a simple Excel spreadsheet to help you out. You can also check budgeting software programs like Quick Books.
3. Cut Out the Extras
Whenever you feel the impulse to shop, ask yourself this: Do I really need it in the first place? This will act as your personal guardian angel stopping you from making another mistake. Lower your expenses and shop wisely, if you want to build your personal wealth.
4. Split Your Bank Accounts
You need to separate your personal savings account from your business savings. This way, you don’t get to spend your business money for personal use, and vice versa. Do yourself a big favor! By setting your money aside, you give yourself some peace of mind, specially when taxes are due.
5. Set Your Goals
This applies to setting just how much income you need to get each month, making sure that you are guaranteed of timely payments from your clients. You have to get yourself organized – from record-keeping to settling your bills on time. For your budget to really work, put these 4-letter words into action: S-A-V-E.
You may not come up with the perfect plan, but a good budget truly helps you set realistic goals on how much you earn and spend. You can take control of just how much money you need to live a decent lifestyle. Think of your budget as your safety cushion when you suddenly fall from the heights of your freelancing career. The rewards of having a budget will truly pay you off later. Do you have that dream of living life on your own terms? Manage Your Money Well!
Personal Finance Tips : Financial Management Goals
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Money Management Tips for Freelancers ( Video )
