Behind the freedom lifestyle of freelancing life, many are broke or have tight budget. With These Tricks, You Won’t Be a Broke Freelancer Anymore, what are those? Budgeting might feel like a torture that you have to endure especially if you don’t like financial related things. Worst part is, if you are a freelancer, your budget is up dan down like a roller coaster.
It can be hard to mapping your expenses, especially with the online shops’ discounts temptation, while you have bills to pay. So how can you budget if the cash coming in each month changes? Moreover, what should you do so you Won’t Be a Broke Freelancer Anymore?
- Separate Business and Personal Life Budget
Seems easy right? Well, it is simple but not that easy. If this simple thing is easy most of freelancers are wealthy promising entrepreneur now. To make this easier for you, you need to change your mindset. The freelancing is similar with business, not desperately looking for a job. So set up a business mindset, build yourself branding, and separate the budget for business from personal use. You can open another bank account for that, or do some simple budgeting on excel. Do what suits you, but you must be discipline.
When you have that business mindset you will set up a budget for business expenses. Such as buy online tools, hardware devices, software and apps that costly. Once it’s become business expenses, it become your capital and your mind will find a way how to make the investment return.
- Prepare Gap Cash
Cash flow is number one to prevent you from a Broke Freelancer status. I repeat cashflow is number one. Thus, you must have another saving as a buffer for your business and it is not from your personal emergency fund. This is important whenever you need more budget in doing extended project. Start from small, you can save from $10 or $20 , or maybe using percentage of your income 5-10% of your income.
- Pay Bills on Time
Pay the bills is your top priority, either it’s for housing, gas, water, electricity, subscribing a cloud. Make sure you already set the budget for that. Pay that bills with your steady income from long contract clients, or you can also have a minimum target amount of money that you need to have to pay the bills. Avoid use credit card or loan to pay the bills, use credit card and loan for very emergency case and that’s how you can prevent yourself to be a Broke Freelancer.
- Saving Money is a Skill
Not many people know that saving money is a skill that you must develop. You can use percentage system to save your money. For example, you have around $1000 – $1500 income per month. Cut 30% for taxes from it, pay all the bills and operational from it, let’s say the left over only $100-$150, then keep it for saving. Make sure you have minimum target of saving and also target for saving. For example, your minimum saving is 10% of your income and your saving target is you will buy blue chip stocks every time you’re saving reach $50.
- Ask for Speedier Payment
A net on an invoice is essentially the amount of time someone has to pay you back. The standard net is 30 days. But why not see if you can shorten the time, you get paid from a job? While some gigs have set payment schedules or accounting systems in place that prevent them from being flexible, or while a client might not always bend, it certainly doesn’t hurt to ask.
With clients you have had good relationships and more flexible you can ask for sooner payment, as it would help you with your cash flow. The clients who trust you mostly will say they could speedier the payment.
- One month stay ahead
When you made decision to freelancing full- time, try to stay ahead of your living expenses by a month. For example you started freelancing in April 2021, then you can make one month saving with amount as big as your one-month expenses in July 2021 that you can use to cover all your expenses in August 2021. So , when it comes to September you can use August saving to cover it. With that strategy you can use auto payment for bills and you don’t need to worry about your saving to pay this month bills. To speed your “one month ahead “ saving, you can cut unimportant costs. For example no entertainment and fancy dinner or you can move with your parents for a while rather that rent your own flat.
Source : Yahoo
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