If you’re a freelancer, it’s crucial to remain on top of your finances as your income is not guaranteed, so it’s well worth planning ahead, to ensure that you’ll be able to cover your living expenses when work is scarce.
5 Budgeting Tips for Freelancers:
Learn how to become a stronger more effective negotiator
You’ll find it far easier to budget for your necessities and luxuries if you ensure that you’re paid a fair sum for your time, talent and skills. It may be worth working out a standard hourly rate, which you can charge your clients. It may also be worth figuring out how much money you need in order to survive on a monthly basis, to ensure that you negotiate fair contracts which will ensure that you have more than enough funds to cover your day to day living expenses.
When you can, try to put aside 40% of your income
As a freelancer, there may be months where you struggle to pick up paying contracts and months as well as months where you more than triple your average monthly income. When it’s possible, save 40% of your income and spend 40% of your income on essentials such as your electricity bill and groceries and the remaining 20% of your budget on luxuries.
While it may be tempting to spend a greater percentage of your income on luxuries, during the months where work is scarce, you’ll be glad that you put extra money aside instead of splurging on luxuries such as restaurant meals and expensive electronic devices.
Install a handy budgeting app to help you keep track of your spending habits
When you’re a freelancer, it’s well worth tracking your expenditure by downloading a budgeting app onto your smartphone. Downloading a budget application onto your phone will help you identify areas which you may need to tighten your spending on. As an example, you may find that you spend several hundred dollars per month on takeaway coffees or that you spend a small fortune for cable television. When it’s far cheaper to sign up to a site such as Netflix or Hulu, which streams current content for a fraction of the price.
Get into the habit of shopping around for the best deals available
Instead of purchasing an item from the first shop you visit, it’s well worth visiting a price comparison website, which will tell you where to purchase the item which you’re interested in, for the lowest price.
You can also save money by visiting two different grocery stores, in order to find the best possible deals on all of your favorite products. As different stores will offer different specials.
Place the bulk of your savings into a high-interest bank account
It’s well worth shopping around to find out if your current provider, offers you the best interest rate available. As you should aim for your savings to grow, in order to cover inflation. As you don’t want your savings to lose value over the years.
So if you’re a freelancer, it’s well worth using the 5 tips listed above in order to keep on top of your finances.