Sep 24

Freelancers Tips for The Average Joe

Financial Management Skills Every Freelancer Needs To Know

Being a freelancer comes with lots of freedom considering that you get to be your own boss. Nonetheless, there is a price to pay given that you’ll never enjoy employee advantages. What is more, the unpredictable nature of income is another issues that can make the person sink heavy into debts. In this article, we take a look at financial management tips every freelancer needs to know.

Tracking your income is of great importance under these circumstances. You need to keep an eye on how much you make over a given period of time. Regrettably, many freelancers do not have the slightest idea of the money they make on a monthly basis. Having a record of your finances by your side helps you avoid running broke given that you will be amply prepared for high and low season. As a way to stay more organized, you can choose to use a 457 calculator.

Drafting a budget is what every freelancer needs to take seriously. This is something that lots of freelancers think of as arduous but it is doable. After you have received payment, it is always a good idea to buy necessities and then pay off bad debts to avoid interest building up. Securing a better future during your old age by saving for retirement would be a good idea. You also need to save for emergencies but ensure that you replenish the amount should you withdraw.

This probably goes without saying but giving the taxman his dues is of great importance. Truth be told, taxes can be tricky to handle more so when you are a freelancer. While an employee has his/her taxes paid by the employer, a freelancer is supposed to make payments by themselves. Calculation of your annual earnings is essential, though you can still use last year returns as reference in case you do not know the amount you’ve earned. Remember that there are freelancing tax regulations in place and it would be prudent to learn more about this.

Research shows that a good number of freelancers are not insured. This is definitely something dangerous as the person is likely to have fiscal distress if they got afflicted by a medical condition. There are several options offered by government not to mention you can also opt for private insurance. According to professionals, a medical savings account will ensure that one is at all times capable of paying for health insurance.

Make sure that what you are being paid is commensurate to the services you have to offer. Start by finding out the rates your fellow freelancers are charging. In case you are being under-compensated, then it is the high time that you asked for a pay rise.