Freelancing is a great way to earn money and work on your terms, but this lifestyle comes with its own set of challenges. Many freelancers face different challenges to manage their finances more successfully than they did when they had a traditional 9-to-5 job. In this contributed article, we'll be sharing four tips for successful financial management as a freelancer so you can have the best experience possible!
Track Your Money
Although I personally don't believe in a budget, I do believe in tracking your money. It's also easy to go overboard when managing your finances as a freelancer, so building and sticking with a budget may help you avoid any significant financial issues down the road. Determine how much money you'll make in an average month (including side hustle income), set aside some for taxes and deductions, and then develop a realistic number of hours per week that you can dedicate towards earning money through freelancing work. This way, if one project slows down or stops altogether - which they often do - at least there will be enough cash flow coming in from other sources to keep afloat until something new starts up again!
Start Saving Money with a High Yield Savings Account
If you're new to managing your finances, then it's expected that the first time you hear about high yield savings accounts is after you've already opened up a standard checking account. Don't worry, though! It's never too late to open up an online-only bank account, and this type of banking will allow for much more flexibility than most traditional brick-and-mortar institutions. If you consider a high yield savings account, they usually also come with an interest rate attached, which means any spare cash sitting around can actually turn into actual money over time - not just act as filler in between paychecks.
Make More Money
As a freelancer, it can often be challenging to save money. However, if you have some spare capital available - whether from regular savings or side hustle income - then exploring the world of investments might help your financial situation in the long term. While there are many different types of investment opportunities out there (such as stocks or real estate), one great option is to invest with peer-to-peer lending platforms like Lending Club and Prosper, which allow users both large and small to loan out cash at high-interest rates without having to go through traditional banks. This investment can yield even more return than most other forms, but it does require knowledge about how these services work, so make sure not to dive right into this option if you're not familiar with the process!
Manage Your Finances
As a freelancer, it's essential to adjust your lifestyle to fit your financial situation. This means not spending money on things that are entirely unnecessary if you know they won't make you happier/more productive in the long term - especially since this can be difficult when multiple projects are coming to an end all at once. Having extra cash around for emergencies is always lovely, though, so try sticking to the basics like food, water, shelter (or whatever alternative living arrangement works best), internet service providers, etc. These sorts of expenses should come first before anything else does.
Freelancers need to be incredibly diligent when it comes to managing their finances. However, it IS possible to stay on top of everything and have a successful career as a freelancer with a bit of organization and effort!