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Self Employment on a Budget

I have been self-employed for a few years now and although I love it, it does come with its challenges. On some month, I am super busy and my bank account is smiling. And some other months, it can be super quiet. One minute I could be wondering how to pay some bills, and the next minute I could be laughing all the way to the bank. That is pretty much the life of a freelancer/self-employed person. Our income fluctuates and there is so much financial uncertainty but I won’t trade it for a job in an office with a regular pay check. The pros of being a self-employed person massively outweighs the cons for me, which is why I do what I do.

 

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You Need a Budget: The Proven System for Breaking the Paycheck-to-Paycheck Cycle, Getting Out of Debt, and Living the Life You Want

Having said that, the key to surviving the self employment world is to have a budget. I love reading finance self-help book on my Amazon Kindle. The book I am currently reading is You Need a Budget: The Proven System for Breaking the Paycheck-to-Paycheck Cycle, Getting Out of Debt, and Living the Life You Want by Jesse Mecham. It is the first book I am reading this year and I am loving the budgeting tips and advice. I have picked a lot from this book and I recommend it to anyone struggling to make the most of their money. You need to read this book. It is full of wisdom and valuable tips. 

Everyone needs a budget regardless of what you do for money. Business owners and freelancers need a budget more than everyone else because of the income fluctuations. Having a budget helps you plan your money and make your money work for you. If you budget right, you can survive on periods where work is quiet because you would have saved money from the busy months. 

 

Self Employment on a Budget

I am going to be handling my money a little differently this 2019. Generally, I am good with money but there is always room for improvements, and I plan to be better this 2019. Here are some things I would be doing more of –

 

Ageing my money

Jesse Mecham advises us to age our money. What this means is for us not to spend all of our money as soon as it comes in. This makes a whole lot of sense. Ageing your money allows you think smartly and set your priorities straight. It takes off the stress of having no money in your bank account and it allows you plan your life.  Ageing your money allows your money wait on you instead of you waiting on your money. It sounds pointless but it works. Trust me, I have tried it. The longer you can age your money, the better. I aim to age my money for at least 30 days. It is a work in progress but I am slowly getting there.

 

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Spend less than what you earn

This should be common sense but it is amazing how we spend way more than what we earn. Which leads to us having to use our overdraft facility, store cards and credit cards to make up for the difference. Spending less than what we earn is the way to financial freedom.

 

Grow the savings

Having money saved away is the way to survive self employment. With the income uncertainty, you never know for sure when you would be short, so it makes sense to always have money stashed away for when the need arises. Growing the savings is one of my many goals this 2019.

 

Make more money

2019 is the year of making more money. That is another goal I plan to seriously work on this year. The way to financial freedom is to have many streams of income. I am planning on working hard on making money via affiliates and I am using an affiliate link in this post for the first time in a long time. Having many streams of income means you have various ways of making money. No one should ever rely on 1 pay check.

 

Do you have a budget?

 

*Affiliate link used.

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The Truth about Freelancing as a Parent

Although making the transition from a 9 to 5 to being a freelancer is worth it, the journey can be a tough one. Freelancing requires a lot of hard work, discipline and perseverance. And juggling freelancing with parenthood can be a handful to deal with.

There are, of course, a lot of upsides to being a freelancer. You get to spend more time with your family and never miss out on special events or moments with the people you love and care about.

Be this as it may, this doesn’t mean that you should close your eyes to the realities that freelancing presents especially as a parent.  Here are some truths about freelancing as a parent that you need to know.

 

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  1. You may experience dry spells

Unlike a 9-to-5 where you know what your take home every month is, income from freelancing projects are hardly stable. There will be months when your freelancing income is great while some months may be frighteningly low.

As a parent with a lot of responsibilities, fluctuation in your income may prevent you from making sure that you meet your family’s needs. Your income may go up and down but your responsibilities remain the same.

Depending only on freelancing projects won’t be enough. It will be a wise decision to create multiple sources of income, especially passive income. This will give you something to fall back on when you’re experiencing a shortage of projects for the month.

 

  1. Flexibility of freelancing gives you the opportunity to be there for your children when they need you

Unforeseen situations like accidents or sudden illness can mess with your normal work schedule and it may be difficult to get permission from the office if you work in a 9-to-5. But as a freelancer, you have the flexibility to take care of your children when they’re ill and injured.

The only downside to such sudden unforeseen circumstances is that when the payments from clients don’t come in on time you may be stuck in a tight corner.

