These days, money is so difficult to get by. For a freelancer, it is especially a challenge as unlike regular jobs, income might be plentiful in one month but meager in the next; furthermore, looking for work is a serious problem. But since every problem has a solution, freelancers have a leeway. There are tips that freelancers can use as a guide to stretch their income from month to month:
- Trace your expenses
It is difficult to predict freelancer’s funds, especially during the early stages, since workload and income vary from month to month. There are times when income swings up and times when it goes down. This way, budgeting is difficult. At the start, create a budget that tracks all of your expenses to include all necessities and any other. The second step is to total at the end of the month and deduct from it your average income. It is advisable to overestimate rather than come up short.
- Estimate your average income
After freelancing for a while, you have at least an idea of your income. Look back at your earning in the previous year and divide it by 12. You can trace your income for several months and determine your average from those figures. This will give you an estimate of your average monthly income.
- Make a flexible budget
After deducting estimated expenses from monthly average income, you will see your budget. If you are short, study your expenses and delete what is irrelevant. If cash flow is above normal; give yourself a treat you deserve. If work’s slow, be stricter in your expenses.
- Self-discipline in handling your budget
Do not be tempted to splurge when the going is great. Some freelancers can hit the jackpot with plenty of clients and cash pouring in. Since nothing is permanent, the tide might turn and you will experience months of drought. Remember that the rule is: buy only what you need, not what you want.
- Saving is the best option
Everyone must have an emergency fund, more so for freelancers. Try to set aside enough money during the days of plenty; at least to cover three to six months of your living expenses. It is even better for freelancers to save for at least nine months of living expenses before the next windfall.
Freelancing full time for most people seems like a dream come true. Enjoy the freedom of being your own boss, working in the comfort of your own homes, managing your own schedule and hours and being responsible for our own success.
It all sounds great – but sometimes you may not be able to make both ends meet compared to the security of working for a company, or getting a 9 to 5 job. Consider the responsibility of working on your own. Learn to budget your income as the time of plenty has a corresponding time of want. Starts saving and you will never have to make both ends meet. You are the one responsible for everything related to your work.