Those who are in the free swimming, don’t come to card a steady salary and a bonus. It is therefore important to handle money.
Web designer, Creator of training courses for freelancers. A regular contributor to The Huffington Post, Forbes, The Next Web and other publications. The author of four bestselling books about creativity and productive work.
Spoiler alert: spend less than you earn. Boring, but seems to be simple, right? Translate personal budget in surplus mode and achieve a positive difference between revenues and expenses is much easier if you limit spending.
Those who work for themselves, creativity usually is more enthusiasm than managing expenses. Indeed, this is very cool: do what you love and still get money. Earn pretty well and I think that budget planning is not for you. Stop, here the logic begins to limp on both legs.
If we do not control your expenses and don’t know how much is spent on the Essentials, it will not end well. Spend more than you earn? So, soon will have to work more.
None of us tells the client “Oh, come on, how much money, just pay me anything, and I’ll do my job” — so why do we often not want to know how to spend their money? Control of income and expenditure is very important, because it will help you understand what we can afford and what not.
How to budget freelancer
1. Determine the size of your paycheck
Yes, you work for yourself, but who said that in this case it is impossible to assign permanent salary — the same amount every month? Don’t know how? Take the average amount over the past year and pay themselves 70%. The remaining 30% Express taxes if you work as an individual entrepreneur, and incidental expenses. It turns out more-or-less constant amount which can be disposed of.
2. Absolutely track all spending
You can install a special program or just to have for this purpose a table. Every month there capture all income and expenses. A new month a new table, so you’ll understand what to spend too much money.
3. Find out their minimum needs
Calculate how much is spent per month on housing and food. To get back the budget, you need to earn at least twice more. If not, think about where you can save a house, for example, or a car. The choice of accommodation and a car generally requires a very balanced approach, as the costs for their maintenance and periodic repairs will fall on your shoulders the additional burden.
4. Create a safety cushion
You never know, suddenly the flow of orders will decrease, or the next crisis breaks out. Enough to save for a rainy day 10% of the monthly salary. By the end of the year will receive an amount sufficient to ensure that you sleep easy. Even if it’s something serious, you will have something to live for.
If you want to buy a few things for work or personal use, place the waste in order of importance. What you should buy now and what can wait a month or two? The purchase of most of the things you can safely be postponed for a particular period of time.
6. Find ways to save money
Regardless of how much you earn, find ways to cut unnecessary costs. Discard cable TV: why do you need it when you have Internet. Rarely go to restaurants: to cook yourself is much more fun, especially if you do it for other people. Buy fewer new clothes: it’s just clothes. Save big on get-togethers at the coffee shop: at home also can cook coffee will work even better. In short, if something you can refuse — refuse without hesitation.
Reducing unnecessary expenses, you will save time that was previously spent on earning money to cover these costs.
You have more free hours to enjoy life. If you analyze your spending for a few months, you’ll see how much money is spent on things of questionable need. An impressive amount of work, right?
7. Expand your sources of income
If you are a freelancer, nobody forbids to make money in many different ways. Design, consulting, record podcasts, copywriting — if there is one for whatever reason is not profitable, will help others. This approach will allow you to always stay afloat and have a sufficient number of orders. In short, if there is a profitable way to invest in their own development, it is diversification.
What I learned in 18 years of freelancing
In polite society to talk about money is not accepted, but sometimes still need. This is especially true of people who work for themselves. Now, after so many years of swimming, I have learned to be content with little. I don’t need a fancy car or expensive apartment in the center. Each dollar I use as efficiently as possible, so I don’t have to spend a lot of time on making money. I can just live in his pleasure.
Adherence to budget is not moaning from the “Oh, Woe, how without it to live!”, and pretty fun game from which you can emerge victorious.
Sometimes I give myself small tasks to stay out of the shop, and use only existing supplies, not to visit coffee shops or six months to spend money on rent, food and gasoline. And you come up with quests that will help the prudent management of funds.
I realized that free entertainment can bring more joy than what you can buy for the money. Walking, gardening, swimming in the river or lake, picnics, Board games, home parties — it’s really fun. My wife even refused gifts on birthdays and other holidays, and instead of just throwing a great party. All the junk we don’t need a new sensation always bring joy.
As mentioned in the beginning of the article, not to be broke, need to spend less. What are the details of the process?
Pay yourself a regular salary, even if the income varies from month to month, and you’re the only employee.
Know how much you get and spend every month.
Remember why you generally earn (more to life than work, money and spreadsheets).
Well, it’s time to start correctly to manage your money. Maybe it’s not as interesting as pure creativity, but it is very important.
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