The number of people that decide to do a freelance job has grown significantly in recent years. The current state of the world has also made such a trend accelerate even more. For sure, there are some lifestyle and financial benefits as well from making a living from these kinds of jobs, although, there are certain financial responsibilities that every freelancer should pay attention to.
They should be wise and well prepared so they would not end up in undesired situations. Since money is important, here is some of the best financial advice out there that every freelance worker should consider and think about. They will certainly make your life easier.
Have Enough Savings
Before you even become an independent worker, it would be ideal that you put this one together beforehand, but in case it has now been placed as a priority, it should. It is recommendable to make savings for at least six months. The majority of financial planners would say so, although, it would largely depend on your situation. That should be applied to your business and personal expenses as well.
By doing such a thing, you will set yourself up for times when work is harder to find. Such preventive measures will protect you as well from finding yourself in a position to accept a job that you are not feeling comfortable working in, just because you have to and are desperate for a better financial situation.
Calculate Your Earnings
It is true that as someone who is independent, you will have ups and downs like on a roller coaster when it comes to your financial situation. In order to relieve yourself from stress as much as possible, give yourself a “gift” of a consistent paycheck. It will make your budgeting much easier and your mind will be calmer for sure.
As a freelancer, to obtain such a consistency, take your average income over the last year and divide it by twelve. You will calculate how much you have received on average every month. If you are a beginner, just take your expenses as an example and divide them by twelve. This will give you a perspective on what you need to make. Try and avoid pouring all finances back into the business, since after all, you deserve a paycheck and you should live a little. This advice is meant only to bring your mind at ease and to give you a wise perspective that will help you see how good your business is actually doing.
Pay Attention to Taxes
In case you are a freelancer, do not forget about the self-employment tax. The overall percentage will depend on your net income.
Self-employment taxes can end up causing a lot of unnecessary stress to those who work independently. It would be wise to keep track of your financial records and to seek out a tax advisor’s advice. If you are not sure how to determine how much your tax will be, there is a solution. The self-employment tax calculator is easy to use. It can be found online, and by using it, you can automatically determine the amount of your bill. In any case, you should have these taxes in mind so you would not end up in an unwanted and stressful situation.
Especially in these times, it would be a smart idea to plan ahead. To elaborate, with the rising costs of everything, it would be recommended to spread out your wings as much as possible. Make sure that you do not use your talents for only one company.
By increasing your exposure, and finding new “gigs” that can be the addition to your freelance career, you will make sure to stay busy and at the same time, have a bigger income on the side. It does not have to be a job that will consume all of your free time. Just the one that will create secure financial income that you can keep on the side in case of an emergency and in case the primary “gig”, for any reason should fall apart.
By being a freelancer, you enjoy certain freedoms that people who have decided to do 9 to 5 jobs cannot afford to have. Although, you should try and keep in mind that in case you are not careful, it may come with a cost. As a self-employed individual, try and keep track of your earnings, plan ahead, and calculate taxes upfront. It will save you from a lot of financial and emotional burdens and will let you enjoy the work that you love doing.