“I am spending quite a bunch of money this month. Nevermind! Salary comes next month”…
This is pretty much how you think when you have a regular paycheck in a 9 to 5 job. You focus the most on your productivity at work. But when you are looking down the barrel of your late twenties burnout, you don’t like it. You want to break out from the confines of your job and explore something big, like err…being your own boss?
Freelancing can offer a great way to get some extra income to meet a variety of needs. Some people do it to pay their mortgages, some people do it for saving up for retirement and some people do it just to have some extra money to supplement their salaries.
While many do it for an incremental income along with their full-time job, some even take it full time. And the idea of the latter sounds exciting, to the least. However, it is the full-time freelancers that need to be extra cautious of not wasting their money.
Let’s accept it. Irrespective of how many clients are asking for your services right now, you lack a regular fixed paycheck. Hence, you may benefit from knowing the following ways to keep your money in your pockets, which is always a good thing to do.
Outsource Like A Pro
Freelancers think they can do anything. Yes, that is true in several cases. However, thinking that one can manage all the work one gets along with finding time for the fun stuff is nothing less than wishful thinking. You only have 24 hours in a day!
It is then that outsourcing becomes imperative. Of course, you can overdo in that regard as well. Especially if you are a beginner at outsourcing and are fascinated by how much you are allowed to outsource, you might end up putting quite a dent in your pocket trying to outsource literally. But hey, you can avoid this by simply buying little gigs on freelancing portals(some of which you are probably already registered at). Fiverr.com and Freelancer.com are some popular portals.
This way, you not only save time for yourself but also empower those other freelancers to make a living for themselves. Another thing you can keep in mind is that you should aim at spending 10% of your revenue while reducing your work by about 50%. Sounds about ideal, right?
Save For Retirement
This may seem an unconventional way to save money, but it is not to be overlooked. It is understandable that saving up for retirement may impede your plans to expand your freelancing business for the same requires additional investment. But, the saving is worth it!
Not only does it help you save for the future, but if you open a SEP IRA, or something very similar, then you can also grab the benefits of the tax deduction for the concerned contribution year. Clever..eh?
Avoid The Tax Deduction Trap
Being a freelancer often gives you several opportunities to grab some tax relaxation. But many a time do we run into freelancers who use the ‘it’s deductible’ excuse to make extravagant purchases. Of course, We all love tax deductions, but how often do we actually avail ourselves of them.
Instead of getting into that trap, simply determine if it’s a true need. If it’s not, then you’re not saving money. You’re spending money you don’t need to and that puts you on the losing end of the equation each time.
Plan Your Money
This doesn’t necessarily have to be a budget, but the point is to have a plan for your freelance income. I like to think of it as mental accounting – assigning a specific income stream for a specific goal.
Whether it be to pay off debt, save extra for retirement, or save for a vacation, just make sure you have a plan for your cash. Not only will this drive you to work harder to reach your goals, it will also help you avoid mindlessly spending money and thus, wasting it.
Spend!
Yes, yes. We know it sounds uber counter-intuitive in a post that is titled quite the opposite. However, if you truly want to get a lot of clients to maintain a steady stream of income, you will need to spend a good amount of money to be able to reinvest in it, and ultimately develop an empire of a network of leads.
The task is deciding what to invest into. Instead of mindlessly spending on tons of advertisements and shoddy promotions, analyze each option to see which one brings you the best result. Regardless, spending money important to grow.
Kickstart Your Freelancing Career With Us
Getting a steady flow of clients right from the get-go is one of the primary concerns of a freelancing beginner. Clients are the real breadwinners of every freelancer. But in the initial stages of your business, an account on a few freelancing websites like fiverr.com will not be enough for you.
Enter Co-working, a working approach wherein you can share a working space with a diverse pool of various entrepreneurs and teams from different backgrounds and businesses, get ideas from them, help them with something, collaborate with them and develop a great network of leads and referrals for your business.
Happy Freelancing!