Chicago, Illinois, United States, November 21, 2023 – The freelancing economy has thrived even more during the pandemic, where many displaced workers opted to seek jobs they can do during the schedule they prefer. At the same time, due to the health protocols where physical contact is limited, many opt for jobs that can be done remotely.
More than this, many employers have been actively scouting for potential employees online, prompting millions worldwide to seek offshore freelancing opportunities. If you are in the freelancing world seeking ways towards financial success in your niche, here are some strategies that might work for you.
Budget and track your expenses
Many people project freelancing as a lucrative source of income. This could be true since some freelancing businesses and jobs yield large earnings. However, you shouldn’t be too comfortable about the income you receive monthly.
The freelancing economy is fluid and erratic. You could get the most generous client in the first half of the year and get nothing for the next six months. You could be earning six digits this month and only receive fifty bucks the following. This means that the opportunities in the freelancing world aren’t consistent. So, you must learn what is finance in freelancing by having a clear overview of how much money you receive and where every dollar goes.
This also means living within your means. When you have a clear idea of how much you are earning, then you can decide how much you can spend on something you need or want. There are many free budgeting tools you can use. Choose those applications that are mobile-friendly so that you can peek at your budget plan now and then.
Separate personal and business accounts
Make sure your personal and business funds don’t get mixed up. You can avoid this disaster by dedicating a separate credit card or bank account for yourself and your business. This way, you can separate your expenses and avoid spending on business-related items or activities.
What’s more, having separate accounts would also help make tax planning a lot easier for you. You can also avail of accounting software programs for freelancers and small businesses. This way, you can unload a weight off your shoulders confidently.
Set up an emergency fund
As already emphasized, freelancing can be unpredictable. You can be earning the doubled amount of your previous income this month and get nothing in the next month. Think of this as a reality in this industry. No matter how carefully you plan your budget, there will be times when you will be in financial distress.
To avoid the trouble, set up an emergency fund to access in times of financial distress. If you’re still starting, it could be challenging to build one. That’s why you have to be realistic as much as possible. Set an initial goal of saving 30 days worth of living expenses. Gradually, you can aim for two to three months of living expenses.
Start saving money when your income is high. Of course, you can save for your emergency fund if you stay on your budget. Do not overspend just because you are earning unusually high. Stick to your budget plan and dedicate the remaining funds to your savings. It can be saved in a local or online bank account even if it yields low interest.
Look for other income sources
Since freelancing isn’t stable at all, look for other income sources for a safety net. You can participate in referral networks if you are offering services like writing or editing. You may also email your pitches to your prospective clients. Besides this, you can also start investing in real estate and then rent it out. This way, you can avoid accessing your emergency fund since you have another income source to sustain your daily living expenses in case things get rough.
Buy a health insurance
No one is too young to buy an insurance package. You might think you don’t need it since you are young and healthy. However, you’ll never know what the future holds for you. It’s advisable to purchase health insurance since freelancing jobs don’t get you employer-provided premiums. This is more crucial if you aren’t dependent on an immediate family. Check out prices for plans through healthcare.gov and shop for the best package that would best fit you.
Build a retirement fund
As a freelancer, you can’t count on 401(k) or pension plans sponsored by employers. That’s why you must build your retirement fund to prepare for your later years in life. You can choose between the traditional or Roth Individual Retirement Account.
Moreover, as a freelancer, you act as both the employer and the employee. So you have to make your own Social Security System contributions since you don’t have an employer to deduct this contribution from your paycheck.
Many have shifted from their regular 8-to-5 jobs to freelancing. You can hear many success stories from these individuals. However, many would also say freelancing isn’t for everyone. So, before jumping off to this career, invest in polishing your skills and decide on the niche you want to focus on. This way, you will have a clear idea of what milestones you will need to accomplish to achieve financial success as a freelancer.
Name: Mark Friedgan
Phone: +1 855-646-5201
Address: 29 North Wacker, Chicago, IL 60606, US