Tips to Mitigate Your Unstable Freelance Cash Flow
With how technology is massively lowering barriers to entry into all kinds of “side hustles”, you’re just not cool unless you’re generating some sort of freelancing income. For example, with all of the web skills I’ve learned over the years as I’ve run various blogs, I’ve been able to turn that into a small company building and managing websites for small businesses in Louisville.
If you rely on any type of freelance income however, it doesn’t come without its challenges.
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Today, I welcome back my friend Lucy Wyndham to talk to you about optimizing your freelance income. Take it away Lucy!
Three out of every ten workers in the United States now identifies as a freelancer. Most freelancers enjoy the work because its flexible and allows them to make money doing something they truly love. However, one major drawback to freelancing is lack of stability. Sometimes you may not receive a regular paycheck, and there’s no guarantee how you’ll stand financially at the end of each month. While you can’t eliminate this risk, you can make it a little easier on yourself. If you’re a freelancer, or looking to start in 2018, check out some of these tips to keep your business afloat.
Pay Yourself a Paycheck
One of the things you don’t get as a freelancer is a regular paycheck. Freelancing can be a rollercoaster of a ride through good pay months and bad ones. So, treat yourself like a regular employee and give yourself a regular paycheck. You can use a simple online salary calculator to figure out how much you can pay yourself.
This will allow you to budget yourself better and it will also physically show that you can afford to write the check. You can also put away your taxes with each check and help yourself out when it comes to tax season.
Establish an Emergency Fund
You will inevitably have some slow months, but if you cushion your savings, this shouldn’t completely destroy you. You should always aim to have a least six months-worth of profit in your savings in case you come across a slow period or any other financial emergencies. It will also prevent you from taking any unwanted work simply because you’re desperate for money or new business.
Use a Global Payment System
You should make it as easy as possible for you to get paid. Take a look at some global payment systems and pick one that you relate to. Some of the most popular payment processing systems out there include PayPal, Due, and Stripe. With a commonly used system, you’ll be able to have more opportunities for business, expand your services around the world, and help build your wealth.
Diversify Your Portfolio
Even if your work is becoming stable, you shouldn’t put all your eggs in one basket. Don’t make yourself dependent on one single job and instead diversify your work and build new clients. This way you will have a back-up should you ever lose your big money maker.
Freelancing may seem like the perfect flexible career for you. However, you need to ensure that you’re doing everything you can to save your money. Make smart decisions and save your money when you can.
“Lucy Wyndham is a freelance writer and editor. She began her career as a financial advisor helping both people and businesses with their financial needs. After taking a step back to spend more time with her family, she loves to pass on good advice and to take her Labrador, Rosie, on long walks.”
