Although being a freelancer can have a range of great benefits, including managing your own hours, working from home and having complete control of your career, it does not necessarily give you financial security. Many people struggle to know the best ways to manage their money, so if this is the case, follow these few steps to help you stay on top of things.
Keep Yourself Covered
A problem that often arises for freelancers is when clients become unhappy which may leave you with unfair claims. Although this doesn’t happen all the time, it can be common so it is best to be protected. When it does, it could leave you seriously out of profit and so to save yourself time and money, you should invest in insurance. This way you have that peace of mind to continue working and earning money with slightly less of a risk. Investing in freelancer insurance or professional indemnity insurance can be the best thing, protecting you as you are self employed.
Try to Stay on Track
It may not seem like you are spending a lot of money when you spend a couple of pounds here and there, but before you’re buying something, make sure that you question whether you really need it. The answer is, probably not. Make sure you learn how to simply cut down your expenses, whether it be inviting a friend over for a coffee instead of going out for one, or starting to shop at a slightly cheaper supermarket. Cutting down where you can will make a big difference if money is a bit short.
Chase Up Your Clients
A big problem for many freelancers is having clients who won’t pay out. So, to avoid this, take steps to ensure this doesn’t happen. A simple way to do this is investing in some simple invoicing software, which will happily send reminders for late payments, avoiding any awkwardness or tension. They’re easy to use and really handy to have, so if you’ve experienced problems like this, then this is a no-brainer!
Don’t Rely On One Income
Unless you have a traditional income, you shouldn’t rely on just one income stream. If a problem arises or the company no longer require your services you could be in trouble. Keep your options open, as working for multiple clients gives you income from a range of sources each month which will be far more secure.
Save, Save, Save!
When you are having a good month financially, where possible put some money aside. This will take pressure off other months where you’re slightly short, and if in the end you don’t require it then you have some nice extra cash available. For added benefit, open a business account to keep some money in.
Overall, being a freelancer can at times be nerve-wracking, but with these tips you have a great chance of staying on top of your finances. Stay sensible and save where you can and it will make a big difference. You won’t have to worry and can enjoy your freelancing career!