The importance of saving some money and developing a savings account has never been greater than it is right now.
However, if you have money stacking up, it’s impossible to make long-term plans. Do not even add to the difficulties of freelancing and obtaining a stable income by ignoring your finances.
Freelancers may find this article helpful in keeping their budget under control. So, when you’re in a tight spot financially, consider implementing these five simple concepts to free up some cash.
Everything you need to understand is as follows:
1. Use Your Time More Efficiently
Even as a freelancer, time is important, therefore you need to be the most productive you can in order to get the job accomplished.
Writing a 5-page essay that generates $100 an hour means you’re still making a quarter of how much you could be. Whether you’re able to crank out three pieces per day at $100 each, that would be some serious cash you can set aside for a stormy time.
It’s also important to get some more work as possible during the course of each day. There are several ways to save money after you’re able to take in far more money beyond your expenditures.
2. Establish a Personal Month – to – month Spending.
Now let us imagine you’re making $1,500 monthly, which is fantastic!
Consider, that you have to pay $900 in utilities and rent each month. As soon as you get started, you’re already squandering half of your monthly salary, which implies that any more purchases or payments you make could end up costing you money. You may find it helpful to create a monthly spending for yourself.
Calculate your monthly expenses, then divide the remainder into smaller portions and make decisions on how to allocate the funds spending, saving, investing, etc.
3. Prepare for Tax Season by stockpiling money.
Even though it may sound tedious, you may always save your money for tax time.
The tax-filing deadline has already been pushed back to July 15, 2020, just like this year. There’s a good probability next year’s filing deadline will be pushed back so that people can have the opportunity to get up to speed on the backlog. If you don’t plan ahead, it can be difficult to file taxes as a freelancing.
If you’re self-employed, it’s a good guideline to save a half of each paycheck for taxes. When it comes to self-employment tax rules issued by the Internal Revenue Service (IRS), it is up to you to organize and maintain your own firm and serve as an auditor to guarantee that you’re following all of the requirements.
Thanks to the government, quarterly tax payments are now far more convenient than annual ones. As a result, if you rely solely on freelance employment to support your lifestyle, you should set away some cash monthly.
4. It’s time to look to the future.
When preparing for tax time, it’s a good idea to keep an eye toward the future.
When you already have a specific goal in mind, saving money becomes much simpler. Leaving aside a specific amount per month for a future purpose, such as a trip to Tokyo or a marriage with your fiance, will allow you to build that plan and keep you ready for any future plans.
Think about starting a retirement fund, such a 401(k), to ensure that you’ll have money available when you need it most. Keep in mind that you’re on your own as a freelancer, so you’ll need to take any and all measures to ensure your long-term financial well-being.
5. Increase Your Clients’ Fees by Increasing Your Rates
Lastly, increasing your charges for clients is a smart strategy to save income.
It’s possible that you first set your rates lower in order to attract more clients before you even started freelancing. In any case, given that you’re an expert and have worked on some remarkable tasks, there’s no harm in increasing your prices for the upcoming three-month period.
A copywriter who charges only $.10 per word could raise his or her prices to at least $.10 per word or maybe just $.25 per word, depending on his or her ability and what his or her customers are ready to pay. Adjust your fees for graphic artists who bill by the hour in order to match whatever a customer might pay for the identical work done by a contract worker. Hourly rates around $35 and $50 are more than acceptable for high-quality work from a skilled designer.
Above all, don’t be too hard on yourself. When you’ve been scratching the bottom of the bucket for a long, it’s an opportunity to make some upgrades.