It’s great to be a freelancer. Ever since I started my journey as a freelancer I have been earning a comfortable steady income. But it’s one thing to be able to earn money and it’s another to be able to manage it. This fact led me to write this Money Management Tips for Freelancers post.
When I started freelancing, I was glad I was able to pay my bills and a few luxuries, but I knew that if I wanted to do bigger things in the future I had to find a way to make optimum use of my money.
Just like every regular worker, freelancers need to know how to manage their money. If you don’t have a plan on how you should allocate the money you earn or what you would like to achieve in the future then you’ll find yourself spending money on things that are completely unnecessary.
Knowing how to manage your money is the beginning of having a comfortable living. And if you’re a newbie freelancer or you’ve not been managing your freelancing income, then now is the time to start. Here are some money management tips that have helped me.
Money Management Tip 1 – Track your money
This is the first thing I believe every freelancer must do in order to manage their money. You need to be aware of how much is coming in and how much is going out. Take note of everything that you spend your money on and what brings in the most revenue. You can do this on a simple spreadsheet.
When you track your money you are able to budget better. Tracking your money also enables you to know how much you can keep aside as savings.
Money Management Tip 2 – Have a savings fund
As a freelancer, there are days when business can get a little dry, especially if your freelance business is such that depends on the season. Having a savings fund is a great way to keep money aside for those slow months. It is also a great idea to get financial planning advice from wealth management firms to help you manage your funds effectively.
If you’re tracking your money, you’ll be able to determine how much of the money you earn can go for savings. Make sure that you consistently keep that money aside for savings. The key to this is commitment. You need to be determined that you will save the same amount every month. Little-by-little you will see your savings grow.
Money Management Tip 3 – Keep and stick to a budget
You probably have heard a lot about budgeting. Budgeting is a great way to make optimum use of every penny you’ve got. When you budget you know exactly how best to spend your money. Without a budget you will find yourself spending money on things that are not necessary or on things you would end up not using.
Estimate how much you are willing to spend every month. Divide that by 4 weeks. This will give you an idea of how much you can spend for the week. Make sure that all your spending for the week is within the sum you budgeted.
Money Management Tip 4 – Send out invoices
I handle blogger outreach for a number of clients, and I find it funny when bloggers don’t send out invoices. You should always send out an invoice for every completed job. Invoices are the easiest way to track paid/unpaid work. Invoices also make it easier to monitor cashflow. I always advise bloggers to send out invoices as it makes the job easier for both of us. I also I send out invoices for every job I complete.
Invoices are super easy to generate on Paypal. You can also set up your invoice template on Microsoft Word or Excel.
Are you a freelancer or self-employed person? How do you manage your money? What do you think of these money management tips?