As a freelance, you will most often have multiple sources of income. However, working as a freelance can also be very challenging, as it does not always guarantee stability. Most of the time, it might not always be easy for you to manage your money but it is important to develop a financial discipline in order to make ends meet while still being able to save up some money for the cold days.
Having multiple sources of income is one of the keys to financial freedom but how can you properly manage your money?
Budget! Budget! Budget!
Having a budget is crucial when it comes to managing your money properly. Failing to plan is planing to fail. It is important to list all of your monthly expenses by order of importance and attach a number to each one of them. This will set some boundaries for the amount of money you allow yourself to spend and develop your sense of discipline when it comes to your finances. Also make sure you set aside a fixed amount for leisure and random expenses. When you are too strict on yourself, you increase your chances of not respecting your limits. By allowing you to create a spending plan for your money,budgeting ensures that you will always have enough money for the things you need and the things that are important to you. It is the perfect way for you to avoid unexpected expenses, which is the easiest way to overspend.
Use your most stable sources to cover your fixed costs
You do not want to make the mistakes of linking fixed bills to unstable sources of income. As a freelance, you won’t be able to control everything but you will know where you have more stability. You will have to deal with bosses who do not pay on time and projects that are unexpectedly terminated. Some gigs will fluctuate with seasons, some bosses will change your job description every other month…these are all signs that you should not get too comfortable. Identify the jobs that are the most stable and use them to pay your fixed expenses. This will allow you to have more stability when it comes to the way to spend your money.
Save a fixed % of your income every month
Saving does not just happen accidentally. It is a decision to set aside a certain % of each pay check. Saving money will allow you to live better and accomplish more than just making ends meet. Saving is what will allow you to buy a car, buy a home, pay for vacation and even get out of debt! Identify the sources of income you want to extract from, to deposit on your savings account.
The most important thing when it comes to managing your income and saving money, is to be intentional and disciplined. Do not take on more gigs than you can handle. It is better to take on less than to take on too much and have unhappy clients. Strive for excellence in all you do to ensure that you build a stable network of contractees.
Want to learn more about effective ways to manage your finances and reach financial freedom? Sign up for FREE today on Shortstints.