It’s often a conception that freelancers don’t like doing the boring stuff. While it may be true, unfortunately, for freelance writers, putting off the task of money management is not an option if they want to keep bringing in the cash and staying on top of their financial game.
Freelance writing’s financial side is complicated, but this post will give you some tips to help you start managing your money and keep your finances ticking over nicely.
Identify Your Regular Expenses
To stay financially fit, you need to have an idea about the things that most of your money is being spent on every month.
Most commonly these are- rent or mortgage costs, cell-bill, internet, gym memberships etc. Compare the prices of these expenses and see if you can find a lower-cost way of paying for these things.
Then look into additional expenses, such as eating out, going to the movies, going out with friends for coffee. Are these things that could be limited?
Having an idea as to what you’re spending will help you to keep on top of things and help you to start saving, too. You’ll soon be able to start pocketing the difference and notice the savings grow over time.
Plan for your Burrow Fund
When squirrels hunt for acorns and such during the fall, they will take the nuts and bury them away to come back to later when food runs out. This is what we should be doing with our finances. Having enough money stashed away to cover any incidentals, or as an ‘emergency fund’ if you don’t quite meet your financial goal for that month.
For example, you have a burrow fund of around $5,000 that you want to grow to $10,000. On average, you make around $3,000 per month, but in August you only made $2,500, you can loan yourself $500 from your ‘burrow fund’ to cover the cost of those extra expenses.
You have to keep track of this, and then pay yourself back when you make any money over your financial goals. Any money that is left from this amount can be deposited into your burrow fund and grown over time.
Keep Track of Business Expenses
Stay on top of your business expenses to avoid the prospect of financial ruin.
Use one of the hundreds of business expense tracking apps to store pictures of your receipts, and then work with an accountant who will help you to sift through to see which purchases could be claimed as a business expense. Consider as well, having to share your Business Activity Statement, or BAS if you’re running your own business.
However, you’d be surprised at how much of your spending is for legitimate business reasons! Many freelancers don’t take advantage of the fact that their mileage, internet usage and office equipment all could all count towards tax savings!
Managing your finances can be daunting at the best of times. Still, as a freelancer, a lot more complication comes into it, such as managing your own expenses, workflow, and not having access to employee benefits such as leave time and sick pay. Don’t let these stresses keep you from achieving your freelancing goals!