Unless you've been living in a cave devoid of Wi-Fi and 4G and vegan-smoothie joints n' stuff, you'll know we're living in a pretty digital age, and that's allowed a bunch of people to start working freelance. More than ever, in fact, and many of them are making even more money than those working full-time. How epic is that! That’s not to say that us freelancers have no money worries, of course. In fact, most of us find it pretty darn difficult to earn a regular income each week or month. While there are a few reasons for this problem, it is usually down to poor money management. With that in mind, here are six essential tips to help you improve yours.
Stick To A Budget
Unless you know how much money you need each month, you’ll have no issues spending unnecessarily or taking days off whenever you feel like it. Because of this, you should take a look at your finances and list every expense you have during the month, including housing, groceries, and other bills. Once you have a figure, you can plan what work you need to do to cover it.
Open Another Bank Account
Freelancers may have the ability to earn more than others, but that doesn’t mean that you should be spending all of this money. Instead, open a separate bank account for your business and pay yourself a regular salary. You can set this up to pay you automatically each month. The money that’s left should be reinvested into your company or set aside to deal with unexpected costs.
Plan For The Unexpected
No one knows what might happen later down the line, which is why you should prepare for anything. This means setting aside money each month to create an emergency fund, both for your business and your personal life. This can help to keep you on your feet if and when the business slows down, your car won’t start, or another costly emergency arises.
Consider An Investment Opportunity
Having multiple streams of income at your disposal is never a bad thing. For this reason, you may want to add an investment opportunity or two to your monthly budget. Instead of settling for the first idea you come across, you should do some research and find the best way to invest money for you. Just make sure that you consider the risks involved before you hand over any cash.
Prepare For Tax Season
The thought of being unprepared when tax season rolls around can strike fear in even the bravest of hearts. If you don’t plan and set money aside throughout the year, you’ll face a serious dent in your finances in a few months time. Taxes can differ massively depending on your city and state, so, to ensure you’re not blindsided, you should set aside 25% from every payment.
Speak To A Professional
Being a freelancer doesn’t mean that you should have to face everything alone, especially when your money is concerned. Instead of struggling and risking mistakes, you should contact a professional, such as a financial coach or mentor, to give you support and advice. You can also hire an accountant to deal with your taxes so that you don’t have to.
Don’t let poor money management ruin your finances. Instead, remember the advice above, and take control of your cash.