Managing money can be difficult for anyone, particularly freelancers. There are a number of money mistakes that freelancers make and most of these can be avoided. If you work as a freelance designer, writer or any other type of contractor, there are things that you should avoid when it comes to managing your money:
Common Freelancer Money Mistakes
Income – Not maintaining a regular income can cause major financial issues. If you are used to living paycheque to paycheque, fluctuations in your income can be difficult to deal with. The trick is to hang on to a bit of that money when it is coming in. If you have periods of high income followed by periods of low income you can use those high income periods to better plan for times when money is tight. Never spend all of your money as soon as you earn it. Begin putting a bit back for times when work is not readily coming in.
Marketing – Not properly marketing yourself is a mistake that you simply do not want to make. In order to earn an income, you have to let people know what you do. It is very easy to get caught up with work and other things and forget about marketing but in order to increase and grow your business, you simply have to make time to market yourself. Choose a time when you are not terribly busy, perhaps at the end of your workday or in the very beginning of your day. The best way to maintain your marketing efforts is to schedule a specific time each week for this task.
How to Protect Your Budget
Taxes – You have to keep up with your taxes and this includes organising receipts and invoices so that tax time is a bit easier.
Credit – If you do not absolutely have to use a credit card then it is best to pay with cash. Using cash and avoiding credit and payments will help you to keep your debts to a minimum which helps to protect your budget.
Budget – Speaking of budgets, you need one. Take the time to draft a budget and include your income and all of your debts. Make sure that you plan for all of your monthly expenses and look to see what expenses you could possibly live without.
Bargain – There is absolutely nothing wrong with being a bargain hunter. When purchasing office supplies, furnishings or anything else that you need for your freelancing business, look for the better deal. Saving a bit of money is always a good thing and will certainly be good for your budget.
As a freelancer, it is up to you to protect your income and your finances in general. Learn to save as much as possible and remember that with freelancing comes no pensions or other perks so it is up to you to save money for your retirement. Set up a savings account and begin regularly putting money away for your future.
This article was written by Nixon Williams, the UKs leading freelancing accountants serving freelance contractors, interim managers and consultants. Visit them at nixonwilliams.com for more information.