Money management can be a difficult task for anyone, but it becomes even more complicated when you work as a freelancer. Working as a freelancer means that you don’t always have a constantly stable income. This can make planning for your financial future much less predictable. Whether you are looking to save money or are simply working to gain more financial stability in your life, this guide is here to offer you the top money management tips for freelancers.
1. Know Your Expenses
One of the most important steps that you can take when it comes to managing your money as a freelancer is to determine your outgoing expenses. In fact, when your incoming finances are likely more changeable it is even more important to have a clear idea of your outgoing expenses.
It can be difficult to track your outgoing expenditure but it is important that you take the time to do so. You should think about all of your fixed outgoings, such as rent, bills, and other regular payments. Once you have a clear idea of what your fixed outgoings are you will then also need to track your day-to-day payments. You can manually track your outgoing expenditures or you can use a mobile banking application to help you identify where your money is going each month.
2. Create an Emergency Fund
No matter how careful you are about spending money on a day-to-day basis, sometimes an emergency situation can occur that suddenly damages your financial health. Creating an emergency fund is essential for ensuring you are able to maintain financial stability no matter what situation occurs.
To make saving money simpler it is often recommended that you set aside a certain amount of your income every month. Of course, the amount that you will set aside might depend on how much you are earning from month to month. However, if you do have stability in your incoming finances it can be useful to set up a direct debit to a savings account.
3. Ask For Help
When you realize just how many people across the world are living in debt, it becomes clear that managing money is often a very difficult process. It is important that you are able to ask for help if you are struggling with money. You could consult a wealth management expert, or even just a trusted friend or family member if you are struggling to manage money.
4. Create a Budget
Creating a budget is a very useful step when it comes to managing your money as a freelancer, and there are many strategies that you can take when it comes to creating a personal budget. For example, a popular budget strategy is called the 50/30/20 rule. If you are to follow this rule you would allocate only 30% of your income to non-essential purchases. You would then be spending 50% of your incoming monthly income on essential purchases and the other 20% would go into your savings.