 

  1. Clients can pay late and it will disorganize your plans

In order to ensure steady income, freelancers have to make sure that clients keep to their financial commitments. However, sometimes clients may not keep their word and the payment comes in late. Some clients even fail to pay and you may get nothing at all.

This is a frequent occurrence in the freelance industry and this can negatively affect the financial responsibility to your children.

 

  1. You’ll have to contend with shortage of time

It takes a lot of discipline to be a full-time freelancer and you need to be especially phenomenal at managing your time. When you’re a parent your time is divided between your children and your freelance work. This may mean that after taking care of your energetic kids you need to make do with the little time left to dedicate to your work.

However, with a little adjustment and proper arrangement of priorities it is possible to effectively manage your time with your work and with your children.

 

How do you freelance and parent at the same time? Do you deal with any of these issues?

10 Things No One Tells You About Freelancing

In the world of freelancing, a lot goes on that people don’t know about. But let’s face it, working as a freelancer is very different from working as an employee in a 9-to-5.

It’s easy to get carried away by the wonderful opportunities and benefits freelancers get to enjoy for being self-employed.  But it’s good to see the other side of the coin. Here are 10 things no one tells you about going freelance.

 

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Freelancing is lonely

Unlike in a 9-to-5 where you get to work with colleagues or go to meetings, freelancing is lonely. It’s only you in front of your computer working on projects for your clients.

When you do want to go out or hang out with friends, they are either at work or they are busy with something else. You no longer have the same work schedule as they do. So most times you stay alone.

However, to combat the loneliness you can make friends with freelancers who live near you and spend time with them. It’s nice to spend time with those who understand the loneliness of freelancing.

 

You end up working more hours than you did in your 9-to-5

Many people think that freelancers have a lot of time on their hands since they don’t have to go to an office everyday. What people don’t know is that freelancers work around the clock.

Freelancers don’t have fixed work hours. They work everyday, including the weekends and often late into the night and start all over again early in the morning.

In a 9-to-5 your work hours are defined, that’s one luxury won’t have as a freelancer.

 

People expect you to work for free

Although there are more freelancers in the world, it’s not receiving the status it deserves. People still see freelancing more as a hobby than a real job.

When you get started as a freelancer, don’t be surprised when you get people coming to you to ask if you could work for them for free. Since they don’t consider freelancing as a real job, they don’t see the trade as something that should be paid for.

It now depends on you to educate such people that freelancing is as real a job as a 9-to-5 and as a freelancer you deserved to be paid like any other worker.

 

You have to deal with distractions

Freelancers spend most of their time working at home and are often distracted by the presence of the TV and internet. So when faced with these temptations everyday it can get difficult to finish projects on time.

To be an efficient freelancer, staying laser-focused is key. You may be working at home but you’re still running a business and that requires a lot of discipline and focus.

 

You need to ace up your productivity

Most freelancers run service-based businesses. That means that their income is in direct proportion with the number of clients or projects they have on their plate.

More projects means more money. Therefore, the faster you’re able to work within a day, the more projects you’ll be able to accommodate. And that means a higher income. That calls for you to learn to be more productive.

 

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You may have issues getting a loan

When you’re self-employed some lenders tend to refuse credit even if you earn as much as or even more than you used to earn as an employee.

Most banks and mortgage lenders ask for at least three years of accounts to prove income. Very few of them even consider one to two years. That has posed a serious challenge for freelancers.

 

You have to be in charge of your own pension

The perks of working in a 9-to-5 is that your pension is handled by your employer. Which means freelancers have to take care of their pensions themselves by allocating money for their retirement.

 

Cash flow isn’t always steady

It’s not all rosy when it comes to cash flow. There will be months when you’ll experience dry spells and months when you’re overwhelmed with projects.

That’s where the need to diversify your income comes in. When you create more income streams you can somewhat guarantee a steady flow every month.

 

You can be spontaneous

Freelancers have the freedom to work anywhere they want to. As a freelancer, you don’t have to wait until the summer to travel. You can book a flight or a train ride to anywhere at any time, without having to be answerable to anyone.

 

You have to do everything yourself

Unfortunately when you’re starting out as a freelancer you have to do everything yourself.

Before you have enough funds to outsource some of the operations of your freelancing business you have to do it on your own.

You have to do your taxes and accounting of your business. You write your own copy and edit your own content, post on social media and even negotiate with brands.

But remember that this is only temporary. Once you’re able to build an audience and raise your income you can start hiring extra hands to help you out.

 

Does anything on this list surprise you? How has your freelancing experience been?

 

 

 

 

 

 

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