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Freelance Finance: Figuring it Out for the First Time

When you choose to go freelance, it is an amazing rush. You get to choose what you do, where you work and whether or not you will change out of your PJs today. But, with this freedom also comes some financial uncertainty and while you are settling into your new role, money – and saving money – is often the biggest stress on your mind.

Figuring out your finances will take time but it shouldn’t put you off making the leap and setting your own path to success. There are ways and means to get the money you need and over time, your income will likely settle down to something that looks relatively regular.

Image Credit: Pixnio

Finding the Finance to Leap

Before you quit your day job, it is important that you have enough savings to get by while you are touting for work. This will take some of the stress away from all the interviews you will have to do and will also give you time to settle into your new way of life. Many freelancers don’t really get started until a couple of months into their journey, so if you don’t get something immediately, don’t panic.

If you are struggling to make ends meet, there are various ways that you can get a cash injection. You could opt for a business loan if you qualify, but, if you know that there’s a cheque on the way a short term loan might be better to tide you over.




Rebuilding Your Savings

It is likely that in the first few months of going freelance your savings will take a bit of a battering. This is fine – it’s what you saved for after all – but in the long term you will need to start rebuilding your savings to ensure that you have a safety net for the future. There are lots of arguments about whether you should save 10% – 20% of your income, but as long as you make some savings, it doesn’t really matter.

Aim to save enough for the possibility that you might be out of work for 3 months. While you are unlikely to let this happen, this will provide enough of a safety net for you to relax a bit more and even be pickier about the jobs you take.

Creating a Work Strategy

All of which brings us to creating a work strategy. Freelancers all have different ideas of how much they would like to work, when and where. This means that your strategy might look completely different to everyone else’s but as long as it means that you have enough income to live on, this doesn’t matter.

One way to strategize is to accept every job offer until you reach a magic number and then be pickier throughout the rest of the month or year. Another way is to look at when you want to take time off and plan around that. Whatever you decide, having a strategy will help you to prioritize the work that you do as well as help you to figure out how to budget your finances.

It’s all up to you now – good luck!

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Lynne Huysamen

Mommy to a pigeon pair, blogger and online marketer. Lover of chocolate, good books and buckets of coffee.

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