Top 4 Financial Management Tips for Freelancers- A Survival Guide

Jan 22, 2017

You may consider that freelancing is a simple thing to do on a daily basis, and being your boss. As a freelancer, you are also the owner of your establishment and hence you need to ensure that every aspect of your business is a sustainable operation apart from being creative. One of the most important skills that you need to inculcate is learning to manage your money. The golden rule is if you are unable to manage freelancer income then you will soon land yourself in dire straits. Managing one’s finances is imperative in every walks of life and freelancing isn’t any exception. The discussion below outlines essential items that you may need to consider for managing finances in the course of the freelance venture. The following tips will help you to avoid business uncertainties and other threats in general.

Prioritize your expenses

Whether you have just started or a seasoned freelancer for a substantial period, this is one of the most important rules of managing your finances. Priorities are important as far as financial management is concerned. You will need to prioritize how you spend each and every proceeds that get accumulated in your bank account because never really know when you would get paid next. At the beginning of the month, list all the probable expenses from most important to least one. You may create two separate buckets containing the most important items to least elements of expenditure. Begin with utilities, food, and other payments as you deem fit. Then add necessary items like debt payments, bills, and rentals. As you go through the month, pay those expenses in order. For instance, you receive worth USD 1000 as payments for the orders submitted. Take out what you would need for the essential expenses, like food, clothing, etc. Then set aside the remaining money for other payments like car and utility services. This ploy will help you to keep a track of your expenses and most importantly all your bills would get paid, in the event of a dull period of your job.

Expand the client base

Invariably you would be threatened with a slump in the business and for that, you need to expand your client base. Acquire new clients for the benefit of your business which will help you to stay afloat in troubled times. You may consider of reducing your costs while serving to your clientele. To get going think of writing polished articles in esteemed publications that are prevalent in the domain. This would interest the prospective clients to try your services and solutions and eventually boost revenue. Another option is being active on social networking sites that allow freelancers to build profiles so that potential clients may have a sneak peak of your offerings and connect with you. Thus client acquisition is an important facet in the freelancing business which automatically boosts your chances of raking up finances.

Sharpen the Saw

In freelancing business, every penny counts. To make the most of every single money, you should tune up business know-how. Understanding business expertise includes contracts, negotiations, payments and collections. It is imperative for you to hone up your negotiation skills. Being a freelancer allows you to be your boss and set your worth in the form of prices and expectations. You should not take the initial offer without question and do not accept anything less than what you expect. It is better you have an appropriate contact in place and engage in terms and conditions upfront. You may take assistance from various tools, and that may help you in the formulation of basic agreements and contracts easily and quickly. On the other hand, be diligent on how you collect payments. You must find ways that enable you to put a bulk portion of the money in your pocket. Do a thorough research and select the best option available for you to get paid. While freelancing offers some level of freedom, there are financial aspects that need to be practiced in the best possible manner for reaping benefits in the long run.

Plan for Ups and Downs

Freelancing is something which entails over two extremes. You are likely to earn vastly depending on a number of orders that comes your way. On the other hand, there would be times when you may not get any assignments and suffer from the lean phase of business. Even as your earnings accumulate, this aspect will probably remain unchanged. You must plan your expenses in such a manner that will allow you to survive during troubled times. Just as you would consider the productive times as normal, accept the dull period as inevitability and plan for those times by dividing your entire income accordingly.

Managing monetary affairs have always been a tricky proposition. The abovementioned tips or options aims to offer you with the right insight of dealing the finances by freelancers which would see your freelancing venture in good stead in future.

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