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6 Important Financial Tips That Every Freelancer Needs To Hear

Freelancers are in high demand these days, and with good reason. When you freelance, you have the freedom to work on what interests you most while building a steady income for yourself. Whether it’s blogging or graphic design that drives your passions, there is no shortage of opportunities for people who want to make money online through freelancing. But before diving into this new career path, it’s important to think about some of the financial tips that every freelancer needs to hear.

Fees Are Expected

Freelancers pay a lot of different types of fees. For example, you might have to pay for your health insurance and retirement plans if your employer doesn’t offer them as part of the package. However, freelancers also need to realize that they’ll be paying certain service charges or licensing fees, depending on their line of work. If you’re working in the IT industry, then you know there are often several licensure requirements before people can start offering services from home. If you’re using PayPal, there are also fees that you’ll need to pay, so make sure to look for the PayPal fees guide for more information. In addition to these professional licenses, many remote workers will find themselves having to purchase equipment like laptops and printers just so they can do their jobs effectively at home without needing to leave all day long just because another client called them up with an emergency request.

You Need To Save

One of the most important financial tips every freelancer needs to hear is that you need to save up an emergency fund. Freelancers don’t have a clear path towards retirement, so they need to squirrel away as much money as possible while they’re still bringing in income from their careers. The best way for freelancers to do this is through saving and investing. Most experts recommend having about six months’ worth of living expenses set aside, just in case something happens where your business slows down, or you lose clients unexpectedly. However, others also advise setting aside at least three years’ worth of funds if you plan on leaving your job behind completely and taking off before getting back into the workforce. In addition to saving, budgeting is also important for those who freelance because it can help you keep track of your income and spending habits.

Get Organized

Getting organized is one of the easiest ways to save time and money when working for yourself. It makes everything easier in life if you are more organized. You can use that saved time to focus on earning more money by taking on bigger projects or spending fewer hours socializing with friends – whatever works for your lifestyle! First, get a calendar and use all of its functions to your advantage. Use it like many people do their daily planners: schedule when you work (including breaks), create reminders for tasks or projects that need completing and write in any deadlines. You can even integrate social media into the calendar – set up notifications on Twitter and Facebook, so you know who’s doing what and how much free time they have! It might seem silly but try writing down every single little thing that comes into your head when working from home. No boss is watching over you after all! Keeping track of everything will help the organization in future steps.

Second, keep documentation!! Whether keeping receipts for taxes at year-end or just noting important phone numbers, keep everything in one place. If you are the type of person who needs to write down your ideas, so they don’t get forgotten – do it! You can even use an old-fashioned paper notebook or sticky notes if that is easier for you than having all this information on a computer screen. Again, just be sure not to lose any important documents!!  Third, create folders and subfolders to store your work files by project name or client name (if applicable). This will allow you access very quickly when needed but also prevent overloading yourself with too much work at once.

Make A Budget

It is important to make a budget when you are freelancing. This means that you should know how much money will come in and what your expenses are going to be for the month or year. Make sure that there is some room in the budget for savings because every business needs a cushion, especially if it is starting with nothing! You do not want to find yourself at risk of going into debt after all the hard work you have put in towards building up your client base and profile! Even though numbers can seem daunting sometimes, they work best when used correctly, so even if someone does not do the math as much as others, it can still be done to get a clear picture of the financial state.

Figure out how much money comes into your business each month or year, depending on the type of freelancing that you do. This means that you need to take inventory of all income sources and expenses for this calculation – Determine what kind of budgeting tools could work best for someone’s situation, such as using an Excel spreadsheet or app on their phone where they can track every expense and see trends.

Plan Your Income

When you are working for yourself, it is important to plan your income. You should know how much money you want/need each month to cover living expenses and desired lifestyle choices (travel, gifts for family members, etc.) Knowing this will help you make decisions about the work that you take on, as well as whether or not certain projects fit into your business model or if they’re just taking up space in an already full schedule. It can also be helpful when setting prices, knowing what kind of monthly salary range would enable you to pay rent at least one day every month might give some perspective on the price points that different types of clients expect from freelancers. Without a doubt, there will always be other jobs out there, but it’s important to think about the work and whether it fits in with your business model.

Make An Investment

If you want to invest, look at how much money is required and decide whether or not it can be afforded. The expense mustn’t be going overboard with investing in your future, for this will cause problems down the road. Find a good amount of money where you are comfortable spending on yourself, so you have no regrets later on.

After reading this article, you should be able to understand how freelancing works. You will also have a better idea of the things that may come your way as a freelance writer and what can help or hurt you along the way. The more knowledge you have going into something new, the easier it is to make informed decisions about it later on. Once again, these tips are not hard-and-fast rules, but rather guidelines for those who wish to follow them!

 

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Alice Instone-Brewer

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