Collaborative Post
There are many, many reasons why so many freelancers feel that they could never go back to salaried work. The freedom. The ability to work from home and miss out on the stress and anxiety of the morning commute. The ability to choose your own hours and work around your personal and family commitments. The liberation from the gossip and politics that can toxify the workplace. And while the grass is always greener on the other side, most freelancers tend to be pretty happy with their lot. Still, it would be irresponsible to say that being a freelancer doesn’t have its caveats. They’re completely in charge of their own productivity. They run a constant risk of overworking themselves and burning out. What’s more, they can find it really tricky to manage their finances, pay enough into their savings and stay on the right side of catastrophic debt.
Here are some commonly made financial mistakes that all freelancers need to avoid to live a financially happy life…
Failing to budget
Okay, so this one isn’t exclusive to freelancers, but they’re certainly among those who benefit the most from it. Drawing up a household budget template and sticking to it is absolutely essential if you’re to keep track of all your outgoing expenses and ascertain a minimum benchmark for your monthly earnings.
What’s more, it’s essential to make sure you’re putting enough into your savings and setting enough aside for tax. Both will keep you from unpleasant surprises at the end of the financial year.
Assuming that having bad credit means you only have bad options
Every now and then a little borrowing may be necessary. And that’s okay. Just don’t assume that you only have bad options if your credit rating is less than stellar. And make sure that if you need fast cash loans you choose a company like Loans NZ who make their interest rates and monthly repayments transparent. You don’t need to run into the arms of opportunistic loan companies who’ll obfuscate their charges and sneak in hidden fees.
Letting your debts spiral out of control
Speaking of borrowing, if your debts are various and come out at various times of the month with different rates of interest, this can make them much harder to manage. Simplicity in financial matters is always better for freelancers. It may be worth consolidating your existing debts into a single monthly repayment. Sure, this will incur a fee, but it will make planning your finances so much easier and probably reduce the amount you’re throwing away on interest.
Splurging when you get a great payday
There’s no feeling quite like scoring a great payday from a new client. Still, unless you know for a fact that this payday is the first of many from them it’s a good idea to be prudent. Avoid splurging. You don’t necessarily know how long you need to make that money last for!
Sticking with unreliable clients
Finally, it’s all-too tempting (especially for new freelancers) to cling to each and every paying client. But as you grow in experience you’ll come to realise that there are some who will never pay you what you’re worth or who will perpetually mess you around by haggling on prices, paying late and getting elusive when you chase them up. It’s best to cut your losses with these clients or you’ll always be on the back foot.